St. George escalates nickel sulphide exploration

Ongoing field work at the Desert Dragon North prospect has indicated evidence of granite structures which are interpreted to represent a granite dome. Similar dome structures are found at the Kambalda and Widgiemooltha nickel camps.

A late‐stage granite is interpreted to have intruded the base of the Stella Range ultramafic belt at the Desert Dragon North prospect. The uplift and deformation of the ultramafic belt results in the ultramafic sequences being draped over the granite, and the formation of distinct western and eastern ultramafic flanks.

Deformation of this nature can be favourable for nickel sulphide mineralisation. Folding and faulting can result in the thickening of the ultramafic sequences and the repetition of target basal contacts on the dome margins.

The original target area at the Desert Dragon North prospect, which includes the important DDNRC002 intersection of nickel sulphide veinlets (2m @ 1.08 % Ni), is the western flank of the Dome.

Drill hole DDD007 was drilled beneath the mineralised interval of DDDNRC002 during Phase 1 of the 2014 drilling campaign and encountered granite.

Importantly, nickel deposits have been found below such granite layers after drilling through the granite and re‐emerging in ultramafic. The Nepean nickel deposit at Coolgardie is one of the best examples of this.

The proximity of the nickel sulphide interval of DDNRC002 to the granite provides a strong case for further investigation of this shallow granite occurrence.

Further soil geochemistry and field mapping is planned for Desert Dragon North to better define the granite structures in this area.

St George is also using three‐dimensional (3‐D) inversions of magnetic data to map the magnetic ultramafic units and the non‐magnetic granites. This will allow a better appreciation of the complicated geological relationships within the Dome, provide a means for identifying ultramafic sequences masked by the granite and enhance future drill target selection in this area.

The eastern flank of the Desert Dragon North Dome was not investigated by the MLEM survey completed at Desert Dragon North earlier this year. This under‐explored area is now scheduled for coverage in the ongoing MLEM survey.

Cambridge North is one of the Company’s very important nickel sulphide prospects, covering 15 strike km of the fertile Stella Range ultramafic belt.

A MLEM survey is currently being conducted over this area by Newexco. Preliminary data indicates that several strong EM anomalies have been detected. The modelling of data is continuing.

The GSWA (Geological Survey of Western Australia) has also reported a stand‐out co‐incident Ni‐Cu soil anomaly in the prospect area with values of 171 ppm Ni and 93 ppm Cu (GSWA anomaly # 193412).

St George will complete a follow‐up soil survey over this area to test the extent of the GSWA anomaly.

Previous explorers in this area carried out exploration for nickel laterite rather than nickel sulphides.

A small nickel laterite resource (0.19 Mt @ 0.6 % Ni) was established in 2001 by shallow drilling (less than 50m)1.

Drilling identified thin surficial cover (less than 20m) and intersected bedrock MgO values of up to 41%.

The presence of high‐MgO ultramafics and thin cover sequences at Cambridge North, coupled with its location on the fertile Stella Range belt and very limited exploration to date of the bedrock, make Cambridge North a compelling and high priority prospect for nickel sulphide exploration.

The Cambridge North prospect is expected to provide multiple high‐value drill targets.

The ongoing regional MLEM survey at the East Laverton Property has identified EM anomalies on each of the three ultramafic belts across the project area. Only a small number of these EM anomalies on the Stella Range belt were tested in the Phase 1 drilling programme earlier this year.

The assessment and interpretation of the remainder of the EM conductors is continuing, using all available geological, geochemical and geophysical information as well as data from the recent drilling programme.

The MLEM survey has now been completed at the Bristol and Athena nickel sulphide prospects. It is currently at Cambridge North, which will be followed by Aphrodite and the eastern flank of the Desert Dragon North Dome.

We expect the review of EM anomalies to result in the generation of additional nickel sulphide drill targets which will be prioritised for drilling.

A further announcement by the Company regarding EM drill targets will be made soon.

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