Overview

The Company had been very active with exploration advancing the Company’s assets at the West and East Kalgoorlie gold and nickel projects and over the Pilbara and Yilgarn iron ore projects. Additionally work was continuing over several other projects which the Company had in joint venture including at Quartz Circle, which was in Joint venture with Graynic Metals, Lake Way (Newera Uranium), Jillewarra (Red Emperor) and others.

Pilbara Iron Ore Projects

The Company had five distinct project areas, within the Pilbara region, that were all prospective for iron ore mineralisation. The Hamersley Project covers approximately 85km² and was situated approximately 50km northeast of the Tom Price township in the Pilbara Region of Western Australia. Preliminary work by Cazaly Iron and a review of historical work conducted highlighted the potential for both channel iron deposits (CIDs) and bedded iron deposits (BIDs). Previous drilling within the tenement confirmed the presence of pisolitic material and the results of recent close spaced gravity survey had been particularly encouraging.

The project was very close to road and railway infrastructure providing potential future development advantages. A competitor’s proposed rail corridor crossed the northern portion of the tenement. Drilling commenced in October 2008.

West Kalgoorlie Joint Venture

Carbine Resources Limited (“Carbine”) was earning up to 70% by farming into Cazaly’s entire gold exploration and development portfolio in the Kunanalling, Ora Banda, Grants Patch, Carbine and Split Rocks regions. These tenements cover approximately 533 square kilometres and contained mineral resources of 597,700 ounces of gold. 

Activities were focussed on completing the approvals stage for commencement of mining of the Catherwood deposit, finalising detailed mine designs, developing a mine schedule, and negotiating commercial terms with owners and operators of mining fleets and gold processing plants. 

Exploration for the period was limited by the lack of availability of suitable drill rigs. Drill programmes had been designed for the Backflip prospect in the Grants Patch Project area, the Boundary prospect (Ora Banda), and the Sabrina prospect (Kunanalling).

Mount Carrington 

CAZ granted an option to Rex Minerals Limited (REX) to purchase all of its remaining interest in the Mt Carrington gold-silver project in northern NSW.

Menzies

Proto Resources & Investments Ltd completed its acquisition of particular interests in the Menzies Project. Proto agreed to form JV with Poseidon Nickel.  CAZ retained their interests which included 10% of the nickel laterite rights, 50% of the nickel sulphide rights and 30% of the gold rights.  

Mount Vetters

Proto completed the acquisition of the Company’s remaining 25% interest in the Mount Vetter project.  Cazaly still retained an ongoing interest in 25% of the gold and uranium rights.

Cosmo Newberry JV

3D Resources entered into a farm-in and joint venture agreement where it could earn 75% in the Cosmo Newberry Exploration Licences by spending up to $300,000 on tenements within 3 years of granting.

Big Ben – Alice Hill

3D Resources entered into a farm-in and joint venture agreement with Cazaly Resources Ltd where it could earn 75% interest in the Big Ben (E80/4014) and Alice Hill (E80/4015) Exploration Licences by spending up to $150,000 on the tenements within three years of granting.

Parker Range Iron Ore Project

Yilgarn Iron Province

The Company entered into an iron ore farm-in agreement with Gondwana Resources Ltd (ASX: GDA), covering the Parker Range Project. Cazaly has the right to earn 80% of the iron ore rights through the expenditure of $1million over three years. The Parker Range Project lies approximately 15 kilometres south-east of Marvel Loch and approximately 60 kilometres by road south of the Perth–Kalgoorlie railway. Potential exists for the delineation of a substantial resource of iron ore.

The Yilgarn Iron Province has a history of large-scale iron production, with the first iron ore exported from Western Australia coming from the Koolanooka deposit in the Yilgarn during the mid-1960s. More recently, iron ore mining in the Yilgarn has been characterised by modest production from several small and dispersed hematite deposits, such as Koolyanobbing.

Rhode Ridge Iron Ore Project

Cazaly had exploration licence applications in respect of the Rhodes Ridge project which contained one of the largest undeveloped iron ore resources in Western Australia. Cazaly agreed to transfer the tenements to FMG upon grant in return for a royalty from future production. Upon transfer of the tenements, Cazaly would receive an advance on future royalties calculated at $0.05 per tonne of the inferred JORC compliant resource contained in the Rhodes Ridge Project with an agreed minimum payment of $20 million and an agreed maximum of $100 million. 

The Rhodes Ridge Joint Venture which comprised a subsidiary of Rio Tinto Limited, Hancock Prospecting Pty Ltd and Wright Prospecting Pty Ltd, had objected to the grant of the tenements on the basis that the Rhodes Ridge Joint Venture claimed to hold rights of occupancy over the land pursuant to the Iron Ore (Rhodes Ridge) Agreement Authorisation Act 1972 (WA). Cazaly contended that the rights of occupancy have not been validly renewed and that the land is open for mining under the Mining Act 1978 (WA). 

The Mining Warden determined that there should be a preliminary hearing in relation to whether or not the Rhodes Ridge Joint Venture has valid and subsisting rights of occupancy. This preliminary hearing was listed for 4 and 5 December 2008. 

If the Warden determined that the Rhodes Ridge Joint Venture did not hold valid and subsisting rights of occupancy, there was no reason why the Rhodes Ridge Joint Venture should be heard in opposition to the grant of the tenements and Cazaly believed there is no reason why the tenement applications should not be granted.