SILVER

Malachite targets silver firstly because it is a precious metal and store of wealth. As such silver tends to follow gold as a “safe haven” in troubled times, although because the total silver market is much smaller than that of gold, silver tends to display more volatility than gold. Silver is also attractive to Malachite because it is an essential modern industrial metal, with very wide application and new uses appearing all the time. Silver is not toxic and its use in bio-medical applications, particularly as a bactericide and fungicide, represents a key area for future consumption growth.

The Company’s principal exposure to silver is at the Conrad Silver Mine project, located about 25km south of Inverell in northern New South Wales. Conrad is our flagship project and the one most likely to become a long life mine that could underpin our growth and development into a mid-tier Australian mining company. The mineralisation at Conrad is contained mainly in a polymetallic, narrow lode deposit where silver constitutes about 50% of total value, with the balance due to the associated copper, lead, zinc and tin. The rare metal indium is also present and may be a bonus at the production stage. A second style of silver mineralisation, much greater in width but lower in grade, has also been identified at Conrad and could be important for early mine life as it is potentially open pittable.

Approximately 25,000m of drilling has been completed at Conrad by Malachite and this has lead to the definition of 19.2 million silver equivalent ounces in a 3 million tonne resource, including 6.2 million ounces of silver equivalent in a 460,000 tonne high grade resource. Economic modelling indicates that doubling the high grade resource to around 1 million tonnes should provide a sufficient basis to move on to a definitive feasibility study and, if that study confirms economic viability, development of a new mine at Conrad.
More on Conrad ...

The Company also has some exposure to silver through its interest in the Rivertree project, located in far northern NSW.

TIN

Tin is a metal that has undergone something of a renaissance in recent years, driven mainly by its use in electronic solder, where its low melting point and non-toxic properties allow safe substitution for lead, which has traditionally been the main component of solder but is toxic and for that reason is being phased out of most solder applications. Today more than 50% of all tin consumption is for solder alone. The demand outlook for tin is very positive, not only for solder and the more traditional use in tin-plate, but also for other technology uses, such as plasma TV screens. At the same time, tin is in short supply and likely to remain so for the foreseeable future, sustaining a relatively high metal price for the long term.

All of which makes tin attractive to Malachite, especially as there is a long history of tin mining in eastern Australia, particularly in northern NSW, where so much of Malachite’s efforts are concentrated. We also like tin because is generally has favourable metallurgy, involving simple gravity-based processing. As such it is well suited to a small company, due to low capital and operating costs and the scope to start up on a small scale and expand in modular units once the technology is proven and a cash flow established.

Malachite has two key tin projects in the Inverell region of northern NSW: Elsmore, 20km east of town, and Delungra, 35km west of Inverell.

At Elsmore tin occurs both in hard rock greisen deposits and in alluvial deposits. Tin has been mined extensively in the Elsmore area since 1871 and there are numerous old workings throughout the district. Malachite has focussed most of its attention on the Newstead prospect at Elsmore, including the significant palaeo-alluvial deposit known as the ‘Karaula Lead’. More on Elsmore ...

Delungra, in contrast, is not well known for historic tin mining, although a few minor old workings are recorded. Malachite took up the Delungra area under an exploration licence because it perceived there to be unrecognised tin potential and that commitment has been rewarded with the identification of a promising new tin occurrence at the Standon prospect. More on Delungra ...

GOLD

Gold is an essential part of Malachite’s exploration portfolio because it is the most generally favoured store of wealth, it has a very high unit value and it offers relatively simple metallurgy, at least in most cases.

Malachite has been exploring for gold at Tooloom, located in northeast New South Wales, on and off for the last ten years or so. We were first attracted to the area by recognising that it is effectively a large historic gold field that escaped modern exploration until we came along. Most of the historic gold mining focussed on alluvial deposits and the last alluvial gold mine at Tooloom ceased operating as recently as 2001.

Our efforts have been concentrated on finding hard rock sources for the widespread alluvial gold. This has lead to the recognition that primary gold mineralisation at Tooloom is analogous to the intrusion-related gold deposits of the Tintina Belt in Alaska and the Yukon. Several targets of this type have been identified by Malachite, including especially Phoenix, which is a very large gold-bearing sulphide system. Other styles of mineralisation are also well represented at Tooloom, including stockwork quartz vein systems and mineralised shear zones, some of which are known to contain coarse grained free gold, which is either visible in outcrop of found in nuggets downstream from the source.

COPPER

Until early 2009 Malachite was farming in to the Volga Copper Project in the Mount Isa region of northwest Queensland. We have now withdrawn from that joint venture and currently have no specific copper exploration programs. However, we do like copper as a commodity for the long term because of its fundamental role in sustaining our standard of living. Over the next 12 months it is expected that new copper projects will be added to the Company’s exploration portfolio, with the Lachlan Fold Belt of NSW and the Mount Isa region of Queensland as prime target areas.