Exploration at the Sams Creek Project, Northwest Nelson, New Zealand

The Sams Creek gold deposit near Takaka in northwest Nelson was discovered in 1974 by CRA Exploration (CRAE) geologists. CRAE recognised the potential of the area and subsequently undertook a comprehensive exploration programme of geological mapping, soil and rock-chip sampling, geophysical surveys and diamond drilling. Exploration defined sporadic gold mineralisation contained entirely within a deformed and hydrothermally altered, peralkaline granite porphyry dyke with a seven kilometre strike length, and up to 60 m thickness. Rock chip samples indicated extensive and economically significant gold grades over approximately one kilometre strike of the dyke at Main Zone prospect. CRAE completed 30 diamond drill holes at this prospect and defined a limited resource. Oceana Gold Limited recommenced active exploration at the Sams Creek Project in late 2002, focusing on improving the geological understanding and known resource at Main Zone. Completion of 1041 m diamond drilling successfully increased the estimated resource to 10.7 Mt @ 2.12 g/t Au containing 729 000 oz at a 0.7 g/t cut off. A further campaign of 1560 m diamond drilling was undertaken in 2003 - 2004 to extend the resource and test the continuity of high grade mineralised zones. Deeper intersections of the porphyry dyke indicated geometrical complexity and grade variability similar to that observed at shallow levels. Recent research suggests that Sams Creek can be geologically classified as a variant of intrusion-related gold systems, and therefore comparable to some other, very large gold deposits. However, due to the rugged terrain and dyke geometry, surface drilling is reaching the limits of viability at Main Zone. If infill drilling continues to be successful then an underground decline may be developed to facilitate further exploration. Potential also exists along strike, where other significant gold anomalies are known but largely untested by drilling.