Diatreme : Clermont Copper/Gold Project

The Clermont Copper/Gold Project (EPM 17968) is situated around the town of Clermont in central Queensland. The project is prospective for porphyry and stratabound bulk tonnage copper/gold deposits along with mesothermal gold deposits.

Introduction

The project area covers numerous prospects including the Rosevale Project and the historic Peak Downs Copper Mine.

The three main targets comprise:

Rosevale Porphyry Corridor, which has potential for porphyry-related copper, gold and molybdenum;
Structurally controlled gold (vein) mineralisation (western and eastern parts of tenement); and
VMS-related base metal mineralisation associated with the historic Peak Downs copper mine.

On 5 August 2021, Diatreme announced a farm-out with Metallica Minerals Limited (ASX:MLM) under which Metallica can earn a 25% interest in the project by sole funding exploration expenditure of A$300,000 by 31 December 2021.

Metallica can earn an additional 26% interest by sole funding exploration expenditure of an additional A$700,000 by no later than 12 months after 31 December 2021. After spending this amount, Metallica has the right to sole fund the first A$1 million of joint venture expenditure to earn an additional 24% interest.

Should Diatreme and Metallica make the decision to mine, Diatreme will be granted a 1% net smelter royalty.

On 26 October 2021, Metallica requested an extension to the initial expenditure stage, which was agreed by Diatreme and extended to 29 April 2022. Metallica announced on 19 January 2022 its plans to undertake drilling at the project during the first quarter 2022, subject to weather conditions.

The key terms of the MOU now comprise:

• Metallica to invest a minimum of $300,000 on exploration expenditure no later than 29 April 2022 to earn a 25% interest in the project;

• Should Metallica commit to continue to invest in the project, by investing a further $700,000, Metallica will gain an additional 26% interest;

• Metallica will then have the right to invest a further $1 million in the joint venture to hold a 75% interest;

• The partners will then be entitled to contribute further funding to the project on a pro-rata basis.

Clermont project overview diagram

Overview

The Peak Downs Copper Mine was worked between 1863 to 1877, with 17 000 tonnes of copper reported to have been produced from the mining and smelting operations on site. The Peak Downs mine workings lie within the Bathampton Metamorphics and exploited supergene mineralisation from VMS related mineralisation.

Previous gold mining activity in the region included mining of placers in Permian conglomerates and from Tertiary and Cainozoic alluvial deposits. Gold was discovered in gullies to the south of Clermont township in 1861 and by 1862 mining extended from McDonalds Flat in the southeast to Hurley's Lead in the northwest. The main centres of alluvial mining were in the area adjacent to the Clermont township.

Between 1877 and 1901, recorded gold production amounted to 5,458 kg from deep leads and other alluvial sources and only 308 kg from quartz lodes. Production from the Clermont Goldfield during the period 1862 to 1901 is documented as 8 200 kg of gold. Mining activity declined after 1910 and by the 1920s had almost ceased. In 1931 a new lead, discovered at Miclere, sparked a revival of mining, which continued through to the mid 1950s.

During the 1980s and early 1990s small to medium-scale alluvial mining was carried out at McDonalds Flat, Bathampton, and Expedition Creek. Total gold production for the Clermont area to 1993 is estimated to be about 14,000 kg. Three main targets are under investigation by Diatreme:

Rosevale Project (gold, copper-molybdenum);
Mesothermal gold reefs; and
Peak Downs copper mine.

Rosevale Project

Rosevale project gold found in gully

The Rosevale Porphyry Corridor (RPC) has the potential to host a large buried porphyry copper - gold - molybdenum mineralised system. This prospect was discovered by Diatreme in 2008 and work has included deep diamond core drilling which has assisted in identifying porphyry related copper/molybdenum and breccia hosted silver/lead/zinc/gold mineralisation.

Recent exploration over Clermont has resulted in an improved understanding of the geology and mineralisation of the Rosevale Porphyry Corridor. This work has highlighted drill-ready porphyry copper targets. At the Gollan Prospect toward the northern end of the Rosevale Porphyry Corridor, Diatreme has defined from drilling a wide zone of haematite-bearing propylitic alteration of the intrusives, located in a zone of abundant secondary carbonate copper on surface. The geological setting is reminiscent of the high grade Ridgeway deposit at Cadia NSW.

Exploration in 2012 resulted in the discovery of the Savannah Prospect to the southeast of the Rosevale Porphyry Corridor. Mapping and rock chip results from Savannah have return significant results of up to 25ppm gold, 80ppm silver, 1.8% copper, 1.4% lead, and 1.4% zinc over a strike length of 1.4km.

Rosevale project gold found in gully

A number of structural trends are known within the tenement area and the Anakie Inlier generally, but the most significant of these are the faults and shear zones that have associated silicification with gold mineralisation. Gold mineralisation in the Clermont area occurs in a number of geological environments. Quartz reefs in the Anakie Metamorphics sequence are known to contain gold mineralisation and deposits of this type accounted for some historical gold production.

Most of the past exploration on the known gold bearing quartz vein systems within the Anakie Metamorphics has shown these to be small. These veins are the likely source of at least some of the alluvial gold deposits in the Clermont area. However the amount of alluvial gold at Clermont is not in accordance with the known gold bearing quartz vein and shear occurrences.

This is the case immediately south of Clermont where there is no significant known source for the amount of gold that was mined from the rich Wild Cat lead and other leads in this area. This suggests that, either there are undiscovered gold bearing quartz veins in this area, or another hard rock source exists for the gold. It is the potential for an alternative hard rock source for the gold found in some of these alluvial deposits near Clermont that has driven gold exploration in the district.

Peak Downs

Copper was mined at the Peak Downs Copper Mine following its discovery in 1862 and during the period to 1877, 17,000 tonnes of copper (100,000 tonnes @ 17% copper) is reported to have been produced from the mining and smelting operations on site.

The Peak Downs mine workings are situated 6km south of Clermont with Diatreme's tenement and copper mineralisation appears to be of a volcanic hosted massive sulphide type with a basic volcanic association that has a supergene cap. Mineralisation principally consists of pyrite and chalcopyrite associated with a narrow banded siliceous iron formation.

A number of historic resource estimates have been estimated for Peak Downs that require further work to be JORC compliant. These estimates indicate Peak Downs contains approximately 30,000 tonnes of copper close to surface that would be capable of being mined and processed by a conventional heap leach solvent extraction - electrowinning (HL SX-EW) mining operation.

Further drilling and bulk sample test work is required for the resource to be JORC compliant and for feasibility studies to be carried out. Copper has been mined historically from many smaller underground mining operations throughout the Clermont tenement and these have been the subjected to numerous exploration programmes to date over the Clermont tenements.

Further exploration is warranted over Clermont particularly over the Rosevale Porphyry Corridor, and Peak Downs for copper, Savannah for gold and base metals and at the Palm Trees Prospect (near the historic McDonalds Flat mines) for gold.