Regional Setting
The Pine Creek Inlier is an area of mostly sedimentary rocks dating to the Early Proterozoic Era (approximately 1,800 million years ago). It is one of a number of such sedimentary basins of similar age, geological history and gold endowment.

The Pine Creek Inlier is recognized in “The Geology of the Mineral Deposits of Australia and Papua New Guinea”, as the Australian Proterozoic basin with the greatest number of deposits containing more than 3 tonnes (100,000 ounces) of gold. In particular the gold deposits of the Tanami and Pine Creek regions have many characteristics in common. Anticlinal structures and persistent shear zones are major hosts. In the Company’s view the Pine Creek region displays all the key geological characteristics thought to be associated with gold deposits of the style, scale and grade of the +5 million ounce Callie gold deposit in the Tanami region.

The most prospective host rocks of the Pine Creek Inlier occur over much of the area of Australasia Gold’s tenements, at surface and at relatively shallow depth, but are often concealed by shallow transported overburden. The overburden has inhibited their effective exploration.

The Pine Creek Project
Australasia Gold’s Pine Creek Project includes a block of mineral claims covering the Glencoe gold deposit, tenements covering four satellite gold occurrences (plus extensions) in reasonable proximity to Glencoe, and a joint venture right to explore for and mine gold in prospective adjacent areas.

Past exploration expenditure at Glencoe alone exceeds $2.1 million.

Glencoe Deposit
The total of measured, indicated and inferred resources at the Glencoe deposit has been estimated as approximately 1.5 million tonnes (Mt) averaging 1.9 grams/tonne (g/t), containing approximately 90,000 ounces of gold, to 100m depth. The estimate was prepared in accord with the then current provisions of the JORC Code. The deposit displays many features characteristic of the quartz-vein hosted style of mineralisation which is particularly widespread in the Pine Creek Inlier (e.g. nterprise,
Union Reefs, Toms Gully, Woolwonga and Zapopan). The production histories and current resources of these deposits show the potential of this ore style to develop significant bodies of better grade. For example: Toms Gully (resources + production approximately 2.5 Mt averaging 8-9 g/t gold), Zapopan (resources approximately 0.3 Mt averaging 15 g/t gold) and Cosmo Howley: (7.5 Mt averaging 4.3 g/t gold – i.e. more than 1 million ounces, including a higher grade component of 2 Mt in excess of 6 g/t).

The Glencoe deposit was drilled to a maximum depth of 100 metres, and bulk sampled during the 1980’s. Some 70,000 tonnes of ore are recorded as having been excavated from four shallow trial pits. The records reveal the recovery of 37% more tonnes than was contained in the relevant part of the detailed resource model, without dilution of the estimated grade. From this it may be inferred that
the resource estimate is conservative as to tonnage, while the grades predicted from drilling and gold
recovery from oxidised ore were validated by the trial. Details are reported in the Independent Geologists Report (Section 5.4.2.) Only preliminary metallurgical tests were made on primary mineralisation, with variable results.

Each of the four shoots which make up the Glencoe resource remains open at depth, particularly in the easterly down plunge extension direction.

The Redbank Mineral Claim located three km to the west of Glencoe shows high gold values in the near surface gossan zone of an apparently stratabound gold occurrence (e.g. a costean intercept of 8m averaged 10.9 g/t gold, and a shallow drillhole intercept of 8m averaged 19.3 g/t gold). Limited reverse circulation (RC) drilling failed to locate the immediate extensions of this mineralisation.

Feasibility Considerations
It is the Board’s view that changes in mining and processing technology, gold price and cost structures since the original evaluation, and the exploration potential of the deposit, warrant a new feasibility study. Glencoe is situated in close proximity to all-weather road access and other regional infrastructure and services which should facilitate mining efficiency and cost management.

In order to determine how much of the Glencoe resource may be economic to mine, metallurgical testing of primary mineralisation and geotechnical studies to optimize pit design will be required, as well as environmental investigations and other work preparatory to permitting.

Barring currently unexpected developments in the feasibility investigation phase, and subject to the satisfying itself as to the profitability of mining and the availability of toll milling capacity, the Board anticipates Australasia Gold could be ready to commence production from the Glencoe deposit within 12 months of listing.

Pine Creek Exploration
Blocks of Mineral Leases cover each of Johns Hill, Star of the North, Great Northern and Great Western gold deposits. EL 24142 covers the strike extensions largely beneath alluvial cover of the mineralised structures hosting these deposits and other gold deposits in the district.

A joint venture with Softwood Plantations Pty Ltd in the McKinlay area approximately 30 km east of Glencoe grants to Australasia Gold a 100% interest in any gold mineralisation discovered in two exploration licences EL’s 22301 & 23824.

All of these areas are located within trucking distance of Glencoe. Most contain relics of historic mining. All contain features which are elsewhere associated with the major gold deposits of the region. Much of the area is concealed by blacksoil plain, diminishing the effectiveness of the reconnaissance previously undertaken by prospectors and explorers. The Company regards the areas as highly prospective for thinly concealed structurally controlled gold deposits of the Pine Creek - Tanami style.

Program for the Pine Creek Project
As soon as practicable after listing, the Company will commence a program to complete the feasibility study of mining at Glencoe, including drilling, dump sampling, metallurgical testing, detailed mine planning, and the estimation of ore reserves. Exploration drilling will target the intersection of mineralising structures with deeper, more prospective stratigraphic horizons. Environmental studies which may be necessary for permitting purposes will also be undertaken.

Initial exploration work will be principally geological in nature, including detailed review of past exploration results, regolith studies and field reconnaissance. Field programs, including bedrock geochemical and IP geophysical surveys, prior to drilling will commence in the second year.