Nagambie Mining Limited - Exploration

The REDCASTLE PROJECT with an area of 33 km² in the northern part of EL 3316 (first granted to Nagambie Mining Ltd on the 29th December 1992 and is renewed on an annual basis) covers the old Redcastle Goldfield. The Redcastle Goldfield lies in a fault-disrupted anticlinal structure. Oxidation of sulphides occurs to around 70 metres and the gold mineralisation is hosted by both north-south and east-west fractures. This makes it an attractive area for shallow open pit exploitation.
	The historic Redcastle Goldfield was discovered in 1859 and consisted principally of quartz reef mining of up to 117 mines and alluvial workings. Historical production records are incomplete however some mines reportedly produced up to 1088 kg of gold. Operations ceased by 1902 however fossicking was still continuing in creeks in the Redcastle area during the 1930’s. Redcastle has been subject to mineral exploration by various companies since 1985. A 47 costean program testing continuity of mineralisation along strike from old workings on each of the reef lines was completed in 2008. All costeans were oriented at right angles to the reef lines. Some significant results although surface grades are low, but the scout drilling carried out in 1995 and 2006 and experience in other central Victorian goldfields suggest that these low surface grades reflect supergene gold depletion at surface, and higher gold grades can be expected within a few metres below surface in the oxidised zone.

	The Company has collated the results from the costeaning program with all previous relevant data, especially all past drilling results, to create a 3D model of this productive goldfield. Better scout drilling results from 1995 and 2006 include 7m at 2.0 g/t (gold) from 16m (depth), 10m at 2.5 g/t from 22m, 6m at 2.4 g/t from 51m and 8m at 5.2 g/t from 36m. An example of the prospect evaluation work is as follows: Redcastle Fault Zone North This prospect is located on the western limb of the Redcastle Anticline. Costeaning has revealed a predominant sandstone package dipping moderately to steeply west, disrupted by strike parallel faults/shears but dipping moderately to the east, forming a high angle intersection. Gold mineralisation occurs at or close to sandstone siltstone contacts where these have been disturbed by faulting. Mineralisation follows the fault zones, so it appears that the previous drilling to the east was not in a favourable direction. Six (6) prospect areas outlined from the past work are to be tested in five target corridors by a 20 costean program as shown on the accompanying plan.