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Second Gold Orebody Found in Lewis Mine

ASX Announcement & Media Release

12 March 2001

Australian mining and exploration company, Gympie Gold Limited today announced that a large stockwork gold orebody has been found and drilled in its new Lewis Mine at Gympie in southeast Queensland. It has been named Rands Dyke Stockwork.

It is a wide stockwork zone located within 30 vertical metres of the path of the Lewis Mine decline scheduled to be developed over the next 3 months. It is 65 metres north of the vertical Inglewood Lode that is the initially planned target of the Lewis Mine exploratory development.

A surface diamond drillhole and an underground diamond drillhole from the Lewis Decline intersected the new orebody within a few days of each other. The two similar-looking intercepts are 20 metres apart and both comprise wide zones of thin stockwork veins, some containing visible gold. The drill-core from the underground hole has been assayed first while that from the surface hole is being documented and photographed in detail.

Managing Director of Gympie Gold Limited, Mr Harry Adams, said: “Our exploration team consider this the most significant result since the discovery of stockwork 6A orebody within our Monkland Mine twelve months ago. Over coming months, surface drilling will test northern extensions of Rands Dyke while underground diamond drilling will test the current discovery zone closer to the Lewis Decline. Other mineralised structures that could generate early production from the Lewis Mine will also be drilled. Underground drilling only commenced last month and already we have some additional mine development scenarios to consider.”

“The Lewis Mine uses large, diesel powered mobile mining equipment and is ideally suited to exploiting bulk-scaled orebodies like these Stockworks through the 5.5 metre-high and 5.0 metre-wide decline”, he said.

Mining contractor, Roche Mining, is developing the Lewis Mine via a decline built to full production specifications from the outset. Roche has to date advanced the decline at the rate of over 250 metres per month, well above Australian average rates of advance. Roche Mining successfully completed contract Stage 1 at the end of January, earning a safety bonus for Lost Time Injury Frequency rate of zero.

Mr Adams said: “Lewis Mine development commenced in July 2000 and, subject to successful conversion of inferred resource to proven reserve, has been scheduled to commence production in the December 2001 quarter. The decline continues its advance towards the original target zone on the Inglewood Lode. We will consider the merits of additional development in order to access the Rands Dyke Stockwork, during the June quarter after evaluating results from further drilling and exploratory development around the planned Lewis Mine workings.”

Rands Stockwork structure was first identified as “Stockwork Zone 4” in surface diamond drillholes last year. It occurs along the western margin of the major Rands Dyke, which has been traced for over 300 metres north-south. This stockwork zone has only been recently drill-tested where it passes through the “Productive Beds” rock types that are conducive to the formation of stockwork gold orebodies.

Another stockwork structure occurs on the eastern margin of the 10 to 15 metres wide Rands Dyke but has not yet been tested within the “Productive Beds”.

The historical record shows that the old-timers mined the Rands Dyke structures in localised high-grade places but the vast bulk of the structure remains unexplored because the old timers’ small-scale manual mining methods could not handle such bulk-scale orebodies very successfully.

The following diagrams show the location of the new intercepts on Rands Dyke Stockwork relative to the Lewis Mine workings.

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Last Modified: Friday, 23-Aug-2002 08:55:16 EST