Western Highlands Province

EL 1613 – Mt Hagen

The Mt Hagen EL1613 is located near Papua New Guinea’s third largest city, Mt Hagen City, in the Western Highlands Province.

An excellent road network exists with infrastructures and others services easily accessible from Mt Hagen.  The EL covers prospective areas of the northwest-southeast striking mineralised Bismarck Fault Zone corridor which hosts numerous copper gold and other base-metal occurrences including the copper molybdenum Yandera deposit (127MT @0.7% copper) which is being progressed to Prefeasibility Study and Simbai gold deposits are located on the Bismarck and the Bundi Fault Zones.  The Kuta epithermal gold and base metal prospect is located immediately south of EL1613.

PNM was previously farming out a 60% interest in the Mt Hagen tenement to Eldore Mining Corporation (EDM). Subsequent to the end of the reporting period, PNM announced that it had acquired back its full interest in the Mt Hagen tenement. EDM has no further rights in relation to the tenement. EDM contributed a non-refundable total of $418,700 towards exploration on the tenement prior to cancellation of the agreement.

During the year several field programs were completed focussed on the definition of the Paglum and Kotna prospects.

Kotna Prospect

Kotna is underlain by volcanic units consisting of tuff, volcanic breccias, volcanolithic sediments and calcareous sediments. Both the volcanic and sedimentary units are later intruded by multiple phased porphritic diorites. Copper and gold occurrences are known to be spatially related to the diorite intrusions in the Bismarck Fault Zone. Field mapping at Kotna discovered extensive hydrothermal alteration and copper – gold – molybdenum mineralisation.

The following are discernible hydrothermal alterations in diorites;

Ø  Prophylitic alteration (chlorite + epidote +/- hematite + quartz + pyrite) assemblage. Epidote is widespread and dominant.

Ø  Phyllic alteration (sericite + quartz + pyrite assemblage).

Ø  Potassic alteration (K-feldspar and biotite) restricted to structures

Ø  Argillic (clay - kaolinite +/- pyrite +/- silica) restricted to major structures.

Copper Mineralisation styles noted include;

Ø  Disseminated pyrite + chalcocite +/- covellite (supergene) and chalcopyrite+/-bornite.

Ø  Discrete quartz + pyrite + chalcopyrite +/- chalcocite +/- covellite +/- bornite veins. Vein thickness ranged from 2cm to 20cm wide.

Ø  Stock-work quartz + pyrite + chalcopyrite + bornite veins ranged in outcrop from 1m to 40m wide zones.

Several significant copper mineralised structures were mapped at surface trending northwest and northeast, with discreet massive quartz – copper + sulphide veins being common.

Best continuous chip in outcrop copper results included;

Ø  21m @ 0.90% Cu, incl 3m @ 2.60% Cu in trench KNCT 07.

Ø  2m @ 1.27% Cu, 0.03g/t Au, & 10 ppm Mo in Trench KNTC54

Ø  6m @ 0.34% Cu, incl 2m @ 0.81% Cu in trench KNCT 036

Ø  2m @ 0.35 % Cu, 0.1g/t Au, & 130 ppm Mo in Trench KNTC59

Ø  8m @ 0.21% Cu, incl 3m @ 0.46% Cu in trench KNCT 029

Ø  9m @ 0.24 % Cu, incl 2m @ 0.56% Cu in trench KNCT 029

Best grab outcrop samples included:

Ø  3.1% cu in sample 734705

Ø  0.76& Cu in sample 633581

Ø  0.61% Cu and 0.13 g/t Au in sample 354015

Ø  0.24 % Cu in sample 633460

Ø  0.20 % Cu and 4.83 g/t Au in sample 734605

Two core holes (KNDD001 & 2) were completed for a total of 485.1m. The objective of the drilling was to test subsurface continuity of copper and base metal mineralisation in costeans which is seen to be hosted in sediments, volcanic units and in dacitic porphyritic intrusives.

Mt Hagen Drilling Collar Details

Mt Hagen Drilling Best Intercepts

Drilling intersected weak porphyry style mineralisation showing moderate to locally intense pervasive hydrothermal alteration, hosted by variably altered volcanic tuff. Drilling confirmed surface geological observations of porphyry style mineralisation. While the target porphyry mineralisation has not been intersected by these holes, important mineralisation and alteration patterns were logged.

Strong epidote and increasing sulphide materials were intersected in the deeper parts of  KNDD002.  Intense propylitic alteration with minor zones of advanced argilic alteration was seen in the majority of hole KNDD001. Widely, spaced narrow veinlets with quartz + pyrite + chalcopyrite + /- base metal were intersected in both holes.  PNM believes that the results demonstrate that the porphyry source is reasonably close, either below or to the side of the initial target area.

Detailed surface creek mapping and sampling, and a programme of ridge and spur soil sampling to cover areas to east and north of the Kotna prospect have commenced. PNM will continue reconnaissance exploration in the area over the ensuing year with the aim of identifying a drill program to identify the source of mineralization in the area.

Paglum Prospect

The Paglum prospect is underlain mostly by rocks of volcanic and sedimentary origin which have been intruded by Miocene granodiorite and by Pliocene diorites. A number of structures are evident trending northwest to southeast, appear tensional to Bismarck Fault Zone a major tectonic structure within the area. Gold, copper and base metal mineralisation are closely associated with northeast – southwest structures.

Mineralisation occurs as widely spaced quartz – sulphide veins, in mineralised structures and at the contact between intrusive and country rock. Two mapping teams completed a grid based soil sampling program, along with detailed outcrop mapping and sampling covering and area of 1.5km by 1.5km.

A total of 444 samples and 37 rock chip samples were collected. Consistent elevated copper and gold was encountered to the north and north-west corner of the soil grid, coinciding with known magnetic high anomaly.  Several mineralised diorite and monzodiorite units were mapped.

Geochemical sampling results displaying coincident copper and gold anomalies

Programs of creek traversing, outcrop geological mapping, trenching and sampling were carried out over a 5 km² area, returning encouraging copper results including:

Ø  2.84% Cu and 0.29g/t Au in outcrop grab sample 86326

Ø  2.60% Cu and 0.20g/t Au in outcrop grab sample 85718