Nickel and Base Metals

Duketon Joint Venture
Orrbäcken Joint Venture
Mt Isdell
Birrindudu Tin/Gold Project

IGO has budgeted $3.3 million for regional nickel and base metal exploration in 2010/11. The pipeline of projects has grown significantly during the year due to a robust generative program and now comprises six nickel projects, one copper project and two tin projects. This budget does not include scoping study level activities or a potential resource drill-out at the Duketon JV Rosie and C2 prospects. It also excludes allowances for potential new project acquisition costs. A location map of all regional nickel and other base metal projects is provided in Figure 18.

Figure 18: Nickel and Base Metals Project Locations

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Duketon Joint Venture

The Duketon Nickel JV with South Boulder Mines Ltd covers ultramafic-rich stratigraphy prospective for massive and disseminated nickel sulphide mineralisation in the Duketon Greenstone Belt, approximately 80km north of the Windarra nickel deposit (Figure 19).

Figure 19: Duketon JV – Project Location in Relation to Selected Nickel Mines and Prospects Over Aeromagnetic Image

IGO is focusing on the Bulge magnetic anomaly, a prominent thickened portion of ultramafic with a strike length of 8km situated along a more extensive ultramafic package located on the western flank of the project tenure.

Two prospects have been defined to date:

• the high-grade Rosie Prospect which has returned intercepts up to 3.3m (true width) @ 9.1% Ni, 1.1% Cu, 0.2% Co and 7.1 g/t PGEs (2.2 g/t Pt, 1.7 g/t Pd, 0.8 g/t Rh, 1.8 g/t Ru), and;
• the C2 Prospect which is dominated by disseminated mineralisation and includes intercepts up to 52m @ 0.9% Ni including 37m @ 1.05% Ni.

Both of these prospects remain open along strike and down dip.

The potential for further mineralisation at Rosie is supported by DHTEM survey results from the deepest holes TBDD093 and TBDD098 which indicate that the strongest mineralisation is situated between these holes and continues steeply down plunge to the north-west (Figures 20 and 21).

On the basis of these highly encouraging results the Joint Venture partners have applied for a Mining Lease (M38/1252) that covers the area from C2 through to Rosie plus sufficient surrounding area to cover potential infrastructure should an economic deposit be defined.

Figure 20: Duketon JV – Bulge Prospect – Aeromagnetic Image Showing Rosie and C2 Prospect Locations, Significant Intercepts and Drill-Hole Locations

Figure 21: Duketon JV – Rosie Prospect – Longitudinal Projection Showing Significant Drill-Hole Intercepts and Down-Hole TEM Locations

IGO is planning to commence a scoping study incorporating both C2 and Rosie. Activities completed and/or commenced include:

• Preparations for a drilling program designed to take Rosie and C2 to Inferred Resource status
• POW approvals for resource drilling program
• POW approval for exploration base camp
• Commencement of baseline environmental studies
• Engagement of Aboriginal heritage consultants
• Preliminary mineralogical studies to aid future metallurgical test work
• It is anticipated that drilling will commence when all necessary approvals have been received.

Other Prospects

The German Well prospect covers an ultramafic unit located on the eastern flank of the project area towards the northern end of E38/1825. Previous work by IGO has identified a TEM anomaly in close proximity to highly anomalous geochemistry in aircore drilling (max 0.43% Ni, 306ppm Cu, 55ppb Pt+Pd). It is planned to RC drill test the conductor in 2010/11.

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Orrbäcken Joint Venture

During the year IGO entered into a Joint Venture agreement with Mawson Resources Limited ("MAW") to earn up to a 73% interest in the Orrbäcken Ni-Cu-Co project, located 10km from the regional centre of Skellefteå in north eastern Sweden.

The Orrbäcken project comprises a nickel occurrence discovered by local prospectors who identified approximately 80 gabbroic boulders that form a 1.5km long glacial boulder train, 25 of which are mineralised and interpreted to be close to source. Four boulder samples from the Orrbäcken discovery were analysed by the Swedish Geological Survey. Nickel content ranged from 1.9% to 0.6% and averaged 1.0%, cobalt ranged from 0.21% to 0.05% and averaged 0.1% and copper ranged from 0.7% to 0.1% and averaged 0.3%. The boulder train is associated with a magnetic feature that is of a similar scale to other mafic intrusives that have eventually been found to host economic deposits.

Much of the area of interest is covered by varying thickness of glaciogene sediments and therefore direct mapping and sampling of basement is not possible. In July 2010 IGO flew a combined heliborne magnetics and TEM survey to delineate the extents of the interpreted intrusive host rock as well as locate conductors possibly representing massive or stringer nickel sulphide mineralisation.

The survey identified 13 conductors of interest including three ranked priority 1, six ranked priority 2 and four ranked priority 3 according to TEM response and spatial association with other features (Figure 22).

Figure 22: Orrbäcken JV – 1.5km Long Nickel Sulphide Glacial Boulder Trail, JV Boundary, Lakes and Prioritised TEM Anomalies Over Aeromagnetic Image

The most significant target is a TEM response proximal to both the mineralised boulders and a complex magnetic feature possibly representing a prospective mafic-ultramafic intrusive body. Ground truthing of the targets is planned and follow-up ground EM where warranted is scheduled. Depending upon access conditions, drill targets identified during the follow-up surveys are planned to be tested.

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Mt Isdell

The Mt Isdell Project is located 35km south of the 26 million ounce Telfer gold resource and 80km south-east of the Nifty copper operation (148M t @ 1.3% Cu) (Figure 23).

Figure 23: Mt Isdell – (a) Project Location Over Gravity Image Showing Major Faults and Mines Proximal to the Project Area (b) Project Boundary, TEM Conductors and Geochemical Anomalies Over Regional Geology

The project covers Proterozoic Yeneena Group meta-sediments concealed by extensive aeolian sand dune cover and was targeted on anomalous WMC Diamond Division samples up to 12ppb gold, 598ppm copper, 1031ppm cerium, with anomalous arsenic and lead.

Reconnaissance and infill lag sampling by IGO has delineated a 5km x 3km multi-element (zinc, lead, and copper with elevated cerium, cobalt, arsenic, bismuth and gold) anomaly. Geophysical surveys have highlighted a major north-west trending gravity gradient structure which coincides with the high order surface anomaly. Both the Nifty Copper and Maroochydore Copper/Cobalt deposits are proximal to this feature.

Preliminary shallow aircore drill testing confirmed geochemical anomalism, however a more robust test using heavier drilling equipment is required to fully test the targets at depth.

A review of TEMPEST airborne electromagnetic data flown by the Western Australian Geological Survey in 2009 has highlighted a number of interesting conductive responses within the project tenure. One response is associated with the fold closure of a south east plunging synform, similar in characteristics to Nifty. A second more discrete response is coincident with surface Cu lag geochemical anomalism. It is planned to test an area covering both targets for Nifty-style copper mineralisation via a detailed Heliborne EM survey.

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Birrindudu Tin/Gold Project

The Birrindudu project is located 290km southeast of Kununurra in the Tanami Region of the Northern Territory. The project was initially identified during a review of results from the WMC Diamond division database, being used for target generation by IGO under agreement with WMC, (now BHP Billiton) which highlighted an area of strongly anomalous tin. Reconnaissance sampling by IGO in 2008 confirmed the presence of tin, together with tungsten and tantalum. Based on this information a tenement application was made and EL26804 was granted in January 2009.

Work to date has included compilation of historical exploration data, re-analysis of 105 geochemical samples taken from the area by De Beers now residing in the De Beers geochemical database owned by IGO, and portable XRF analysis of 103 heavy mineral concentrate samples, also part of the De Beers database. These analyses further confirmed the presence of tin and tungsten associated with the Palaeoproterozoic Winnecke Granophyre over a distance of 50km. The strongest results are from samples in streams draining an area containing a large aeromagnetic feature possibly representing alteration associated with the roof zone of a shallowly buried granite (Figure 24).

Figure 24: Birrindudu – (a) Tin Rich Heavy Mineral Concentrate Locations Over Aerial Magnetic Image (b) Photograph of Cassiterite-Rich Heavy Mineral Concentrates

IGO is currently completing a comprehensive stream sediment and soil sampling program designed to define the source of tin anomalism. It is believed that the project has potential to host a substantial tin, tungsten and tantalum ore body.

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