Morning Star Gold
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Review of Operations

Overview
  • Shaft refurbishment at the morning star mine continued to the no. 10 level
    (~306m below surface)
  • NNTT registers final ILUA covering all MCO tenements four new MINS granted (MIN5480, 5481, 5482 & 5489)
  • Two ELAS receive priority grant status (ELA 4320 & 5079). Purchase of MIN 5299
  • Purchase of four diamond drills
  • Commenced surface & u/g drill operations
  • Employment of 24 staff by MCO, many localled sourced
  • 67 diamond drill holes completed for ~6km drilled
  • Pilot mining program announced at morning star mine
  • Commencement of diamond drilling program at Waverly mine
  • Maiden JORC resource set to be released July 2008
  • MCO developed regional exploration plan – work plans being prepared for all MINS
  • Mines safety awareness day hosted at morning star mine
  • Substantial upskilling of MCO operatives on OH&S issues



DESCRIPTION OF ACTIVITIES

Underground Mine Development
The period saw the dewatering and reconstruction of the Morning Star main shaft progress 70 metres to reach 310m below surface (RL1440m) and the connection through to the historical 9 Level at the 279 m depth (RL 1447m).

Main shaft and mine access reconstruction work was halted following the construction of a sump beneath the 10 Level plat.  This will allow for planned drilling commencing from both the 9 and 10 Levels in upcoming quarters. Shaft crews have been cross-skilled and utilised to prepare drill cuddies and to up-skill as diamond drillers.

The period also saw the accessing of Levels 7, 8 and 9 and the recon and channel sampling of levels 5, 6, 7, 8, and 9 completed during the year. 

The refurbishment of 7 Sub-Level winze haulage way and ventilation circuit through from 7 Level to 9 Level was completed and the total refurbishment of 9 Level, including the installation of rail haulage tracks, was also completed during the period. 

The area between the 7 and 9 Levels (7 Sub-Level) was where mining ceased after the 1939 fires.  This area is now being made available for sampling.

Expansion of the ventilation has been continued into the newly opened areas with the shaft being used for primary ventilation and the open stopes being used for exhaust ventilation.  Ongoing atmospheric monitoring is maintained and all mine openings are ventilated and checked prior to entry. The mine is found to have satisfactory natural airflow whilst no large diesel equipment is in operation. Underground drills are run on compressed air from surface.
During the year a number of areas of exposed mineralised structure were prepared for bulk sampling to assist in metallurgical test work.  At present four bulk sampling programs have been completed.


The Morning Star mine proved historically rich in terms of ounces of gold per vertical metre, with significant existing vertical gap zones

Underground Exploration
The period saw the completion of the access development, surveying and sampling to the 5, 6, 7 and 8 Levels where several significant mineralised quartz structures have been exposed.

Access was gained into the high-grade zones of the Burns, Campbell’s and Whitelaw’s reefs.  Between 1934 & 1939 the production history of the Burns and Whitelaw’s was estimated to average over 40g/t (~66,000ozs gained).  Sampling of the exposed reefs has returned grades exceeding 300g/t Au and highlighted the presence of visible gold. This has heightened the potential of the historic stopes and partially developed areas.

During the year, diamond drilling was carried out from two drill cuddies on the 9 Level (North (K1) & South (K2)) and one on the 10 Level Plat (K3). 

In total 57 holes were drilled for a total of 4,864 metres in these areas.

Listed below is a summary of significant intersections

 0.50m @ 14.6g/t  from  77.30m (MS406)
 1.35m @ 6.93g/t  from  24.90m (MS417)
 0.11m @ 694g/t  from  82.50m (MS408)
 0.30m @ 11.2g/t  from  45.10m (MS420)
 0.10m @ 532g/t  from  84.10m (MS409)
 0.75m @ 7.19g/t  from  9.25m (MS423)
 0.38m @ 1,392g/t  from  52.97m (MS410)
 0.93m @ 26.7g/t  from  44.68m (MS424)
 0.27m @ 14.6g/t  from  72.38m (MS411)
 1.45m @ 9.36g/t  from  16.10m (MS431)
 0.50m @ 15.7g/t  from  47.05m (MS412)
 0.79m @ 7.59g/t  from
 49.86m (MS438)
 0.30m @ 9.14g/t  from  85.65m (MS415)
 1.05m @ 16.8g/t  from  49.70m (MS444)
 0.40m @ 90.1g/t  from  47.10m (MS416)
 0.35m @ 13.60g/t  from  50.40m (MS444)
 0.70m @ 95.9g/t  from  67.80m (MS416)



 

New Reef Discoveries from Gap Zone Drilling this year


Surface Exploration
Diamond drilling occurred at both Morning Star South (7 holes for 868 metres) and at the Waverly dyke (4 holes for 247 metres).

The drilling at Morning Star South was targeted to test the extension of the Whitelaw’s reef south of the Morning Star creek.  Results from the drilling were disappointing with only a number of small quartz reefs being encountered and only low grades returned.

The Waverly dyke was historically only mined to around the base of the weathered zone, approximately 50m below surface, according to historic records, which are under review
as we gain more information from current drilling.

The Waverly presents MCO with the outstanding opportunity to explore and develop a previously untapped, large auriferous dyke deposit in close proximity (~900m) to the existing operations at the Morning Star mine. The Waverly dyke structure has been identified to extend over a strike length exceeding 4kms on MCO tenements.

Although there is no formal production history recorded for the Waverly dyke, MCO has discovered via surveying and surface and near surface mapping, that it has been mined extensively to a depth of at least 30–50 metres over a strike length of more than 600 metres.  This equates to 18,000-30,000 cubic metres or between 45,000-75,000 tonnes of mined ore over a 600-metre strike length.

As the Waverly dyke has a much longer strike length and historical reference of grades exceeding 1oz/t, we have assumed a very conservative historical production aggregate of at least 50,000 ounces of gold. It is highly probably to be greater than this.

Also there are abundant abandoned mine workings along the line of outcropping dyke some with large mullock dumps right along the line of workings.

The initial stage of the Waverly drilling near the historic Hardy’s Shaft was targeted to test the shape, orientation and mineralisation of the dyke at near surface and at depth. The drilling intercepted underground workings at a depth of 80 metres indicating that the historic workings at Waverly are deeper than first thought. It’s important to stress that this is just one small part of the overall Waverly structure.

Results for the 4 Waverly holes (and the rest of the program still to be completed) will be available in the 1st quarter of the next financial year (3rd Quarter 2008). Much has been learned to date on the orientation of the dyke near surface.



 

 

 

 

 

 

 

 

 

 

 


  Waverly Dyke Drilling Program –
  Stage One in Progress

 

Trial Mining Study – Bulk Metallurgical Sampling
In early 2008, a program was designed and commenced to test Morning Star ore-grade material for two key indicators: ROM metallurgical recovery and grade factoring analysis. Morning Star took two representative mining bulk samples from within the Morning Star mine. The two bulk samples of ore came from separate levels of the mine (Levels 6 and 7), where the company may re-access old mining stopes and partially developed areas. The bulk samples were sent to Ammtec in WA (NATA certified testing facility), for a range of metallurgical tests.

MCO’s primary aims were to: A/ test head grades of expected economic production areas still existing in the mine, B/ test gold recovery rates and C/ get a preliminary indication of what plant & processes might be needed to establish any future mining operation at the Morning Star mine.

The test results were outstanding proving not only is there a likelihood that ROM grades in selected accessible zones could be strong (in this case above 30g/t), that the ore is free milling, with up to 93% being gravity recovered and >99% recovered within 4 hours of a standard CIL process. The tests were considered a resounding success and very useful to MCO’s future planning. Bulk sampling and metallurgical test work on several reefs was continuing at the end of the period.



The Poppet Head above the Morning Star mineshaft, which was constructed by MCO in the early 1990’s


A second independent metallurgical study was carried out by Gekko Systems (Victoria) to assist in the preliminary design of a gravity circuit plant. Two bulk samples representative of high-grade laminated quartz vein ore and stockwork/breccia vein ore were collected and processed to ascertain the type, size and nature of gold distribution, along with the identification of suitable methods for recovery and anticipated rates.

Two areas representing these different styles of mineralization were selected for test work at Gekko;
1.    A leading face on Burns Reef at the 6 Level (representing laminated quartz vein ore)
2.    Whitelaw’s Reef below the No. 7 Sublevel (representing stockwork/breccia vein ore).

These locations were selected because they were representative of intact future material to be mined. Further areas of lower grade material may be selected also to approximate grade dilution. Results of the Gekko test work were expected in the next period.

Owner – Operator Drilling Fleet
MCO decided that to achieve the desired scheduling of exploration drilling at a reasonable cost, it was necessary to invest in drilling equipment and training of its workforce (the lack of availability of drilling contractors had seen substantial rate increases and booking delays of up to 12-18months, which was deemed unacceptable for the program).

During the year MCO placed orders to purchase 3 diamond-drilling rigs – one skid-mounted surface rig, one electric-hydraulic underground rig, and one pneumatic underground
rig, with delivery of the surface rig and the pneumatic underground rig occurring during the year. Delivery of the second underground rig is due in the coming period.

Training of MCO staff in use of the two drill rigs is continuing as part of the surface and underground drilling programs at Morning Star. Morning Star Gold has emphasised its commitment to training local workers and cross training in a broad range of activities.

Preliminary Results – Resource Model
The geological depth/strike model proposed targets of greater than 4-5 Million ounces of gold.  To test this model, a decision was made to invest in underground drilling to target repetitions of ladder vein/stockwork systems between the 200 – 600m depth of the Morning Star mine (Upper Gap Zone).

From the historical mine levels between 210m and 300m, underground drilling platforms were being utilised to test the upper Gap Zone.  Each hole is designed to have multiple targets down to the 600m depth, including extensions of the strike of known lines of lode that were intensely mined in the near surface zones (above the 200m depth) and below the upper Gap Zone (500 – 700m depth). 

4 deep drill holes were completed in 2005, which showed a repetition and extension of known reef structures (and some new ones). There were more than 10 reefs identified with coarse visible gold.

All of these targets could validate the geological and mineralisation models and have the opportunity to significantly increase global resource potential of the project by increasing the size and frequency of the extension on both known and new host structures.



Resource Modelling Graphic – Morning Star mine

Regional Exploration Program
Regional exploration work for the year included:

  • Ground and GPS surveys carried out on all MIN’s.
  • Underground axis of Adits on all MINs where access available.
  • Prelim Geological observations and surface mapping
  • Archival data compilation
  • Data entry and preliminary construction of 3D geological models for all MIN’s
  • Commenced drilling on MIN 5481
  • Road maintenance on MIN’s 5010, 5013, 5233, 5234, 5240, 5241, 5299 5480, 5481, 5482 and 5489.
  • Commenced work plans submission with site meetings on MIN’s 5010, 5013, 5233, 5234, 5481, 5482 and 5489.
  • Developed rehabilitation plan for MIN5299.

A variety of historical gold mines, mineralisation styles and potential exploration targets were identified for priority exploration activities on Morning Star’s regional tenements. 
Inspection of three of these dykes, Little Comet, Comet and All Nations was carried out during the June quarter, while the Loch Fyne mine was commenced at the end of
the June quarter.  These areas represent historical production of approximately 400,000 ounces gold, mostly from shallow workings above the water table.

Planning is underway to select optimal surface exploration targets to plan for regional drilling in the near future. This will immediately follow completion of the current surface diamond-drilling programs at the Morning Star South dyke and the Waverly dyke.

3D modelling of the regional dykes and mine workings, in MCO’s tenement area, was commenced during the quarter and this work has identified a number of regional dyke and magnetic anomaly targets.  This has led to MCO deciding to expand its tenement holdings position and applying for additional tenements.



Regional Geological Planning at Morning Star mine


Grade Factoring Study Undertaken at Morning Star Mine
This progressing study has reviewed the largest reef deposits of the Morning Star mine, comparing 438 drillhole intersections through these reefs with 7,570 face samples collected from stope development headings. 

The results show consistent increases in gold grades, with increasing sample size and density, with stope production grades being consistently 250% to 650% higher than drillhole intersection assays. Grade factoring was even higher for pre-1940 production, which could reflect the small size of early diamond drill core – being 2cm core diameter and very high core loss.

This work has substantiated the use of diamond drilling as an integral tool for identifying vein orientation and key indicator minerals.  Diamond drilling also confirms that the veins are gold bearing, but should not be used for determining an absolute grade value. The impact of grade factoring based on this data review is that drilled resources with a drillhole intercept grade of between 1.8 and 7.2g/t have production potential grades of 16 to 33g/t gold.

The variation between stope face samples and mill records is that the average recovered grade is 32% higher than the stope sampled grade.  

A series of bulk sampling studies were carried out on the Morning Star Surface deposit between 1995 and 1997.  Grade factoring was observed, with the grade variation ranging from 1.9 to 4.1g/t between small grab samples versus the large bulk sample. This test work was done on the part of the Surface deposit which has been classified as a Measured Resource of 736,000t @ 2.0g/t Au.

Table Displays the Comparative Review of Drillhole Intercepts vs. Stope Face Sampling vs. Mill Recovered Grade




Regional MIN Summary (excl. MIN5009 Morning Star mine):

MIN 5010
This tenement covers the Comet and Little Comet mines. During the year the tenement activities including the surveying and mapping of surface dyke outcrops, the Woods Point Co. Adit, Comet Adit and Little Comet Adits (upper & lower). Works were also carried out on the road maintenance and planning for Work Plan submission for drilling. Also included was the commencement of archival data processing and the construction of a 3D-model on the host comet dyke.

MIN 5013
This tenement covers part of the Morning Star dyke and other mine workings. This tenement also covers access for the proposed decline on the Morning Star mine.  This tenement covers the entrance to the main access road to the Tingha mine workings and the Waverly dyke’s southern extension. Work was carried out on road maintenance, clean up of stockpile material, bushfire management and maintenance, access to Tingha Mine main adit, mapping and surveying of road cuttings, surface mapping of Tingha and Waverly dyke outcrops.

MIN 5233
This tenement covers the road access into the Comet mine and covers the Comet dyke at depth. Road maintenance works were carried out.  A work plan was developed covering drill sites for deep comet drilling, in addition to site surveying and 3D modelling.

MIN 5234
This tenement covers part of the Waverly and Tingha dykes and other mine workings.
This tenement also covers the main road access for Tingha and Waverly dykes south of the Morning Star spur track. The MIN also covers proposed decline interconnection between the Waverly mine and the Morning Star mine.  Work was carried out on road maintenance, clean up of stockpile material, bushfire management and maintenance, access to Tingha Mine main adit, mapping and surveying of road cutting exposures of both dykes, and surface mapping of Tingha and Waverly dyke outcrops.  Part of the Waverly drilling water supply pipeline is on this tenement.

MIN 5240
This tenement hosts the Morning Star mine deeps (MS dyke at depth) and northern and southern strike extensions. This tenement is the site for the Morning Star decline portal.  This tenement hosts the main water supply pipeline from the Morning Star and a storage tank and pump station for the Waverly drilling program. This tenement hosts various other dyke deposits including the area between the Morning Star and the Comet dykes. Substantial road maintenance works, water pipeline works, and a 92m geotechnical diamond drill hole (for planning of the decline portal) was drilled on this tenement. Preparations of a work plan for the decline portal works has commenced.

MIN 5241
This tenement hosts the All Nations and Loch Fyne Groups of Mines.  Significant surveying and mapping has been undertaken of both the surface and the underground workings (various adits) of both mines, and road works maintenance. Extensive archival work has been carried out and development of 3D-models of both mines has commenced. A work plan including site investigations and meetings has taken place during the year to commence a drilling program on the All Nations mine.

MIN 5242
This tenement covers the Mountaineer and Garibaldi line of workings. Survey work has commenced to locate historical workings and commence preparation for geological mapping and 3D-modelling. Access to this tenement is restricted to ~5 months per annum due to its location in the Thomson Dam catchment.

MIN 5480
Granted in late 2007, this tenement covers the Shamrock dyke and various mine workings. Works have included road maintenance, surveying, geological mapping and commencement of 3D-modelling of the mine workings.

MIN 5481
This tenement was granted late in 2007 and covers the central portion of the Waverly dyke.  Extensive surveying and mapping has been carried out on both surface outcropping and on all accessible underground workings.  Road maintenance and drill site earthworks have been carried out, and by the close of the annual period four diamond drill holes had been completed for approx 210m of surface drilling.  Drilling has continued after the end of the period with 6 holes completed and visible gold intersected in hole WV05.

MIN 5482
This tenement was granted late in 2007 and covers the southern portion of the Waverly mine.  This tenement also covers the Tingha western workings including the Main Tingha Adit portal. Extensive surveying and mapping has been carried out on both surface outcropping and on all accessible underground workings.  Road maintenance on the Tingha track from MIN5234 to the Tingha adit portal was also completed.

MIN 5489
This tenement was only recently granted. It covers the south central portion of the Waverly mine, including also the northern line of the Tingha workings. In the brief period of holding the tenement, a series of traverses have been walked across the tenement to provide preliminary surveying and mapping detail on both surface outcropping.  Site meetings were carried out with the DSE after the end of the annual period to develop a work plan for expansion of the Waverly drilling from MIN 5481 onto MIN 5489.

ELA 4320 & ELA 5079
These tenements have been waiting on approval to proceed subject to registration of a Native Title agreement.  In the last week of the annual period, the company was advised that registration of the ILUA had been successfully completed and that the Exploration Licences could now proceed to grant. These tenements surround the companies various MINs in the Woods Point and Gaffney’s Creek areas.


 

 


Site Works
The challenges and repercussions of the December 2006 bushfires resulted in the loss of two months productivity and the requirement for MCO to upgrade the backup power supply to a production level rather than a support level.

The Company is developing a bushfire management plan to allow for the development of a safer perimeter zone to the minesite and western side of the Township of Woods Point.  This will be submitted as an amendment to an overall project Work Plan (Global Work Plan) that is being developed in the near future.

Other work included:

  • Completion of the backup power supply and installation of an electrically powered compressor system.
  • Expansion of the workshop and storage facilities. 
  • Construction of a formal lay down yard, new drill core storage and sampling areas was completed.

Personnel
During the period, works included both shaft/winze operations and site infrastructure team, and surveying & sampling teams.  Total personnel and contractors on site totalled up to 24 persons during the period. The old mine is springing back to life. The MCO Apprenticeship Program was expanded to include training local drilling staff and a database entry assistant.

New Tenement Applications
During the year MIN’s 5480, 5481, 5482, 5489 were granted.

Surveying of roads and old mine workings was carried out on all of the new tenements for the purpose of developing work plans for 2007-08.

  • ELA’s 4320 and 5079 were granted priority upon registration of the ILUA.
  • Late in the annual period, applications for new exploration and mining tenements were being prepared for submission over areas being released out of the moratorium program run by the Department of Primary Industries, Victoria.
  • These new applications will allow for the amalgamation and consolidation of existing Woods Point projects and an extension of the existing program into new areas immediately north and west of the Company’s existing tenements.

Indigenous Agreements all ratified by the NNTT
During the second quarter of 2008, the National Native Title Tribunal (NNTT), under the jurisdiction of the Federal Court of Australia, notified Morning Star Gold NL of final registration of the last of two Indigenous Land Use Agreements (ILUAs) covering MCO’s entire 220km2 tenements.


These ILUAs give Morning Star and the relevant Indigenous peoples (Taungurong and Gunai Kurnai peoples), agreements in perpetuity regarding mineral rights covering all of the areas of Morning Star’s tenements in Eastern Victoria.