Woodlawn Drilling Update Kate Lens Returns Massive Sulphides

Sampling techniques

• Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.
• Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.
• Aspects of the determination of mineralisation that are Material to the Public Report.

• Samples from the diamond-core holes are being taken from NQ sized core, and sampled on a nominal 1 metre basis.  The core is cut in half along the core orientation line and then one portion is quartered for assaying, the half core is preserved for metallurgical testing and the remaining quarter is retained as reference material in the core trays.
• Samples from the RC holes are being produced from a 4.5 inch sized bit and sampled on an initial 4 metre down-hole composite basis, with zones of mineralisation being samples over 1 metre intervals.  The 4 metre composites are taken via a spear method into the plastic sample bags, while the 1 metre samples are split via a riffle splitter.
• These sampling methods are standard industry methods and are believed to provide acceptably representative samples for the type of mineralisation likely to be encountered.

Drilling techniques

• Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details.

• Diamond-core drilling is being undertaken by a Mc Culloch DR800 rig with HQ sized core being drilled to approximately 200m before switching to NQ size. Various techniques are employed to ensure the hole is kept within limits of the planned position.  The core is laid out in standard cores trays.
• The RC drilling is being undertaken by a Schramm T450WSI rig that is drilling a 4.5 inch hole with face sampling hammer.  A booster and auxiliary compressor is used to increase the volume and pressure of air.  The 1 metre samples are fed through a cyclone and riffle splitter before passing into green plastic bags which are laid out in rows on the ground.  A dust suppression system is in use.

Drill sample recovery

• Method of recording and assessing core and chip sample recoveries and results assessed.

• The core is transported to an enclosed core logging area and recoveries are recorded.  Recoveries to date have been better than 95%.  The core is orientated and marked with 1 metre downhole intervals for sampling.
• The recoveries for the RC drilling are also recorded and have mostly been 100% with no recovery issues being recorded.

Logging

• Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

• Both diamond core and RC holes are fully geologically logged by geologists. Geotechnical logging is also being undertaken on selected sections of the core.  Samples for metallurgical testing are being kept in a freezer to reduce oxidation prior to being transported to the metallurgical laboratory.

Sub-sampling techniques and sample preparation

• For all sample types, the nature, quality and appropriateness of the sample preparation technique.

• All core samples are crushed then pulverised in a ring pulveriser (LM5) to a nominal 90% passing 75 micron. An approximately 250g pulp sub-sample is taken from the large sample and residual material stored. A quartz flush is put through the LM5 pulveriser prior to each new batch of samples.
• The RC samples are pulverised directly in the LM5 ring pulveriser.

Quality of assay data and laboratory tests

• The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.
• Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.

• Sample preparation and assaying was conducted through ALS Laboratories, Orange, NSW.
• Gold is determined by 30g fire assay fusion with ICP-AES analysis to 1ppb LLD.
• Other elements by mixed acid digestion followed by ICP-AES analysis. 
• Laboratory quality control standards (blanks, standards and duplicates) are inserted at a rate of 5 per 35 samples for ICP work.

Verification of sampling and assaying

• The verification of significant intersections by either independent or alternative company personnel.
• Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.
• Discuss any adjustment to assay data.

• An internal review of results was undertaken by company personnel.  No independent verification was undertaken at this stage.
• All field and laboratory data has been entered into an industry standard database using a contract database administrator (DBA) in the Company’s Perth office.  Validation of both the field and laboratory data is undertaken prior to final acceptance and reporting of the data.
• Quality control samples from both the Company and the Laboratory are assessed by the DBA and reported to the Company geologists for verification.  All assay data must pass this data verification and quality control process before being reported.

Location of data points

• Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

• The drill collars were initially located with a combination of handheld GPS and licenced surveyor using a DGPS system, with accuracy of about 1m.  The final drill collars are “picked up” by a licenced surveyor. 

Data spacing and distribution

• Data spacing for reporting of Exploration Results.
• Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.
• Whether sample compositing has been applied.

• The diamond drilling is mostly following-up in various directions from previous intercepts with a nominal intercept spacing of no less than 40m.  This drill hole spacing will be sufficient to provide Mineral Resource estimates in the future.

Orientation of data in relation to geological structure

• Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.

• The drilling orientation is designed to intersect the mineralised lenses at a close to perpendicular angle.  The mineralised lenses are dipping at approximately 50-70 degrees to the west and the drilling is approximately at 60 degrees to the east.  This will vary from hole to hole.

Sample security

• The measures taken to ensure sample security.

• Samples are being secured in green plastic bags will be transported to the laboratory in Orange, NSW via a courier service or with Company personnel. 

Audits or reviews

• The results of any audits or reviews of sampling techniques and data.

• No audits or reviews have been undertaken due to the early stage of the program.

Mineral tenement and land tenure status

• Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.
• The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

• The Woodlawn project is located 250km south-west of Sydney in the state of New South Wales.  The area is near the top of the Great Australian Dividing range and has an elevation around 800m above sea-level.  The mineral and mining rights to the project are owned 100% by the Company through the granted, special mining lease 20 (SML20).  The lease is completing its second 20 year term on the 16 November 2014 and the company has applied for an extension of this term for a further 20 years.  The Company is not aware of any reason why SML20 will not be renewed.
• The project area is on private land owned by Veolia who operate a waste disposal facility that utilises the historical open-pit void.  An agreement is in place with Veolia for  the Company to purchase certain sections of this private land to facilitate future mining and processing activities.  A cooperation agreement is also in place between Veolia and the Company that covers drilling and other exploration activities in the area.

Exploration done by other parties

• Acknowledgment and appraisal of exploration by other parties.

• The Woodlawn deposit was discovered by the Jododex JV in 1970 and open-pit mining began in 1978 and continued through to 1987. The project was bought outright by Rio Tinto (CRA) in 1984 who completed the open-pit mining. Underground operations commenced in 1986 and the project was sold to Denehurst Ltd in 1987 who continued underground mining up until 1998.  The mineral rights to the project were then acquired by TriAusMin Ltd in 1999 who conducted further studies on a tailings re-treatment and revived underground operation.  Heron took 100% ownership of the project in August 2014 following the merger of the two companies.  Some 980 surface and underground drillholes have been completed on the project to date and several studies undertaken.

Geology

• Deposit type, geological setting and style of mineralization.

• The Woodlawn deposit comprises volcanogenic massive sulphide mineralisation consisting of stratabound lenses of pyrite, sphalerite, galena and chalcopyrite.  The mineralisation is hosted in the Silurian aged Woodlawn Felsic Volcanic package of the Goulburn sub-basin on the eastern side of the Lachlan Fold Belt.

Drill hole Information

• A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:
  • easting and northing of the drill hole collar
  • elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar
  • dip and azimuth of the hole
  • down hole length and interception depth
  • hole length.

• A table detailing the drill hole information is given in the body of the report.

Data aggregation methods

• In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.
• Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

• Assays are currently pending for the mineralised intercepts and so no data aggregation methods are reported here.

Relationship between mineralization widths and intercept lengths

• These relationships are particularly important in the reporting of Exploration Results.
• If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.

• The massive sulphide zone intercepted in hole WNDD001 is at an angle to the drill axis and therefore the true width is estimated be some 0.75 of down-hole width.  That is, a down-hole intercept of 16m equates to a true width of 12m.  This is only an approximation at this stage and the will be better estimated as the orientation of the lenses is better defined.

Diagrams

• Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

• A long-section showing the hole positions relevant for current phase of exploration is included in the release.  Other maps and diagrams showing the location of the Woodlawn Project are included in other recent Company releases.

Balanced reporting

• Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

• The reporting is considered to be balanced and all relevant results have been disclosed for this current phase of exploration.

Other substantive exploration data

• Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

• There is no other substantive exploration data that has been generated for inclusion in this report.  The drillholes are being cased with 40 millimetre PVC for down-hole EM surveying which will take place in about 3 week’s time.

Further work

• The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling).

• Both the diamond and RC drilling has only recently commenced at the Woodlawn Project and a systematic program is planned to test the up-dip and down-dip extensions to the known ore lenses.