2010 Exploration Program

2010 - Exploration Programme

A total of 3 holes were completed, with a fourth hole partially completed (out of a planned 10) before drilling operations were suspended due to the impact of Hurricane Igor. Drill hole locations are shown in Figure 1, with details of the holes in the table below.

Table 1 - Drill Hole Locations Aries Prospect 2010

(1) Hole SRK_14 was initially drilled to 26m before being abandoned as a result of a lost drill string, the rig was moved 1m and the hole restarted.

(2) Hole SRK_034 was being drilled at the time work was suspended and as a result it is short of its planned depth. Approximately 20m of core from this hole was also lost.

As can be seen from Figure 1, the holes were drilled in a line east to west across the mineralised zone, adding to several drill holes previously completed on the same line. The azimuth of the holes was about 270 degrees, and the inclination was about 55 degrees to the west. Drilling on this line now covers 400m across strike.

Figure 1 – Drill hole Location Plan – Aries Target

Aries Prospect - Key Intercepts & Results

Key Ta-Nb intercepts for the three completed holes are shown in Table 2 below:

Table 2 – Key Drill Hole Intercepts Nb  & Ta 

Hole SRK_035, the western-most hole, generally returned lower Ta-Nb grades. This hole was targeted to test an area of high Rare Earth Element (REE) grades identified from previous surface sampling. The lower Ta-Nb can be attributed to reduced abundance of altered syenite and hence pyrochlore content. However REEs and, to a lesser extent zirconium (Zr), appear to be concentrated in the pegmatite intrusives in this locality. (Refer to Table 3).

The major REE intercepts presented as Total Rare Earth Oxide (TREO) are shown below in Table 3. Results for rare earths have been presented separately as the better grade REE results are not always coincident with the higher Ta-Nb results.

Table 3 – Key Drill Hole Intercepts TREO 

(1) TREO is equal to the sum of LREO and HREO +Y203.

High grade REE intersections are presented in two main areas, firstly in the pegmatite intrusives, notably at greater than 60m in the western margins of the drilling section (Refer to figure 1), and secondly generally scattered throughout the drill holes, slightly more concentrated towards the west of the intrusion.

Geological Interpretation

A picture of the mineralisation at the Aries Prospect has begun to emerge which that suggests that the Ta-Nb mineralisation is only weakly correlated with REE mineralisation.

In the central part of the intrusion, where Ta-Nb mineralisation is most widespread, lithology is predominantly altered syenite, showing minor intrusions of pegmatite and diorite dykes.

High grade REE intersections are concentrated in the pegmatite intrusives at depth in the west of the intrusion, but are also scattered throughout the drill holes, gradually reducing in grade towards the east (Refer Figure 2).

Figure 2 - Geological Interpretation - Aries Prospect

It is evident that there maybe distinct REE and Ta-Nb zones within the larger mineralised area.

A mineralogical study completed in December 2011 confirms the main associations of Ta-Nb minerals to be in the coarse-grained pegmatite syenite with the majority of the Ta-Nb mineralisation held within pyrochlore group minerals whilst the main REE minerals are zircon, bastnasite and monazite.

Mineralised lenses of Ta-Nb mineralisation have been interpreted to strike and dip broadly parallel to the Base Metal Zone (“BMZ”) (approximately 45˚ towards the east). A number of these lenses are mineable widths with potentially economic grade.

Figure 3 - Ta & Nb Mineralisation - Aries Prospect

Higher grade Ta and Nb mineralisation appears to be concentrated in the upper sections of the drill holes (towards the top of the intrusion), although mineralisation extends down-hole to a depth of 185m. A statistical analysis confirms the close spatial relationship between Ta and Nb.

Initial observation suggests the presence of possible higher grade lenses (as layers within the intrusive complex) that appear to strike and dip broadly parallel to the BMZ. Refer to Figure 3.

The current geological model suggests that the BMZ post-dates the initial Ta-Nb mineralisation, the BMZ may have acted as a favourable host or mineralogical trap for remobilised Ta and Nb following intense hydrothermal activity.

Drill hole SRK_035 was drilled to the west to follow up a trend observed from the surface geochemical sampling that REE grades trended higher to the west. The results from the bottom of this hole, which was angled to the west included 81m @ 3,771 ppm TREO from 50m to 131 m (including 25m@ 5,031 ppm TREO) indicating that high grade REE mineralisation may continue to occur further west.

There appears to be a correlation between high grade REE and Ta-Nb mineralisation in certain areas, but not in others, whereas there is relatively close correlation between the REE and Zr grade distribution.

Initial modelling of the highest REE grades revealed potential flat-lying lenses that cross-cut the Ta-Nb east-dipping horizons. Refer to Figure 4.

Figure 4 – REE Mineralisation – Aries Prospect

Typically the TREO comprises 85-90% LREO and 5-10% HREO and 10% Y2O3 with the principal LREO minerals present (as oxides) being cerium (CEO 45%), lanthanum (LAO 25%), and neodymium (NDO 15%). An example of the composition of TREO based on the average rare earth oxide assay results taken from averages of all results from the 2010 drilling is depicted in Table 4 below.

Table 4 : TREO Composition by percentage

Commentary

Whilst the scope the 2010 drill program at the Aries Prospect was unfortunately curtailed by the impact of Hurricane Igor, which caused widespread damage across Southern Greenland and Canada’s Atlantic Coast, the board believes that the outcomes of the program and other work carried out recently, have been extremely positive and have laid a good foundation for activities in  2011.

Generally the mineralisation at the Aries Prospect (where a mineralised zone of up to 500 million tonnes was estimated by GEUS) is diverse and wide spread, with generally lower grade material within a very large envelope.  Possibly lending its self to a bulk mining opportunity. However within this envelope it is thought that several higher grade zones may be present. Further work is required to better understand the resource potential at Aries.

An important outcome from the 2010 program is that high grade Ta-Nb and REE mineralisation has been shown to occur in a series of lenses that show good continuity and a number of these lenses are mineable widths with potentially economic grade.

The exploration target at Aries is thought to be 2-300 meters wide, 1,500m long (running N-S) and up to 400m deep. The work from 2010 has been shown to be open to the east and west.

The Company has an exciting 2011 exploration program planned, including around 4,000 meters of drilling, which will extend drilling north and south for some 1,500 meters from the currently drilled area to confirm the strike of the mineralised zone.  Data from this work should allow the Company to estimate the maiden JORC Inferred Mineral Resource at the Aries Prospect.