The Kilkivan Project is located about 30km south west of Gympie and consists of EPM 19366.

Aus Tin has identified or reconfirmed prospects at Pembroke, Silver Valley, Mt Cobalt, Jackson North and Ridley.

Aus Tin discovered ore grade nickel sulphide mineralisation at its Pembroke Prospect on the Black Snake Plateau, 30km south of Kilkivan in South East Queensland during mid 2008.

Location of Aus Tin’s tenements, Pembroke & Silver Valley Discoveries at Black Snake Plateau, 220 km northwest of Brisbane

Commercial Significance

Nickel Sulphides are highly prized, rare discoveries.

There have only been two ore-grade nickel sulphide discoveries in Eastern Australia in the last 55 years, namely the Avebury Nickel Mine in western Tasmania discovered by Allegiance Mining NL in January 1998 and now Pembroke, discovered by AusNiCo in 2008.

Jubilee Mines was purchased by Xstrata for more than $2.2 billion in late 2007 and Allegiance was purchased by Zinifex Limited (now OZ Mining Limited) for more than $840 million in mid 2008.

The world’s largest nickel mine is at Norilsk in north-eastern Siberia and it is arguably one of the most valuable mineral deposits on earth. Norilsk is also a relatively young, Paleozoic aged nickel sulphide deposit which may suggest that these “younger-aged” Paleozoic deposits may be more extensive than previously recognised. AusNiCo does not compare its discoveries with Norilsk which is in a class of its own.

However, the Avebury-style Paleozoic-aged nickel deposits are characterised by large thicknesses of nickel mineralisation at low to moderate grades which are ideally suited to modern, large-scale mechanised mining methods, especially if the deposit is at shallow depths that can be mined by open-pit methods.

Aus Tin’s discovery hole PEM2 at the Pembroke Prospect intersected 50 metres of nickel sulphide mineralisation averaging 0.34% nickel, and at the point that the hole was stopped it was still in the nickel sulphide mineralisation. Within that 50 metres of nickel mineralisation was a four (4) metre zone averaging 1.1% Ni which represents an intercept at ore-grades and widths. AusNiCo considers that it has discovered mineralisation that has strong similarities with the Avebury-style of nickel sulphide deposit.

The following table summarises the economic and technical comparisons between the Avebury-style, Paleozoic-age, “bulk sized” type of deposit Aus Tin is targeting and the typical underground Western Australian nickel deposits.

Characteristic "Bulk Sized" Western Australia Ni
Tonnes Big 5 to 20Mt Small 0.5 to 5Mt
Grade Lo-Mod 0.6% to 2% Ni High +2% Ni
Widths Wide 5-40 metres Narrow 0.5 to 3 metres
Ground stability Good - continuous Difficult - disjointed
Mining Costs Low A$30/t High A$80 to A$160/t
  80 men for 10,000 tpa Ni 250 men for 10,000 tpa Ni
Concentrates +20% Ni = premium price 6-16% Ni = lower price
Infrastructure Already exists Rare
Distances Short Long
These are generalisations, many exceptions exist.

Aus Tin’s Targets

Aus Tin’s exploration team have developed a sophisticated understanding of the geology of the Black Snake geological province which is simplistically summarised in the diagram below.

Geological Model of the Black Snake plateau showing the geological setting of the mineralisation discovered by Aus Tin.

Pembroke Nickel Sulphide Discovery (deposit example 2 in Geological Model diagram)

Aus Tin has discovered significant new ore-grade nickel-cobalt sulphides and copper-gold mineralisation zones at the Pembroke prospect on the Black Snake Plateau, 30km south of Kilkivan in Southeast Queensland. Drillhole PEM 2 at Pembroke has intersected 4 metres of fresh nickel sulphides grading 1.1% nickel and 525 ppm (0.05%) cobalt within a large 50 metre-wide zone of significant nickel sulphide mineralisation averaging 0.34% nickel. The bottom of the hole was still in this nickel mineralisation indicating that the mineralised zone may be even thicker than intersected in the drill hole.

The copper-gold zone of 20 metres averaging 0.48% copper, 1.5 g/t gold that occurs above the nickel sulphides in hole PEM 2 is typical of the copper-nickel zonation of the entire Black Snake Plateau district.

Silver Valley Copper-Silver Sulphide Discovery (deposit example 3 in Geological Model diagram)

Aus Tin has also discovered high-grade copper-silver sulphides at the Silver Valley prospect located two kilometres east of Pembroke as announced by D’Aguilar in its ASX release of 2 June 2008. The first drillhole at Silver Valley, SG1 intersected 14 metres at a grade of 1.2% copper and 87g/t (2.8 ounces per tonne) of silver in primary sulphide mineralisation. The potential for high grade extensions to considerable depths is therefore encouraging. The discontinuous 5km long, 500m wide soil geochemical anomaly at Silver Valley suggests significant potential exists for a major mineralised system. Aus Tin intends to conduct further detailed exploration at this zone entry to identify a major ore body.

Nickel Province

Nickel mineralisation discovered within Aus Tin’s extensive tenements in South East Queensland show potential for a new nickel province more than 70 kilometres long.

The map image below shows the geology south of Kilkivan. The greenstone is predominantly a “serpentinite” altered peridotite rock, which is a potential host rock for nickel, copper,gold, cobalt and platinum group metals mineralisation.

Only a small part of this greenstone serpentinite belt has been explored in modern times for nickel.

Geologically, such serpentinite or altered peridotite rocks are prospective for nickel, cobalt, copper, gold and platinum group metals. Aus Tin’s exploration has identified targets for all these metals within the Company’s tenements.

Geology of Aus Tin’s exploration area south of Kilkivan and prospect locations. The serpentinite belt is more than 70 kilometres long and up to 8 kilometres wide. The explored nickel belts at Black Snake Plateau are shown in the small red box (top, centre) and represent only approximately 10% of the strike length of the nickeliferous serpentinite rocks that have been explored by Aus Tin and others to date.

Mt Cobalt – Mt Clara Nickel Oxide and Nickel-Copper Sulphide Prospect (deposit example 1 in Geological Model diagram)

At Mount Cobalt, a broad zone of nickel mineralisation has been identified above 0.3% Ni (open ended) over an area 250m long by 200m wide and more than 115m deep. The most recent drilling at Mount Cobalt targeted significant extensions to the nickel oxide mineralised zone and significant nickel values have been intersected in all drill holes.

The drilling has confirmed that the Mt Cobalt nickel and cobalt deposit remains open to the north at hole COB 15 which intersected 82m @ 0.58% Ni and 0.015% Co from surface and dips northwards towards a magnetic high anomaly which is interpreted by geologists to be a nickel sulphide target. This magnetic feature appears to underlie the historic Mount Clara copper mines.

This mineralised prospect is in rugged terrain and requires construction of drill access roads. This prospect is scheduled to be drilled after the successful completion of the Offer and listing of Aus Tin on the ASX in October 2010.

Project upsides include:

  1. The strong magnetic target at 350m depth.

  2. Highly encouraging metallurgy – 75% nickel recovery in 90 day acid leach test of the nickel oxide.

  3. The identification of further occurrences of the new style of nickel mineralisation and the advent of advanced beneficiation techniques and low pressure and temperature leaching offering the opportunity for economic extraction.

Mt Cobalt drillhole locations and long section line plotted on air magnetics and soil geochemistry contours. The nearest hole to this magnetic high drilled to date is COB 15 which intersected 82 metres averaging 0.58% nickel but failed to reach the magnetic target.


The exploration team will focus on the identification and evaluation of nickel mineralisation with similarities to Mt Cobalt and Pembroke prospects throughout the Company’s tenements in south-east and central Queensland.

Aus Tin’s relationship with DGR Global (formerly "D’Aguilar") means that they have access to well appointed offices, storage sheds, workshops and exploration equipment and staff. Budgets take these issues into consideration.

Drilling Program

Drilling - Pembroke

An initial programme will consist of two diamond core holes each of about 300m. In addition a staged program of percussion drilling has been planned as shown in the image below. Initially the drilling will define the trends and depths of the mineralization, so that the later drilling will be optimally located.


Drilling – Mt Clara – Mt Cobalt

Two vertical coreholes are proposed to be drilled at Mt Clara and Mt Cobalt.

Site A (427460E 7102900N) has a planned depth of 300m and is situated where the >3000 ppm nickel body (evident at surface in soil samples) is interpreted to pass below surface 200m ESE of the Mt Clara copper mine. It is close to the peak of the magnetic anomaly.

Site B (427480E 7103170N) has been planned to 250m and is situated 250m NE of the Mt Clara mine and is topographically above a zone of >3000 ppm nickel that lies lower down in the main creek to the east. It is also close to a subsidiary peak magnetic anomaly.

The area to be drilled is steep country and exact coordinates of the collars will depend upon access negotiations as well as safety and environmental factors.


Drilling - Elsewhere

Other drilling programs have been planned, notably at Widgee and Kandanga, but the exact locations are dependent upon the results of a minor amount of geological work in those locations together with any targeting features that come to light from the drilling at Pembroke and Mt Cobalt.