Sheffield Resources : Farms in to Jamieson Gold Exploration Project

SHEFFIELD FARMS IN TO HIGH GRADE

JAMIESON GOLD EXPLORATION PROJECT

HIGHLIGHTS

• Agreement to earn 100% of the Jamieson Gold Project, located in the central Victorian Goldfields

• Hill 800 advanced gold prospect has multiple high-grade gold drill intersections from surface

• Drilling at Rhyolite Creek Zn (Au-Ag) prospect has intersected 1 .4m of massive sulphide

• Sheffield will consider options to unlock the value for shareholders from its portfolio of gold- copper assets as it focusses on development of the Thunderbird Mineral Sands Project

  Sheffield Resources Limited ("Sheffield", the "Company") (ASX:SFX) is pleased to announce the signing of an agreement, through its wholly-owned subsidiary Carawine Resources Pty Ltd ("Carawine"), to earn 100% interest in the Jamieson Project (the "Project") from Jamieson Minerals Pty Ltd ("Jamieson").

  The Earn-In Agreement provides Carawine the right to earn 100% of the Project by incurring $190,000 of exploration expenditure within the next 2 years, followed by a further $200,000 as a cash payment or issue of shares.

  The Project is located near the township of Jamieson in the central Victorian Goldfields and comprises Exploration Licence 5523, containing the Hill 800 gold and Rhyolite Creek zinc-gold-silver prospects.

  Sheffield's Managing Director Bruce McFadzean said "this low cost farm-in represents an exciting opportunity to add value through exploration by targeting high-grade gold mineralisation.

  "The Jamieson Project adds an advanced gold exploration project to Sheffield's portfolio of gold-copper and nickel-copper exploration assets, and is consistent with our strategy of responsibly and sustainably maximising value to our shareholders.

  "While Sheffield continues to focus on developing the world-class Thunderbird Mineral Sands Project, we are considering several options to best unlock value for our shareholders from these exciting new projects."

  Hill 800 was discovered by New Holland Mining NL ("New Holland") in 1994 following sampling of outcropping gold-rich gossans. The prospect is a volcanic-hosted massive sulphide (VHMS) gold-copper (Au-Cu) system with similarities of host rock, age and mineralisation styles to those of the Henty gold and Hellyer lead-zinc-silver-gold deposits in western Tasmania.

  New Holland drilled 51 RC and 6 Diamond holes at Hill 800 (6,309m total) between 1996 and 1999, returning high-grade gold results, including:

  • 33m @ 4.31g/t Au, from surface (HEC1)

  • 13m @ 10.9g/t Au, from surface (HEC13), including 3m @ 38.8g/t Au from surface

     23.4m @ 4.56g/t Au, from 0.5m (HED1)

  • 25m @ 4.72g/t Au, from 3m (HEC45), including 1m @ 24.0g/t Au from 16m

  • 21m @ 4.04g/t Au, from 76m (HEC49), including 1m @ 20.9g/t Au from 80m

     23m @ 4.13g/t Au, from 86m (HEC48)

  • 4m @ 7.03g/t Au, from 91m (HEC12), including 1m @ 23.2g/t Au from 92m

  • 7m @ 22.1g/t Au, from 184m (HED1), including 1m @ 28.9g/t Au from 184m and 1m @ 122g/t Au from 188m

    (Down hole widths, may not represent true thickness. See Table 1 and Appendix 1 for further details)

    Figure 1: Hill 800 Long section with drill hole intersections projected onto a plane oriented 030 degrees with respect to True North (see Figure 4). Note three sub-parallel trends are depicted: Main, Upper Footwall and Lower Footwall, and an interpreted overall trend to the mineralised envelope. In most cases the holes have been drilled oblique to mineralisation, therefore the downhole widths stated may not represent true widths.

    The Rhyolite Creek prospect, a Zn-Au-Ag rich VHMS system located about 5km south of Hill 800 was discovered by Goldsearch Ltd ("Goldsearch") in 2008. The discovery diamond core hole RCD001 intersected a zone of strong alteration and sulphide mineralisation, returning an interval of:

  • 8m @ 3.7% Zn, 0.3% Pb, 0.1% Cu, 1.6g/t Au and 29g/t Ag from 220m including 1.4m @ 15.6% Zn, 1.5% Pb, 0.5% Cu, 7.4g/t Au and 113g/t Ag from 223m

    Re-sampling of core within this interval, from 223.5 to 224.5m by Jamieson returned assay values of 20.3% Zn, 1.5% Pb, 0.7% Cu, 178g/t Ag and 10.3g/t Au (see Table 2 and Appendix 1 for further details).

    About the Jamieson Project

    EL5523 is located on unrestricted crown land within a geological province known as the Mt Useful Slate Belt (Figure 2). The region was founded on gold mining in the 1850's and a number of gold mines have operated in the region, including the A1 Mine near Gaffney's Creek south of Kevington, currently operated by Centennial Mining Ltd.

    The tenement covers a "window" of Cambrian-aged volcanic rocks of similar age to the Mt Read Volcanics in western Tasmania, a world-class VHMS district. The discovery to date of two VHMS-style systems on the tenement confirms the outstanding potential of the project. Typically, deposits of this style occur in clusters often defining significant mining camps. Gold-rich VHMS deposits are particularly attractive given their high-grade and polymetallic nature.

    Figure 2: Jamieson Project regional geology (after Geol. Survey Victoria) showing windows of Cambrian Volcanics, EL5523 and prospects discussed in this announcement.

    The Project area is considered to be under-explored, with limited systematic exploration for VHMS deposits completed to date. The potential of the region was recognised by Jamieson after compilation of data from open-file technical reports submitted by previous explorers to the Victorian Government Earth Resources division.

    Hill 800

    New Holland discovered the prominent outcropping gold-rich gossans at Hill 800 in 1994 after following up magnetic and radiometric anomalies in data acquired and released by the Victorian Government (Figure 3). Mapping and surface geochemical surveys followed, identifying a 1km-long NE-trending zone of alteration and gold anomalism along the northern edge of a ridge- line.

    A subsequent induced-polarisation (IP) survey over the ridge defined a large, strong chargeability anomaly plunging steeply north, which was targeted by several phases of reverse circulation (RC) and diamond drilling, with numerous significant gold intervals reported (Figures 1 & 4; Table 1 & Appendix 1).

    Figure 3: Gossan outcrop at Hill 800 (Photo: Sheffield)

    Gold mineralisation identfiied from this drilling is associated with silica-sericite-pyrite alteration in intermediate volcanic rocks at the core of a well-defined alteration zonation plunging approximately 70 degrees to the north. Within this alteration zone higher gold grades occur in a main, sub-vertical lode, and two parallel mineralised trends in the footwall to the main lode (Figure 1).

    The effectiveness of prior drilling was restricted by limited site preparation and the use of large truck- mounted drill rigs resulting in poorly located and oriented drill holes (Figure 4). This has lead to a number of oblique intersections and holes missing mineralsation. The use of small diamond drill rigs and better drill site preparation presents an opportunity for Carawine to more effectively test the interpreted lode geometry and target down-plunge extensions and potential parallel lodes.

    Copper mineralisation in the form of chalcopyrite was also intersected from historic drilling, often coincident with, and at times separate to gold mineralisation; for example:

     1m @ 2.1% Cu, 122g/t Au from 188m (HED1), and;

  • 7m @ 0.9% Cu, 0.69g/t Au from 254m, including 2m @ 2.0% Cu, 0.65g/t Au from 255m (HED1).

(Down hole widths, may not represent true thickness. See Table 1 and Appendix 1 for further details)

The presence of copper is consistent with gold-rich VHMS mineralised systems and further work is required to properly understand its distribution at Hill 800.

Figure 4: Plan view of historic drilling at Hill 800, with drill traces projected to surface (10m contours).