Maiden JORC Resource at Salinbas and Ardala, No...

10 April 2013
AIM: AAU

MAIDEN JORC RESOURCE AT SALINBAS & ARDALA, NORTH-EAST TURKEY

Ariana Resources plc ("Ariana" or "the Company"), the gold exploration and development company focused on Turkey, is pleased to announce the completion of an independent JORC compliant* mineral resource estimate for its Salinbas and Ardala properties ("Salinbas/Ardala" or "the Project"), which is contained within a Joint Venture with Eldorado Gold Corporation ("Eldorado") in Artvin Province of north-eastern Turkey.  The resource estimate stated in this announcement is reported gross with respect to the Joint Venture.  Ariana holds 49% of the Joint Venture, such that 49% of the resource is net attributable to Ariana.  

Highlights:

• 180,000 oz Au plus 820,000 oz Ag Indicated resources identified at Salinbas and 590,000 oz Au plus 3.3 Moz Ag Inferred resources. 

• Additional 323,000 ounces Inferred resource identified at Ardala, based on historic data, including additional Cu and Mo.   

• Potential in the Salinbas and Ardala area to define 1Moz gross (approx. 500,000oz net attributable to Ariana) of gold, though considerable additional drilling will be required to confirm this potential. 

• Following completion of this initial resource estimate, Ariana to transfer management control of the Joint Venture to Eldorado, enabling Ariana to concentrate its attention on bringing its Red Rabbit Gold project in western Turkey in to production, targeted for 2014.   

Dr. Kerim Sener, Managing Director, commented:

"This maiden resource is an important step forward in our understanding of the Salinbas-Ardala system.  Although we are still in the early stages and much exploration work remains to be done, we are now talking about the potential for the area to host a deposit that is in the one million ounce range and perhaps beyond.  It is apparent that the Salinbas gold-silver prospect is related to the Ardala copper-gold-molybdenum porphyry discovered previously, and represents part of a broader mineralised trend that runs NE-SW over several kilometres.  

"As a consequence of our recent exploration programme at Ardala and Salinbas and the positive outlook on the prospectivity of this region, Ariana has granted Eldorado the right to adopt management control of the Joint Venture (leaving all other JV terms unchanged), so that Eldorado may further enhance the pace of exploration on these prospects with the support of its own large and experienced Turkish exploration team.  

"We are delighted with the exploration progress we have made to date and believe Eldorado can maximise the potential of this exciting area while we concentrate on bringing our Red Rabbit Gold Project to production in 2014.  With this in mind, Ariana welcomes this endorsement of the project, looks forward to the results of future exploration and wishes the Eldorado exploration team much success."

* The mineral resource estimate is JORC 2012 compliant, following early adoption of the JORC 2012 standards by the Company.  However, the estimate is not compiled in accordance with the requirements of National Instrument 43-101 reporting.

The Salinbas/Ardala Project

The Salinbas/Ardala project comprises two prospects of differing although related geology, which sit within two separate but adjacent licences held by the Joint Venture subsidiary, Pontid Madencilik San. ve Tic. Ltd.  The mineralisation encountered at Salinbas appears to have developed as a consequence of the intrusion of the Ardala porphyry, though the precise relationship between the two systems is yet to be established in detail.  

The Ardala part of the project hosts a porphyry copper-gold-molybdenum mineralised system associated with a series of nested quartz-diorite intrusions of Eocene age within an Upper Cretaceous volcano-sedimentary sequence.  Exposed parts of the porphyry have dimensions of 600m by 700m and interpretation of ground magnetic data suggests further lateral continuity beneath limestone units, with proximal skarn mineralisation developed in places within its periphery.  

Thirteen drill holes were completed on part of the mineralised system in the early 1990s by Anglo American for which an outline resource of 20Mt at an average grade of 0.25% Cu, 0.45 g/t Au and 65 ppm Mo was established at the time.  This historic estimate was not based on three-dimensional modelling of the porphyry or on any formal resource estimation methodology but is broadly consistent with the resource estimate calculated below which did utilise a three-dimensional geological model.  The mineralised part of the porphyry corresponds to one major phase of the intrusive complex in which higher densities of stockwork veins are seen.  

A programme of drilling on extensions of this porphyry system to the south of Ardala was undertaken in 2009 by the Joint Venture.  The results of this drilling indicate continuity of porphyry mineralisation beneath limestone cover, though the grades and widths of mineralisation encountered to the south are generally lower.  Elsewhere and further to the south, areas of exposed porphyry and related alteration are seen in gullies branching off from the main stream, which cuts through the Ardala porphyry.  These areas remain untested by drilling due to the nature of the topography and difficulty of access.  

Salinbas is a high-grade epithermal gold-silver prospect identified from outcrops located two kilometres from the Ardala porphyry.  In outcrop, mineralisation is associated with a zone of brecciation occurring, in places, along the contact between limestone and volcanic rocks, and positioned within an ENE-striking structural corridor, which has been shown in surface mapping to connect with the Ardala porphyry (Figure 1).  Aspects of the mineralisation are akin to some epithermal sediment-hosted replacement styles of mineralisation encountered in the vicinity of well-mineralised Indonesian porphyries, which show structural and/or lithological controls and are frequently hosted by limestone.  

Drilling programmes on Salinbas were completed in 2010, 2011 and 2012 by the Joint Venture.  This drilling identified the Salinbas mineralisation to occupy one dominant structural-lithological plane, which dips gently to the southeast away from the outcropping breccia zone.  Several subsidiary mineralised zones occupy the footwall of the dominant fault plane and have been penetrated by some drill-holes.  Exploration drilling was also undertaken between Salinbas and the Ardala porphyry in 2012 based on a target derived from a preliminary three-dimensional geological model that broadly linked the two sites.  

The model comprised a gently dipping sheet-like slab that continues the trend of mineralisation already established by the drilling at Salinbas.  Highly encouraging results from two initial holes in this area confirmed the preliminary geological model as an accurate predictor of mineralisation and have highlighted the need for further exploration in this zone.  The results of these two holes strongly support the continuity of mineralisation from the Ardala porphyry in the valley floor to the Salinbas system on the ridge - representing a vertical distance of 675m and a horizontal distance of close to 2km.  Fully establishing the link between these two areas will be an important objective for future drilling programmes.  

Mineral Resource Estimate

The resource estimate has been generated by Mr. Alfred Gillman of Odessa Resources Pty. Ltd. in compliance with the guidelines of the Australiasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012).  The resource estimate has been prepared using historic diamond drilling data in addition to the recent drilling data produced from the Joint Venture exploration programme during 2012 (detailed in JORC Table 1 as an addendum to this release).  

The resource estimate is based on the results of 65 diamond drill holes, totalling 7,650 metres.  The resource has been classified as either an Indicated or Inferred resource on the basis of drilling density and spacing over various parts of the mineralised system and on the basis of confidence in the geological model established for Salinbas in particular (Figure 1).  

A total of 5,451 gold/silver assays and 740 copper/molybdenum results were used in the grade estimation.  It is important to note that complete assay information for all four elements is not consistently available for all holes and that a full record of the historic sampling and assaying methodologies was not available, particularly for the drilling completed in the 1990s.  Assay methodology for the drilling completed by the Joint Venture involved fire assay for gold and ICP-MS methods for gold and other elements respectively.  The majority of data has been acquired since 2005 and obtained from ISO accredited labs.  The QA/QC methodology since 2005 is variable though considered adequate for the purposes of reporting a predominantly Inferred resource.  

The Salinbas grade estimation was carried out within modelled wireframes defined by a lower cut-off of 0.5 g/t Au (Figure 2).  The Ardala grade estimation was carried out within grade shells, created using Leapfrog software, and used as the controlling constraints in the grade estimation and block model reporting.  Individual grade domains were derived for copper and molybdenum as defined by nominal lower cut offs of 2,000ppm and 100ppm respectively.  Although the gold, copper and molybdenum domains are largely coincidental, tonnages/grade for each mineral domain are reported separately.

Within the constraining domains the grades were interpolated using the Inverse Distance Squared method using assay data composited to 1m.  Following univariate statistical analysis of the composited assay data, top cuts of 20 g/t Au (for zones 100 and 200), 5 g/t Au (for zones 300 and 400), 3 g/t Au (for zone 500), 2 g/t Au (for zone 600), 50 g/t Ag and 3,500ppm Cu and 400ppm Mo were applied prior to grade interpolation.  Total grades and tonnages of all elements are reported within the wireframes.  The implication of this is that low grade material below the modelling cut-off of 0.5 g/t Au may be included, thus diluting the average grade.  

An assumed bulk density of 2.6g/cm³ was used for the tonnage calculation.  No mining, metallurgical, marketing, economic or environmental studies have been considered to determine the economic viability of the project, particularly the relevant economic factors concerning mining along the estimated strike and depth of the resource.  However, the majority of the mineralisation encountered is located from surface to approximately 150m depth (Figure 3), providing reasonable expectation that the resource could support extraction by open-pit methods, though no conceptual pits have been defined due to the dominantly Inferred status of the resource; there is not yet sufficient confidence in the resource estimate to warrant the definition of the mining method and processing route at this stage.  

The resource estimate is split in to four commodities and is reported on an undiluted in-situ grade and tonnage basis (Tables 1 and 2).

Table 1: Classified Salinbas-Ardala resource estimate.  

Classification	Tonnage	Grade Au (g/t)	Ounces Au	Grade Ag (g/t)	Ounces Ag	Tonnage (Cu domain)	Grade Cu (ppm)	Tonnes Cu	Tonnage (Mo domain)	Grade Mo (ppm)	Tonnes Mo
Indicated	2,210,000	2.50	180,000	11.55	820,000	-	-	-	-	-	-
Inferred	24,650,000	1.15	910,000	4.17	3,310,000	4,660,000	2,200	10,000	18,000,000	136	2,400
Total	26,870,000	1.26	1,090,000	4.78	4,130,000	4,660,000	2,200	10,000	18,000,000	136	2,400

Table 2: Classified Salinbas-Ardala resource estimate by location.  Separate resource domains have been established for the Au, Cu and Mo components of the Ardala porphyry.  It is considered reasonable to estimate these domains in this manner because the resource is classified as Inferred in this location and mining parameters have not yet been established.  There is a 95% coincidence of the Au and Cu domains, and a 40-50% coincidence of the Au and Mo domains.

Location	Classification	Tonnage	Grade Au (g/t)	Ounces Au	Grade Ag (g/t)	Ounces Ag
Salinbas	Indicated	2,210,000	2.50	180,000	11.60	820,000
Salinbas	Inferred	8,390,000	2.20	590,000	12.30	3,310,000
Salinbas	Total	10,600,000	2.30	770,000	12.10	4,130,000
Ardala	Classification	Tonnage	Grade (ppm)	Tonnes Metal	Ounces Metal	Element
Ardala	Inferred	4,660,000	2,175	10,000		Cu
Ardala	Inferred	18,000,000	136	2,400		Mo
Ardala	Inferred	16,270,000	0.60		323,000	Au

Figure 1: Plan view of the Salinbas-Ardala resource areas by zone.  The zone numbering system is arbitrary and does not relate to absolute depths from surface, but is broadly indicative of relative depths with Zone 100 (Indicated resource) being the closest to surface and Zone 500 (Inferred resource) being the deepest from surface (see Figure 2 and 3) in the Salinbas area.  Zone 500 is shown in darker grey colour to differentate from Zone 400 which is also part of the Inferred resource.  The porphyry is marked as Zone 600, but in this case the mineralisation starts at surface and continues to significant depth (see Figure 2 and 3).  The section line shown in Figure 3 is identified in this plan as A-A'.

Figure 2: Three-dimensional geological model coloured according to gold mineralised zone at Salinbas and Ardala.  The topographic surface is shown in dark green.  The gold grade shell established for the Ardala porphyry is completely constrained by the modelled extents of the main mineralised porphyry phase (shown in pink).

Figure 3: Long-section through the Salinbas and Ardala system, showing the partially stacked nature of the various zones at Salinbas and the trend of the mineralisation towards the porphyry at Ardala.  This section suggests the potential for defining further sub-parallel zones of mineralisation in the hanging-wall and foot-wall of the 100 and 500 zone of the Salinbas prospect with additional, particularly deeper, drilling.  

Contacts:

Ariana Resources plc	Tel: [phone]
Michael Spriggs, Chairman
Kerim Sener, Managing Director
Beaumont Cornish Limited	Tel: [phone]
Roland Cornish / Felicity Geidt
Beaufort International Associates Limited	Tel: [phone]
Chris Rourke / Guy Wheatley
Loeb Aron & Company Ltd.	Tel: [phone]
John Beresford-Peirse / Dr. Frank Lucas
St Brides Media & Finance Ltd	Tel: [phone]
Susie Geliher / Lottie Brocklehurst

Editors' note:

The information in this report that relates to Mineral Resources is based on information compiled by Mr. Alfred Gillman of Odessa Resources Pty. Ltd., who is a fellow of the Australasian Institute of Mining and Metallurgy.  Mr. Gillman is a consultant to Ariana Resources plc and has sufficient experience relevant to the styles of mineralisation and type of deposit under consideration and to the subject matter of the report to qualify as Competent Person and defined in the 2012 edition of the Australasian Code for the Reporting of Exploration Results Mineral Resources and Ore Reserves (JORC Code).  Mr. Gillman consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

About Ariana Resources:

Ariana is an exploration and development company focused on epithermal gold-silver and porphyry copper-gold deposits in Turkey.  The Company is developing a portfolio of prospective licences selected on the basis of its in-house geological and remote-sensing database, on its own in western Turkey and in Joint Venture with Eldorado Gold Corporation in north-eastern Turkey.  Eldorado owns 51% of this joint venture and is fully funding all exploration work on the JV properties, while Ariana owns 49%.

The Company's flagship assets are its Kiziltepe and Tavsan gold projects which form the Red Rabbit Gold Project.  Both contain a series of prospects, within two prolific mineralised districts in the Western Anatolian Volcanic and Extensional (WAVE) Province in western Turkey.  This Province hosts the largest operating gold mines in Turkey and remains highly prospective for new porphyry and epithermal deposits.  These core projects, which are separated by a distance of 75km, are presently being assessed as to their economic merits and now form part of a Joint Venture with Proccea Construction Co.  The total resource inventory of the Company stands at 448,000 ounces of gold equivalent.  

Ariana also has a strategic investment in Tigris Resources Limited (www.tigrisresources.com), a private Jersey-based exploration company, which is focused on the exploration of copper and gold deposits in southeastern Turkey.  Ariana retains 11.5% of Tigris Resources Limited.  

Beaufort International Associates Limited and Loeb Aron & Company Ltd. are joint brokers to the Company and Beaumont Cornish Limited is the Company's Nominated Adviser.

For further information on Ariana you are invited to visit the Company's website at www.arianaresources.com.

Glossary of Technical Terms

"Ag" the chemical symbol for silver;

"Au" the chemical symbol for gold;

"Cu" the chemical symbol for copper;

"cut-off grade" The lowest grade, or quality, of mineralised material that qualifies as economically mineable and available in a given deposit. May be defined on the basis of economic evaluation, or on physical or chemical attributes that define an acceptable product specification;

"g/t" grammes per tonne;

"Indicated resource" a part of a mineral resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed;

"Inferred resource" a part of a mineral resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and has assumed, but not verified, geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that may be limited or of uncertain quality and reliability;

"Inverse Distance Squared" a conventional mathematical method used to calculate mineral resources.  Near sample points provide a greater weighting than samples further away for any given resource block;

"JORC" the Joint Ore Reserves Committee;

"JORC 2012" the JORC 2012 reporting code;

"m"   Metres;

"Mo" the chemical symbol for molybdenum;

"oz" Ounces;

"porphyry" an igneous rock with larger crystals contained within a matrix of much smaller crystals;

"stockwork" a mineral deposit in the form of a branching network of small irregular veins;

"top cut" the maximum gold content for samples used to calculate an average gold content for a resource;

JORC Table 1*
Ariana/Eldorado JV Salinbas-Ardala Project

The table below is a description of the assessment and reporting criteria used in the Salinbas-Ardala Project Mineral estimation that reflects those presented in Table 1 of The Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code, 2012)*.  The Mineral Resource statement was prepared for the Salinbas-Ardala Project.

Criteria	Explanation
Sampling techniques and Data
Sampling techniques	Full core was split using a rock saw and half-core samples were taken at typically 100cm intervals in mineralised zones and 200cm intervals in wall rock.  Core recovery was recorded into the database.
Drilling techniques	Diamond coring - PQ, HQ and NQ diameter.  Historic data (pre-2012) drilled with HQ and PQ casing where necessary.   Recent drilling (2012) drilled with NQ, HQ and PQ casing where necessary.    The table below provides a summary of the drilling completed on the Ardala and Salinbas prospects, arranged in chronological order.  Data reliability is dependent on whether the Company still retains access to the original core and based on how reliable the original data source is considered.  In the case of the Anglo American drilling data, this is supported well by a PhD study (Rockl, 1998) that was completed contemporaneously with the exploration programme.  As a major mining company is the source of the data, Ariana considers the data reliability to be reasonable, despite the lack of access to core and original QA/QC information.    Year Meters Drilled Prospect Core Availability Data Reliability* Company 1992 3,068.5 Ardala No Reasonable Anglo American 2005 726.7 Ardala Yes Reasonable YAMAS/Rio Tinto JV 2010 6,078.5 Sal nbas Yes Good Ariana/European Goldfields JV 2011 3,952.9 Salinbas Yes Good Ariana/European Goldfields JV 2012 538.7 Ardala Yes Good Ariana/Eldorado JV 1,349.9 Salinbas Yes Good Ariana/Eldorado JV  Total 15,715.2
Drill sample recovery	Core recoveries were monitored and recorded into the sampling database.  For the entire Project area, core recovery is >90% and for mineralised zones is typically >80%.   Core recovery is considered sufficient for the purposes of resource estimation.
Logging	All diamond core holes were logged lithologically using a coded logging system for rock type, grain size, colour, alteration and any other relevant observations, though logging methods vary across the different phases of exploration.    Mineralised zones were identified from observation of mineralogy, lithological characteristics and further assisted by portable XRF analysis.
Subsampling techniques and sample preparation	Samples from diamond drill core, at 100cm intervals, were collected from sawn halves of identified zones of interest.
Quality of assay data and laboratory tests	QC procedures for the Joint Venture programme included the insertion of certified reference standards, blank samples, duplicates and umpire laboratory check samples to monitor the accuracy and precision of laboratory data.  The protocol followed included the insertion of one standard, one blank and one duplicate; each batch corresponded to the drill hole sampled.  QC procedures for the 1992 and 2005 drilling programmes were not available.  The overall quality of QA/QC is considered adequate to ensure the validity of the data used for resource estimation purposes.
Verification of sampling and assaying	All samples were submitted to the internationally accredited laboratory of ALS Global in Turkey (ISO 9001:2000 accredited).
Location of data points	All collar positions were located initially by hand-held GPS and later surveyed by a professional surveyor using DGPS equipment.  Downhole deviation surveys were routinely carried out in all holes, using a digital electromagnetic deviation tool.
Data spacing and distribution	Due to the steep terrain, drill spacing is largely dependent on accessible sites.  At Salinbas drill-spacing varies from 10-50m on sections that are nominally spaced at 50-50m apart.  At Ardala drill fans are collared from a single drill site with no regular grid.
Orientation of data in relation to geological structure	Salinbas The dip of the mineralisation for most of the deposit is -23o towards an azimuth of 60 o.   Local grade continuity follows the dip of the mineralisation for the entire deposit.  Nearly all drilling is vertical thus intersecting the mineralisation obliquely.  No biases are expected from the drilling direction.  Ardala The dip of the mineralisation for the gold domain is sub-vertical with an apparent plunge of -60 o towards the northwest.  Drilling intersects local grade continuity at various angles without any apparent grade bias.
Sample security	The measures taken to ensure sample security for samples used for analysis and QAQC include the following:  Chain of Custody is demonstrated by both Company and ALS Global in the delivery and receipt of sample materials.  Upon receipt of samples, ALS Global delivers by email to the Company's designated Quality Control Manager, confirmation that each batch of samples has arrived, with its tamper-proof seal intact, at the allocated sample preparation facility.    Any damage to or loss of samples within each batch (e.g., total loss, spillage or obvious contamination), must also be reported to the Company in the form of a list of samples affected and detailing the nature of the problem(s).
Audits and reviews of sampling and assaying	Reviews on sampling and assaying results were conducted for all data internally.
Estimation and reporting of Salinbas-Ardala Mineral Resources
Database integrity	The Salinbas-Ardala resource data is stored in a MS Access database and is managed using MS Access and Excel software.    Data was logged onto field sheets, which were then entered into the data system directly by geologists working on the Project.   Data was validated on entry into the database, or on upload from the earlier MS Access databases, by a variety of means including the enforcement of coding standards.   Laboratory data has been received in digital format and uploaded directly to the database.  Original data sheets and files have been retained and are used to validate the contents of the database against the original logging.  Independent consultants Odessa Resources Pty. Ltd. performed a visual validation by reviewing drill-holes on section and by subjecting drill-hole data to data auditing processes in Gemcom mining software (e.g. checks for sample overlaps etc.).
Site visits	No site visit has been undertaken by the CP. However, the CP has been involved with the project in an advisory role with respect to geological modelling and drillhole planning for longer than 12 months.  Due to the early-stage nature of the project and the comprehensive database it was not considered necessary to undertake a site visit.  Ariana and Joint Venture staff have visited the site on numerous occasions in order to observe drilling, sampling and other operations in order to introduce appropriate logging, sampling and drilling protocols.
Geological interpretation	Salinbas: shallow-dipping sheet-like mineralised breccia surfaces sub-parallel to contact between footwall limestone and overlying volcanic rocks. Mineralisation modelled as semi-conformable stacked "lodes".  Ardala: steep-plunging mineralised domain contained within a porphyry body that was modelled on the basis of geological plans and sections as reported in a PhD study by Rockl (1998) which were based on the contemporaneous and original drilling undertaken by Anglo American in the early 1990s.  Gold, copper and molybdenum domains are modelled in Leapfrog software after applying search-bias as evident from porphyry orientation.  Interpretations of geological surfaces derived from 3D modelling of drill-hole lithological data.
Dimensions	Salinbas In plan orientation, the deposit is approximately 1,260 metres long and 150-340m metres wide.   One primary lode with minor footwall lodes in the west and minor hanging wall lode in the east.  Lodes vary from 2-10m in thickness with main lode averaging 5m thickness.    Mineralisation has vertical extents ranging between 1305 and 700 mRL.    Ardala In plan orientation, the deposit is approximately 445 metres long and 90 metres wide. Gold mineralisation is assumed to be evenly disseminated throughout the domain and related broadly to stockwork veins and potassic-phyllic alteration.  Mineralisation has vertical extents ranging between 615 and 150 mRL.
Estimation and modelling techniques	Drillhole sample data was constrained within:  Salinbas: manually constructed wireframes defined by nominal 0.5g/tAu cut off. Several <0.5g/tAu intervals were included to maintain geological continuity.  Ardala: three-dimensional Leapfrog Au, Cu and Mo wireframes clipped with manually interpreted porphyry model.  Sample data was composited to a 1 metre downhole length using a wireframe-intersection compositing method.  Residual samples (those composite intervals for which there was less than 50% of the composite length) were not considered biased and hence were included in the estimate.  An analysis of the grade distribution characteristics of the domain composites for each deposit was undertaken.  In each case one of the following was identified: noticeable high-grade inflection points on log-probability graphs and/or significant gaps on disintegration plots.  The following top cuts were used:  Zone Topcut (Au g/t) Topcut (Ag g/t) Topcut (Cu g/t) Topcut (Mo g/t) 100 (Salinbas) 20 50 - - 200 (Salinbas) 5 50 - - 300 (Salinbas) 5 50 - - 400 (Salinbas) 5 50 - - 500 (Salinbas) 20 50 - - 600 (Ardala) 2 - 3500 400 Search ellipses and ranges were defined as follows:  Zone Principal Azimuth Principal Dip Intermediate Azimuth Anisotropy X Anisotropy Y Anisotropy Z 100 270 25 0 120 90 20 200 270 25 0 150 75 12 300 270 25 0 100 80 20 400 270 25 0 100 80 20 500 270 25 0 200 180 30 600 350 45 -25 150 190 100 A block model was constructed using a 20mE by 20mN by 10mRL parent block size.  Estimation was carried out using Inverse Distance Squared (ID2) methodology at the parent block scale.  One estimation pass using all available composites was used for all domains.   A percentage model was used to report precisely the volume of material within each block.  Tonnage reports from the volumetrics reporting function was checked against the analytical volumes of the constraining wireframes.  The variance between the two methods was <1%.  This is considered to be an acceptable margin of error.
Moisture	Tonnes have been estimated on a dry basis.
Cut-off parameters	The Inferred and Indicated resources are tabled as an undiluted resource above a zero cut-off (i.e. equivalent to reporting all material within the resource wireframe) as reported from the ID2 block model.  The likely economics of this style of mineralisation will largely be determined by depth from surface, which in the case of the stated resources, varies from near-outcrop to an average depth of about 150m.  Thus various mining methods, including conventional open-cut and decline-underground, may be utilised on the applicable portions of the resource.  In these circumstances, different lower cut-off grades maybe applicable.  However, at this stage of the project a reporting cut-off of zero is considered applicable for planning purposes.  It is likely that in the conversion from resources to reserves, losses will arise from either lower local grades and/or minimum mining width criteria not being achieved.
Mining factors or assumptions	No mining factors (i.e. dilution, ore loss, recoverable resources at selective mining block size) have been applied.
Metallurgical factors or assumptions	No metallurgical assumptions have been built into the resources because there is no intent at this point in time to convert the Mineral Resource into a Mineral Reserve.
Environmental factors or assumptions	No environmental assumptions have been built into the resources because there is no intent at this point in time to convert the Mineral Resource into a Mineral Reserve.
Bulk density	Bulk density data was not available for the Salinbas-Ardala deposit.   An assumed bulk density of 2.6 g/cm3 has been applied.  This bulk density is considered reasonable as an average density of mineralised porphyry and the Ardala porphyry comprises the majority of the mineralised volume reported.  The mineralisation at Salinbas is hosted by limestone and in some cases volcanic breccia and so a bulk density range of 2.3-2.7g/cm3 could be considered, though without specific measurements the assumed bulk density of 2.6g/cm3 is also reasonable in this case.
Classification criteria		Mineral Resources have been classified on the basis of confidence in geological and grade continuity using the drilling density, geological model and modelled grade continuity.  Indicated Mineral Resources have been defined generally in areas of 50x50m drill spacing (Zone 100) with at least 10 holes defining the lode geometry.  For all other lodes Inferred Mineral Resources have been defined in areas of >50x50m metre drill spacing and where less than 10 holes define the lode geometry.  92% of the gold-silver resource (by tonnage) is classified as inferred  At Salinbas the inferred Zone 500 (29% by tonnage of the total Salinbas-Ardala resource) is based primarily on two holes that were drilled 400m from the denser grouping of holes that define the topographically higher parts of the resource.  The interpretation of Zone 500 is considered justified on the basis of the drilling results in the two holes that demonstrate: continuation of the projected host structure along strike from the western portion of the resource where it is well defined.  continuation of the limestone/volcanic contact along strike from the western portion of the resource where it is well defined.  continuation of the projected mineralisation along strike from the western portion of the resource where it is well defined.  Zone 500 requires significant additional drilling to confirm the presence of continuity of mineralisation in this area though there is currently sufficient geological confidence (as described above) to classify this zone as part of the Inferred resource as opposed to an Exploration Target.  The fact that the mineralisation encountered in the two holes drilled in to this area almost exactly matched the predicted location of mineralisation based on the pre-drilling geological model is confirmation of validity of the model.    Figure 4 At Ardala where 100% of this specific resource is classified as Inferred there are five drill-holes that define the resource geometry.  Given the disseminated character of this "porphyry-style" of mineralisation the use of Leapfrog iso-surfaces is considered to be an appropriate method of defining the grade boundaries for this level of classification.
Block Model verification	For each deposit, the ID2 model was validated against the input drill-hole composites for each domain by visual comparisons carried out against the composited drill-hole samples for each domain against the modelled block grade.
Audits or reviews	The estimated grades were validated against average Au and Ag grade statistics for each lode.
Discussion of relative accuracy/ confidence	Odessa Resources Pty. Ltd. place a relative accuracy of +/- 20% (and 90% confidence level) in the Mineral Resource estimate at the global level for the Indicated Resources based on the estimation technique and data quality and distribution.  Inferred Resources have a lower level of confidence outside of this range, based on data density, the historical nature of some drilling data, and uncertainties in the geological models established.

Ends

Figure 4
Figure 3
Figure 2
Figure 1

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