History & Exploration – The Conrad silver mine is situated about 25 km south of the town of Inverell, in northern NSW. Malachite's existing tenements cover approximately 675 km² (Figure 1) and all are held 100% by the Company.

Historical workings were developed mainly on the Conrad Lode, which was accessed through the Conrad, Moore, Davis and one or two minor additional shafts over about 1.5km of strike length. Some ore also came from the King Conrad and Alwell’s Lodes, each with an access shaft. The deepest mining is the bottom of the Conrad main shaft at 270m below surface but most of the level development and stoping is a lot shallower than that. The first production period extended from 1898 to 1912, when the mine closed due to industrial relations problems. It was then largely inactive until 1948, when Broken Hill South Ltd. commenced underground development. The mine resumed production from 1955 to 1957, but then closed due to falling lead prices; it has been idle ever since. The recorded average grade of historical production was 600g/t silver, 1.5% copper, 8% lead, 4% zinc and 1.5% tin and total production was 3.5 million ounces of silver, or about double that on a silver equivalent basis. Analysis by Malachite has shown that the rare metal, indium, whose value equals or exceeds that of silver, is also a significant component of the mineralisation at Conrad.

Malachite has been exploring at Conrad since 2003, with a major step up in activity from 2006, when resource drilling began. That drilling has been focussed within, beneath and along strike from the old workings that make up the historic Conrad Mine. To date, approximately 25,000 metres of reverse circulation percussion and diamond drilling has been completed, in 107 holes. Based on Malachite’s drilling, a revised mineral resource estimate was prepared by the Company’s consultants in late 2008. That work identified a resource containing 9.6 million ounces of silver or 19.2 million ounces on a silver equivalent basis. A full report on mineral resource estimation was released to the ASX on 16 December 2008 and a copy can be accessed here.

In the first half of 2009 the Company has focussed its exploration of the extensions of the Conrad Lode, which has now been mapped by geophysics for a distance of 2.3km further to the southeast of the most southeasterly drill hole. There are indications that the lode continues beyond our mapping in that direction and old mine lease data suggest there could be a split into two lodes further southeast. Importantly too, Malachite’s mapping has identified a substantial additional lode that seems to split off the main Conrad Lode within the newly mapped but not yet drilled area, in a manner reminiscent of the King Conrad/Conrad split at the northwestern end of the system, which is where the best mineralisation encountered to date has been intersected by drilling.

Conrad Lode – The greater part of the delineated mineral resource at Conrad is contained within the Conrad Lode, which is the dominant feature of the Conrad system. This main lode has now been drilled over a strike length of 2.2km and to a maximum depth of 500m below surface. Importantly, the mineralisation in the Conrad Lode is open in both directions along strike (but especially to the southeast) and at depth. Most of the metal value in the lode is contained within a narrow, high grade core zone, generally between 0.5 and 1m wide, that ranges from dominantly massive sulphide, with minor quartz, to dominantly quartz, with subordinate sulphides. At the northwestern end of the Conrad Mine area the ore minerals in the lode are principally sphalerite and galena, with some chalcopyrite, cassiterite and stannite. Silver is present mainly as tetrahedrite, pyrargyrite and acanthite. Gangue minerals are mainly pyrite, pyrrhotite, arsenopyrite and quartz. At the southeastern end of the Conrad Mine area the lode tends to be somewhat different, with subordinate galena and minor sphalerite and more abundant chalcopyrite, stannite and cassiterite, in a mainly quartz-pyrite gangue.

In most places where it has been intersected in drilling the high grade core of the Conrad Lode is contained within a lower grade envelope that is expressed as a zone of disseminated sulphides and narrow (1 to 20mm) sulphide veinlets within altered granite. The mineralised envelope can be developed over widths ranging from 1m to as much as 5m and its presence means that dilution of the high grade core zone at the mining stage would be by mineralised rather than barren material.

King Conrad Lode – This lode occurs only at the northwestern end of the Conrad Mine area and seems to represent a split off the main lode (Figure 4). Mineralogically it is fairly similar to the nearby Conrad Lode, although it tends to be narrower and can be of very high grade. For example, drill hole CMDD50 intersected the King Conrad Lode from 84 to 85.17m for a 0.5m true width intercept that assayed 1,715g/t Ag, 3.9% Cu, 16.1% Pb, 5.0% Zn, 3.4% Sn and 79g/t In.

A mineralised envelope is present at the King Conrad Lode but it also tends to be narrower than in the Conrad Lode case, except near the confluence of the King Conrad and Conrad Lodes. Although only about 15% of the mineral resource so far delineated at Conrad is contained within the King Conrad Lode it is quite an important component as it is near surface and should be readily accessible through a refurbished King Conrad shaft. The King Conrad Lode is still open to the northwest, although it seems to have narrowed down to probable sub-economic widths. Down dip it appears to merge with the Conrad Lode at about 300m depth.

Greisen Zone – This body of mineralisation occurs between the Conrad and King Conrad Lodes at the northwestern end of the Conrad Mine area over true widths ranging from about 20m to 40m. The mineralisation within the Greisen Zone is generally of lower grade (around 100g/t silver equivalent) compared with the narrow lodes and is similar in style to that in the envelope zones that surround the two main lodes. Sulphides occur as disseminations and small veinlets, ranging from weakly to strongly developed and locally within the Greisen Zone there are wider high grade veins whose affinities are uncertain.

Mineralogically the Greisen Zone differs significantly from the high grade lodes. The ore minerals are galena, sphalerite and cassiterite, with the silver occurring at least in large part as native silver, while the gangue minerals are pyrite and pyrrhotite, all contained in a siliceous and micaceous (i.e. greisenous) host rock. There is virtually no copper and arsenopyrite is very subordinate.

Only about 8% of the interim resource estimate is contained within the Greisen Zone but it is an important part of the total because the near surface part of the body, which crops out a little to the northwest of the King Conrad shaft, maybe amenable to low cost open pit mining. Moreover, a pit to extract the upper part of the Greisen Zone would also allow some of the high grade parts of the nearby Conrad and King Conrad Lodes to be extracted in this way. This could significantly improve mining economics for Conrad as a whole.

Future Work – Most of the drilling completed to date within the Conrad Lode is widely spaced (commonly holes are 100m apart along strike and down dip), so much of the resource delineated within this lode is currently in the Inferred category under the JORC Code. Furthermore, some high grade intersections have not been included in estimates of the higher grade resources due to insufficient drilling density. Future drilling will therefore be aimed at upgrading the inferred resource by infill drilling and adding to the inventory of higher grade material by surrounding currently isolated high grade intersections with closer spaced drilling. The lode confluence to the southeast, that appears to replicate the King Conrad/Conrad split, will also be a high priority target.

Land Holdings – In addition to the tenements held by the Company under the Mining Act, Malachite owns a freehold property, known as “Jadree”, which adjoins the Conrad mining leases at their southeastern end. Jadree includes a renovated residence and approximately 340ha of freehold land. The residence is currently being used as a field camp and office for Conrad, while adjoining land is being utilised as a drill core logging, handling and storage area. In the longer term it is envisaged that some of the Jadree land would be used for Conrad mine infrastructure, including a mine office, plant site, tailings dam and related facilities.

More photos from the Conrad Project can be found in the Photo Gallery.