EPM 26895 – PALMERVILLE SOUTH 

SUMMARY

Diversified Mining and Resources acquired EPM 26895 Palmerville South tenement from Native Mineral Resources (ASX:NMR) in 2025/ 2026 as part of the Palmerville EPM package. The EPM is situated approximately 60km to the north of the Mungana andRed-Dome copper-gold mines, and 75km north of theChillagoe Township in North Queensland. It is 1 of 9 tenements which form the Native Mineral Resources Pty Ltd (NMR) Palmerville Project, granted Exploration Project Status by the Queensland Department of Resources.

The project is focused on the delineation of porphyry copper-gold, skarn and massive sulphide copper-gold, lead and zinc style deposits within, and adjacent to, the highly prospective Chillagoe Formation which hosts the Mungana and Red Dome mines.

Exploration Permit for Minerals (EPM) 26895 was granted to NMR on 31st January 2019 for a term of 5 years and is due to expire on 30th January 2024. An application for renewal has been submitted.
Initial desktop examination of the available data has revealed the potential for intrusive-centred gold-copper orebodies in a portion of the Chillagoe Formation interpreted to underlie Quaternary deposits and associated faulting and intrusives. While there are a number of mineral occurrences throughout the EPM, NMR has identified two main targets, the Newcrest Trend and Wrotham Park.

These targets will be compared to the newly acquired magnetic and radiometric data and reviewed prior to be ground truthed by regional mapping and sampling which is scheduled for the 2024 dry season.
Sentinel-2 satellite imagery mapping of minerals in the regolith over the entire Palmerville project was completed by Dirt Exploration. This mapping is of both outcrop and small amounts of minerals mixed into the regolith is in a similar manner to Mobile Metal Ion [MMI] geochemical sampling. Signals are retrieved for individual minerals using spectral unmixing.

The main work carried out over EPM 26895 to date, has entailed regional target definition and refinement using all existing and newly compiled datasets and the completion of the delayed airborne geophysics programme. Thomson Airborne completed the survey which was flown between April and June 2023. NMR contracted Mitre Geophysics to complete a structural and geophysical interpretation of the 2023 airborne data, NMR’s exploration datasets and all publicly available data. The interpretation has increased NMR’s understanding of EPM 26895, along with its neighbouring tenements, that cover the Big Bend anomaly (Figure 7). NMR is in the process of evaluating the results and planning its future exploration to add to the knowledge derived in the last couple of years work and target potential, structurally hosted, Cu and Au targets in the big Bend area.

EXPLORATION RATIONALE

Diversified Mining and Resources Palmerville Project is prospective for intrusive-related gold-copper orebodies in and adjacent to the Chillagoe Formation including the Hodgkinson Formation and Dargalong Metamorphics. The former being renown for hosting sizeable orebodies at Mungana and Red Dome.

EPM 26895 lies in the southern portion of the Palmerville Project tenements. Exploration carried out historically has concentrated on the delineation of copper and gold deposits with some carried out for potential uranium. Primarily the work carried out has been restricted to sparse drilling in order to penetrate the Quaternary cover. Some sporadic soil and rock chip sampling
has taken place.

Along with VTEM/FLEM survey, Kagara Limited carried out seven RC drill holes at Big Bend, however these were terminated prematurely due to difficult ground. In the Wrotham Park region Lion Properties drilled sixteen shallow RC holes looking for heavy minerals and were rewarded with an average of 4% zircon, 1% rutile with a maximum of 15% zircon and 3% rutile at <10m. BHP found anomalous stream sediments with a maximum of 58ppb Au which was followed up by Cyprus for a maximum of 8.6ppb.

Based on the work completed by NMR, an evaluation of the available open-sourced geophysical data and the compilation of all sample geochemistry over the area has highlighted the importance of contact/structurally hosted mineralisation concentrated at the boundary between the relatively competent cherts and limestones and the surrounding metasediments.

The work to date has only focused on a small number of these prospects. EPM 26895 encompasses the Newcrest Trend prospect, which is a potential area of mineralisation where the Chillagoe Formation is transected by a dislocation in the crust that changes the strike of the Chillagoe Formation from north-south in the northern portion of NMR’s Palmerville project, to NW- SE in the southern portion. The Newcrest Trend prospect has been the focus of most of the historical exploration by previous holders in the EPM 26895 region.

LOCAL GEOLOGY

EPM 26985 lies primarily to the west of the Palmerville fault, which separates Proterozoic metamorphics from mid-Paleozoic sediments and volcanics of the Hodgkinson Basin to the east (DeKeyser and Lucas,1968).Carboniferous to Permianigneous rocks intrude both sequences and are accompanied, especially in the case of the Permian, by co-magmatic terrestrial, felsic
dominated volcanics.

Volcanic activity associated with the Nychum, Pratt and Wrotham Park volcanics intrudes the Dargalong Metamorphics, Mulgrave and Chillagoe Formations adjacent to the Palmerville fault.

The Pratt Volcanics underlie the southern portion of EPM 26985 and are comprised of slightly to moderately porphyritic felsic rhyolite and dacites along with fine grained basalts of the Permian.

The southern portion of EPM 26895 is comprised of Nychum Volcanics, predominantly rhyolite lavas, andesite and dacites. Metalliferous occurrences elsewhere in the Chillagoe Formation are observed to be associated with basaltic volcanics.

The Palmerville fault and Chillagoe Formation are almost completely obscured by Permian to Cretaceous marine mudstones and siltstones with minor interbeds of fine-grained glauconitic and calcareous sandstone over the Wrotham Park prospect. The cover masks underlying geology and provides only subtle geochemical indications. BHP and Cyprus Australia recorded weakly anomalous Au assays from BCL stream sediment sampling, with the best result being 57.9ppb.

At the Newcrest Trend Prospect several leases pegged by Newcrest follow interpretations based on magnetics and gravity. A north-west extension is interpreted forthe Palmerville fault extending into the Palaeozoic meta-sediments subsequently intruded by granites and other intrusives potentially forming conduits for mineralisation. Cyprus Australia explored the concept by drilling into key lithologies for copper/gold mineralisation.

The inflection points where the Palmerville fault takes a turn from north-west to northerly produces a prime structural trap where conduits can be constrained and deformation maximized. The basin underwent east-west shortening of the main north to west trending shears

(South Palmerville, Retina, Hurricane and Kondoparinga faults) with transverse sinistral movements of up to 10km and in most cases this hosts mineralisation. The Newcrest Trend is representative of these basement structures and hence may be prospective within the Proterozoic terrain.

HISTORIC EXPLORATION

Little modern exploration has been conducted within this tenement area, NMR has been targeting surface mineralisation in the central and northern sections of the Palmerville project. Desktop review conducted that was undertaken and identified prospectivity for Cu.

Historic exploration has concentrated on the delineation of copper and gold deposits with some carried out for potential uranium. Primarily the work carried out has been restricted to sparse drilling to penetrate the Quaternary cover. Sporadic soil and rock chip sampling have taken place in sections of EPM 26895.

Newcrest held several tenements in the area and identified a lineament, known as the Newcrest Trend, from magnetic and gravity data, and the lineamentis thought to be a North-West extension of the Palmerville fault (Figure 5).

The inflection points where the Palmerville fault turns from North-West to Northerly is a prime structural trap where conduits are constrained, and deformation will be maximised subject to basin margin movement.

With the basin undergoing E-W shortening the main shears in the basin are N-W trending (South Palmerville, Retina, Hurricane and Konderparinga faults) with transverse sinistral movements of up to 10 km and in most cases host mineralisation. The Newcrest trend is a representative of these basement structures and hence prospective within the Proterozoic terrain. BHP and Cyprus Australia conducted stream sediment and soil sampling over parts of EPM 26895 and the recorded results showed weakly anomalous Au assays from BCL stream up to 57.9ppb Au (Figure 3 - Figure 5 and Table 3).

Kagara Limited completed a VTEM/FLEM helicopter survey of the Bib Bend anomaly, which was followed by seven RC drill holes at Big Bend however these were terminated prematurely due to difficult ground. In the Wrotham Park region Lion Properties drilled sixteen shallow RC holes looking for heavy minerals and were rewarded with average grades of 4% zircon, 1% rutile with a maximum of 15% zircon and 3% rutile at <10m.

Several shallow boreholes were drilled by Areva Resources Karu 0021-23 down to a maximum of 144m, Areva was exploring for Uranium and targeting the sediment basement contact. Areva resources Relinquished EPM18927 in January 2014 after no favourable results.

PREVIOUS WORK PROGRAM BY NMR

In 2021, NMR contracted Dirt Exploration to acquire and review the publicly available SWIR/LWIR Sentinel-2 satellite imagery and develop hyperspectral imagery maps for the potential for copper, gold and antimony in the regolith over the entire Palmerville project area (Figure 6).

Highlighted areas for investigation can be seen in figure 6 where the variation of response of regolith to the technique calibrated for Cu mineralisation across the Palmerville project is shown.

A number of anomalous Cu zones are evident, and NMR is comparing these with the high resolution magnetic and radiometric data, prior to field testing the anomalies.

Greg Curnow commenced as the new Chief Geologist for NMR and during the first half of 2023 carried out a desktop review of all the available data for EPM 26895 as a part of a regional review of the Palmerville project. Part of this work included a site visit to EPM 26895 where he visited the Wrotham Park and Big Bend prospects.

Also completed during the current term was a Palmerville wide airborne magnetic and radiometric geophysical survey covering 2,162km2 and comprising over 30,000-line km in length and was flown at a line spacing of 80 metres and an average height of 90 metres.

The survey was partly funded by the QLD Government as part of the Collaborative Exploration Initiative (CEI) and the survey was completed in June 2023. The survey covered the entire area of EPM 26895, and NMR expects to carry out an interpretation of the newly acquired data, along with all the publicly available historic data and generate targets from the data, in 2024.

Figure 7 displays the airborne magnetic data, as a TMI VRMI image, over EPM 26895. Previous work in the area by Newcrest has highlighted a geophysical feature that extends in a relative straight line where the Palmerville faultflexes to the north and is followed by the Chillagoe Formation.

Geochemical sampling completed by previous holders has broadly tested the Newcrest Trend with the sampling data showing some anomalous Cu and Au results which lends support to the prospectivity of this area. It is anticipated that the newly acquired geophysical data for the Palmerville project will elucidate a variety of targets along the Newcrest Trend and may be instrumental in the definition of structures within the Chillagoe Formation.

The result will be a more accurate understanding of the geology within this tenement and its economic potential as previous drilling of the southern portion of EPM 26895 has been hampered by cover and poor ground conditions to date.

Previous holders have provided a good foundation for NMR to build upon in the southern section of the Palmerville project.

CURRENT WORK PROGRAM

Geophysical & Structural Interpretation Mitre Geophysics were contracted with completing a structural and geophysical interpretation of the northern section of the Palmerville Project and focussed on the area north of the Mitchell River to the northern boundary of the Palmerville Project. The interpreted area includes part of the covered by the airborne geophysical survey that NMR conducted in 2023.

Mitre Geophysics were supplied with all of NMR’s datasets, all available public data, as well as the 2023 airborne data.

The structural interpretation was based on the magnetic data from the 2023 airborne survey, using a variety of filtered images including various versions of the RTP, first and second derivative filters, tilt derivative, and the VRMI and Analytic Signal. The radiometric data was also viewed although was not found to add significant additional information.

The interpretation was completed by mapping as much of the magnetic stratigraphy as possible including tagging of the most magnetic units. A detailed set of structures was developed and are categorised based on their primary strike direction. There is clear sets of EW, NE, NW and NS trending faults and magnetic stratigraphy identified by Mitre. The primary Palmerville fault is also mapped in detail.

CONCLUSIONS

The southern section of the tenement is mostly covered by Mesozoic sediments that range in thickness of 20 to 100 metres and obscures the bedrock geology as well as a major flexure in the Palmerville fault, which is characterised by a large magnetic feature known as the Big Bend anomaly (Figure 7).

Initial reviews of the raw magnetic and radiometric geophysical data revealed a circular magnetic body located just north-west of the Big Bend anomaly in the western section of EPM 26895, though the follow up structural and geophysical interpretation did not find the magnetic structure to be a viable exploration target.

The interpretation identified several targets and though most were on adjacent tenements to EPM 26895, BB01-A, BB02_B and BB27_B are located within the tenement (Figure 8).

BB01-A is interpreted to be an intersection of Palmerville fault and cross-cutting NE fault, north corner of intrusive complex, with a coincident VTEM anomaly parallel to PF from potentially a large deep conductor. There is also a small mag anomaly. Follow up work may include geochemistry and/or FLEM geophysics.

BB02_B is thought to be a linear radiometric high (alteration?) parallel to Palmerville fault and has been mapped as Nychum Volcanics. Mitre recommends mapping and sampling.

BB02_B is part of the eastern rim of the big Bend anomaly and is located along the contact of the interpreted Palmerville fault and a deep magnetic body as shown by the 3D inversion model and warrants further examination by NMR (Figure 12).

BB27-B is interpreted to be the intersection of Palmerville fault and a North-West cross fault. It is a possible offset on Palmerville fault, as there is a definite trend change in Palmerville fault.

The interpretation also identified a large magnetic anomaly located just north of Big Bend anomaly and to the west of EPM 19537 that shows a large structural displacement, most likely faulting, that develops in intensity with depth, as shown in the VRMI 3D magnetic inversion model to at least a depth of 1,5000 metres (Figure 9 - Figure 12).

Mitre has identified a number of targets (BB02_B – BB06) in this anomaly and though they are just outside EPM 19357, they are close enough to warrant further work to test the surrounding area inside EPM 19537.

The initial focus on future work must prioritise understanding the relationship between magnetics, geology and geochemical sampling so this relationship can be applied to the identified targets.

NMR plans to commence generating targets for possible ground geophysical surveys and/or drilling in 2025.

Future work will also include mapping and sampling of the identified targets in EPM 26895, and if this work is successful follow up geophysics and possibly drilling may occur.

The area is a prime candidate for Pulse EM scanning following any positive results from the aeromagnetic survey and EM would assist with providing accuracy for precise drillhole targeting.

Additionally, a reassessment of the alluvial gold resources will be undertaken in lieu of the current high gold price.