PROJECT OVERVIEW

INTRODUCTION

The Davyhurst – Mt Ida Project is located approximately 120 km north west of Kalgoorlie within the North Eastern Goldfields of Western Australia.

The Project comprises 230 mineral tenements covering approximately 1420 square kilometres providing almost continuous coverage of approximately 150 strike kilometres of greenstone sequences prospective for gold as well as sulphide nickel and base metal mineralisation. Previous production from tenements within land package is approximately 1.6M ounces of gold from 30 principal deposits.

The project has a 1.2Mtpa CIL processing plant, and associated infrastructure including mains power, camp and bore field at Davyhurst, and a 60 man camps and underground hoisting operation at Mt Ida. The project has been on care and maintenance by Swan since 2008.

The tenement package is accessed from Kalgoorlie by a series of formed, unsealed shire roads and haulage roads. Airstrips are located at Davyhurst (Callion) and Mt Ida (Bottle Creek).


PROJECT HISTORY

Gold was discovered in the district in the 1890’s by prospectors following greenstone belts northward from Coolgardie. Within the project area mining towns were established at Callion, Davyhurst, Siberia, Ularring, Mulline, Copperfield and Mt Ida. Between 1890 – 1950 numerous small to medium scale underground mining operations were established within the project area with cumulative production of approximately 600,000 ounces of gold.

Modern exploration and mining in the district commenced in the mid-1980s. Since that time a large number of companies have been involved or had operations in the area covered by the current project area.

Consolidation of the fractured tenement holding was undertaken by Swan’s predecessor Monarch Gold Mining Ltd during 2002-2006. This has provided the company with the critical mass needed to create a sustainable mining operation.




REGIONAL GEOLOGY

The Davyhurst – Mt Ida project area is located on a western branch of the Norseman Wiluna Greenstone Belt, The project straddles the boundary between the Kalgoorlie Terrane of the Eastern Goldfields Province and the Barlee Domain of the Southern Cross Province, which is defined by the crustal scale Ida Lineament. The project also includes portions of the Zuleika Shear which separates the Coolgardie and Ora Banda Domains within Kalgoorlie Terrane.


The Barlee Domain comprises a sequence of banded iron formation (BIF), shale, chert, and basalt poorly outcropping to the west against the basement granite. This lower unit is overlain by a thick monotonous sequence of tholeiitic basalt to the east to the Ida Lineament.



The Ida Lineament is a poorly defend structure, but is usually interpreted to be the contact of the western most ultramafic unit as defined by aeromagnetic’s. East of the Ida Lineament, greenstones of the Coolgardie and Ora Banda Domains and consists of a sedimentary and felsic volcanoclastic rocks to west with mafic to ultramafic volcanic’s and felsic to the east. The project is bounded by basement granite and gneiss terrane. Internal to the greenstone belt there are a number of granite intrusives of various ages. The most dominant granite is the Ularring Granite located midway between the Davyhurst and Riverina area.


MINERALISATION

GOLD

Gold mineralisation is the principal target within the project and occurs across all geological domains within the project.

Bedrock gold mineralisation within the project is structurally controlled, generally associated with mafic and Hi MgO volcanics and intrusives.


Two principal deposit types are present:

- Brittle fracture quartz veining associated with biotite alteration and minor sulphide mineralisation. This sytle is typically developed on the western side of the project area;

- Lode style silica biotite pyrite altered shear zones with minor quartz veining which are typically developed down the eastern side of the project area.

Recent discovery of gold mineralisation adjacent to the mafic granite contact on the north west corner of the Ularring Granite at the Giles Deposit highlights the potential of further discoveries to be made on the margins of or within granite bodies within the project area.


Deposit Measured Indicated Inferred

Total

  (‘000t) g/t Au (‘000t) g/t Au (000t) g/t Au (‘000t) g/t Au (‘000 Oz)
Callion 86 2.8 83 2.3 169 2.6 14
Federal Flag 32 2.0 112 1.8 238 2.5 382 2.3 28
Golden Eagle 345 2.5 311 2.6 656 2.5 54
Lady Gladys 1,858 1.9 190 2.4 2,048 1.9 128
LOI U/G 74 4.3 180 4.2 254 4.2 35
Makai Shoot 1,985 2.0 153 1.7 2,138 2.0 136
Salmon Gums 199 2.8 108 2.9 307 2.8 28
Sunraysia 175 2.1 318 2.0 493 2.0 32
Waihi 805 2.4 109 2.4 914 2.4 71
Walhalla 448 1.8 216 1.4 664 1.7 36
Walhalla North 94 2.4 13 3.0 107 2.5 9
Mt Banjo 109 2.3 126 1.4 235 1.8 14
Macedon 186 1.8 186 1.8 11
Iguana 690 2.1 2032 2.0 2722 2.0 177
Lizard 106 4.0 75 3.7 13 2.8 194 3.8 24
Sand King 516 3.1 935 3.0 1451 3.0 142
Missouri 98 1.7 831 2.0 909 2.2 1838 2.1 123
Palmerston/Camperdown 118 2.3 174 2.4 292 2.4 22
Berwick Moreing 50 2.3 50 2.3 4
Black Rabbit 434 3.5 434 3.5 49
Theil Well 18 6 18 6 3
Riverina Pit 941 2.4 1664 2.5 2585 2.5 205
Forehand 386 1.7 436 1.9 822 1.8 48
Silver Tongue 155 2.7 19 1.3 174 2.5 14
Mt Ida U/G 121 17.7 138 13.3 259 15.4 128


Table 1 - Swan 2008 Resource Figures