Highlights For personal use only - ASX · 2011-07-25 · 22m @ 0.50g/t Au from 94m, Incl. 4m @ 1.3g/t Au o Also at MacGregors auger drilling has identified significant bottom of hole

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Clancy Exploration Limited 3 Corporation Place Orange NSW 2800 Australia

Phone: (02) 6361 1285 Fax: (02) 6361 1202 www.clancyexploration.com [email protected]

QUARTERLY ACTIVITIES REPORT For the period ending 30 June 2011

The Board of Clancy Exploration Limited is pleased to release its Quarterly Activities report for the period

ending 30 June 2011.

Highlights

Screen fire assay results at Condobolin uplift gold grades at the Phoenix prospect by over 30%. Significant screen fire assay results include:

o 9m @ 4.08g/t Au from 72m; incl 7m @ 5.18g/t Au from 73m 2m @ 14.18g/t Au from 76m

A follow-up RC hole at the MacGregors prospect at the Parkes JV has extended low-grade gold mineralisation 160m along strike to the south:

o Initial intercept: 21m @ 0.49g/t Au from 73m, Incl. 6m @ 1.0g/t Au from 81m o Follow-up intercepts 160m to the south:

20m @ 0.43g/t from 46m, Incl. 6m @ 0.94g/t Au 22m @ 0.50g/t Au from 94m, Incl. 4m @ 1.3g/t Au

o Also at MacGregors auger drilling has identified significant bottom of hole mineralisation: 7.5m @ 0.30g/t Au 1.5m @ 0.63g/t Au

Further RC drilling at the Boxdale prospect at the Moorefield JV has extended gold mineralisation 60m south:

o 15m @ 1.00 g/t Au; Incl. 6m @ 2.11g/t Au

Aeromagnetic and radiometric surveys completed at Condobolin, Roseholme, Currumburrama and Billabong Creek for a total of 7,097 line km.

At Trundle a preliminary investigation into the potential of the extensive magnetite skarn horizons at Trundle Park to host economically significant magnetite resources with copper and gold credits is underway

Regional aircore drilling at the Myall JV has identified features consistent with porphyry-style alteration / mineralisation at several localities, including one with a bottom of hole intercept of:

o 3m @ 0.17g/t Au

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Clancy Exploration Limited (ASX: CLY) Quarterly Activities Report for period ending 30 June 2011

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Clancy managed projects

Aeromagnetic and radiometric surveys were completed at Condobolin, Roseholme, Currumburrama and

Billabong Creek for a total of 7,097 line km. At Condobolin screen fire assay results were received for RC

drilling completed in the previous quarter and a substantial auger soil geochemical survey is underway.

Condobolin EL7748

(NSW, Clancy 100%)

Condobolin is located in the central west of NSW immediately north of the Condobolin township.

Condobolin has a substantial mining history, predominantly as a base metals field (lead, zinc and copper), as

well as gold. The mineralisation is hosted in epithermal-style quartz veins within the metasedimentary units

of the Ordovician Girilambone Group, associated with pyrite, sphalerite, galena, chalcopyrite, arsenopyrite

and free gold.

Following significant gold and base metal drill intercepts at the Phoenix, Mascotte, Bluebell and Potters

prospects reported in the March quarter, further samples were collected at 1m intervals from the lode zones

and submitted for screen fire assay. Screen fire assays offer a higher degree of confidence when coarse gold

is present in the mineral system. The screen fire assay results were released to the market on 24 May 2011

and indicate uplift factors of over 30% for gold intercepts within the lodes, particularly those with coarse

base metal-bearing sulphides (Table 1).

Table 1 – Comparison of 2m and 1m gold intercepts for Condobolin RC drilling

Prospect Hole 2m composites 1m re-splits Cutoff Au

(g/t)

Uplift

Interval (m)

Au (g/t)

From (m)

Interval (m)

Au (g/t)

From (m)

Phoenix CORC008 10 3.06 72 9 4.08 72 0.1 33.4%

8 3.74 72 7 5.18 73 0.5 38.7%

6 4.73 72 5 6.90 73 1.0 45.9%

2 10.35 76 2 14.18 76 5.0 37.0%

Mascotte CORC015 4 1.33 76 4 2.28 76 0.1 71.4%

Bluebell CORC012 4 0.29 98 4 0.39 98 0.1 34.5% Intercepts based on Au cutoff shown in the table. Bold text denotes 1m intercepts >1g/t Au. Au was analysed by ALS Orange by screen fire assay/ AAS

finish, and for the other elements in Table 1 by ALS Brisbane by four acid digest ICP AES/OES. Standards and duplicates are inserted into the sample

stream to monitor laboratory performance.

A 2,106 line km airborne magnetic and radiometric survey covering the Condobolin Mineral Field was

completed during the quarter. The magnetic image has highlighted a number of interesting features such as

conjugate fault arrays, several high frequency anomalies that may be linked to be high-level skarns and a

strong magnetic gradient in the south of the survey area (Figures 1 and 2). The radiometric survey has

identified km-scale potassium anomalies that may reflect large scale hydrothermal alteration. Together

these features suggest a substantial hydrothermal system, more than likely linked to a concealed intrusive

complex, is present within the Condobolin Mineral Field.

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Figure 1 – Condobolin EL7748 showing mineral occurrences (blue), prospects (labeled) and

the high-resolution aeromagnetic and radiometric survey boundary

Figure 2 – Condobolin high-resolution RTP magnetic image showing mineral occurrences

and prospects

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A soil geochemical survey is currently in progress covering prospective areas within the Condobolin Mineral

Field. A total of 868 soil samples have been collected to date. A 3D IP survey covering the Phoenix area is

also planned. Results from the geophysical and geochemical surveys will assist with definition of drill targets

and follow-up drilling is planned for the September quarter.

Trundle EL4512 and EL7187

(NSW, Clancy 100%)

Trundle consists of two exploration licences EL4512 and EL7187 and is located 25km west of the Northparkes

copper-gold mine (Rio Tinto) and has many similarities to Northparkes. Most of the project area is currently

under winter crops so drilling will not be possible until after crop harvest in the December quarter. Work in

the June quarter consisted of a preliminary investigation into the potential of the extensive magnetite skarn

horizons at Trundle Park to host economically significant magnetite resources with copper and gold credits.

Current mines that exploit this style of deposit include Ernest Henry in Queensland and Cairn Hill in South

Australia.

Figure 3 – Trundle Park ground magnetic image showing the extent of the magnetite skarn

horizons (green and yellow hatching) and the location of previous drill holes that

intersected significant widths of magnetite (labeled).

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Previous drill holes TD025, TD026, TPRC001 and TPRC005 intersected substantial widths of magnetite skarn

(up to 58m drilled width) in a NW-trending skarn horizon at least 2.8km long. However, the majority of the

historical drilling consists of very shallow (<10m), poorly logged RAB holes that were assayed for copper

and/or gold only, which is of little use in the assessment of the magnetite potential. Ground magnetic data

clearly shows the extent of the NW-trending skarn horizon and also defines a second NE-trending skarn

horizon extending through Dunns area (Figure 3). Both skarn horizons, due to the very shallow drilling,

remain effectively untested. Assessment of the magnetite potential will continue in the September quarter

with magnetite intervals from the Clancy holes drilled in the March quarter to be submitted for Davis Tube

magnetite assays. Follow-up drilling of the epithermal vein intercept reported in the March quarter at

Trundle Park (2m @ 20g/t Au, 6.97% Cu & 81g/t Ag from 64m) will be undertaken after crops are harvested

in the December quarter.

Billabong Creek EL6802, Roseholme EL6822 and Currumburrama EL6784

(NSW, Clancy 100%)

An aeromagnetic and radiometric survey was completed at Billabong Creek (1,778 line km) and the data

from this survey, along with surveys completed in the previous quarter at Roseholme (1,716 line km) and

Currumburrama (1,264 line km), have been processed. Roseholme is located at the northern end of the

Northparkes Igneous Complex 29km NNW of Rio Tinto's Northparkes copper-gold mine. Currumburrama is

located 40km east of West Wyalong, north of Goldminco's Silverstone and Imola porphyry prospects.

Billabong Creek is located 40km east of Wagga Wagga on the Gilmore Fault, a major regional NW-trending

composite structure that marks the southern boundary of the Macquarie Arc (Figure 4). Significant

anomalies have been defined at all three projects and assessment of the anomalies will continue in the

September quarter.

Gold Fields managed JV projects

Aircore drilling continued at the Myall JV but has now been suspended until crops are harvested in the

December quarter. RC drilling was undertaken at Parkes, Wellington North and Moorefield JV’s and one

diamond hole was extended at Wellington North. A total of 2,762m of drilling was completed on the Gold

Fields JV projects in June 2011 quarter.

Myall EL6913

(NSW, Gold Fields 51%, Clancy 49%, Gold Fields earning 80%)

Myall (EL6913) is located 25km southwest of Narromine at the northern end of the Junee-Narromine

Volcanic Belt of the Macquarie Arc. The regional aircore drilling program continued with another 8 holes

(996m) completed before the program was suspended for winter crop planting. The regional aircore

program will resume after harvest in the December quarter. A total of 111 holes (11,893m) have been

completed on a 500m x 500m regional grid with encouraging porphyry-style alteration / mineralisation

observed, as well as potential orogenic gold style mineralisation. The best result from drilling in the March

quarter was a bottom of hole intercept in hole MYAC298 of 3m @ 0.17g/t Au from 120m.

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Figure 4 – Map showing the Clancy projects in the Macquarie Arc of Lachlan Fold Belt. Inset

– the location within NSW.

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Wellington North EL6178, EL6328, EL6662, EL7200 and EL7440

(Gold Fields 82%, Clancy 18%)

The Wellington North project covers approximately 30km of strike length of the Molong Volcanic Belt

immediately north of Wellington. Diamond hole BGDRC001 (396m) that was drilled in the December 2010

quarter at the Boda prospect was re-entered to extend intersections including 7m @ 0.83g/t Au & 0.40% Cu;

8m @ 0.45g/t Au & 0.17% Cu and an open bottom of hole intercept of 85.1m @ 0.08% Cu, 39ppm Mo &

0.06g/t Au in potassic alteration. The hole was extended to 503.2m and the intercept was extended by

another 29m to 114m @ 0.08% Cu, 33ppm Mo & 0.05g/t Au. Follow-up work is planned.

Auger geochemistry testing large 3D IP anomalies has defined Cu and key pathfinder anomalism and

alteration in the Girraween and Mayhurst areas. One 300m deep RC hole was drilled into an IP anomaly at

Mayhurst Central and 3 RC holes (616m) were drilled at the Tomkins porphyry Cu-Au prospect. Assay results

for the RC holes are awaited.

Parkes EL7676 and EL7677


The Parkes project covers 474km2 of the highly prospective Northparkes Igneous Complex. Rio Tinto’s

Northparkes copper-gold mine is located approximately 15km to the north of the Parkes project. One RC

hole (MGD002, 186m) was completed at the MacGregors prospect, 160m along strike to the south from

previously reported diamond hole MGD001 which intersected:

21m @ 0.49g/t Au from 73m, Incl. 6m @ 1.0g/t Au from 81m

MGD002 hit a broad zone (110m) of quartz-pyrite-arsenopyrite veining in phyllic altered greenstone rocks.

Results include:

20m @ 0.43g/t Au & 0.29% As from 46m, Incl. 6m @ 0.94g/t Au & 0.70% As

22m @ 0.50g/t Au & 0.15% As from 94m, Incl. 4m @ 1.3g/t Au & 0.26% As and 4m @ 0.91g/t Au

& 0.34% As

Two RC holes were drilled at the Bogan Gate prospect and one RC hole was completed at each of the

Swansbra and E44 South prospects. No significant results were returned from the RC holes.

Auger drilling continued at the MacGregors prospect and identified shallow intervals of significant Au and As

bottom of hole mineralisation including:

7.5m @ 0.30g/t Au & 0.14% As from 0m, Incl. 1.5m @ 0.55g/t Au

1.5m @ 0.63g/t Au & 0.02% As from 4.5m

Moorefield EL7675


Moorefield covers 285km2 between Fifield and Condobolin in the central west of New South Wales. RC hole

BDRC001 drilled by Gold Fields in 2010 at Boxdale returned the following significant intercept:

19m @ 1.28g/t Au & 6796ppm As, incl. 4m @ 4.30g/t Au, 8.35g/t Ag and 2.22% As

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Four RC holes were completed at Boxdale in the June quarter, following up the BDRC001 results. Significant

results were returned from BDRC003 confirming that the mineralisation identified in BDRC001 extends for at

least 60m to the south along a NNW strike:

4m @ 0.70g/t Au, 7.6g/t Ag from 32m

11m @ 0.4 g/t Au, from 56m; Incl. 3m @ 1.06g/t Au and 5.08g/t Ag

15m @ 1.00 g/t Au, 0.79% As from 85m; Incl. 6m @ 2.11g/t Au and 9.57g/t Ag

6m @ 0.13g/t Au from 124m

An IP survey will be carried out in the September quarter to map out the sub-surface sulphide distribution

and further drilling is planned.

Corporate

Rights Issue

A fully underwritten non-renounceable rights issue that raised $4.38 million (before issue costs) was

completed during the quarter. The rights issue was offered on the basis of one new share and one free

attaching option for every two shares held, at an issue application price of 8 cents per share. The free

attaching options have an exercise price of 15 cents each and will expire on 31 July 2013 and are listed under

the existing ASX code of “CLYO”. The Board expresses its appreciation to the joint underwriters, Patersons

Securities Limited and Soaring Securities Pty Limited for the faith their support demonstrates in the

company, its management and its prospects.

Preferred Drilling Contractor

A binding Memorandum of Understanding was signed with Australian Mineral and Waterwell Drilling Pty Ltd

(AMWD) whereby AMWD will become CLY’s preferred drilling contractor for a $5 million drilling contract or

a three year period, whichever occurs first. Under the terms of the agreement, AMWD will invoice CLY

monthly for a cash amount equivalent to 75% of all agreed costs associated with drilling and CLY will issue

fully paid ordinary shares in CLY to AMWD for the balancing amount of 25%. Shares issued to AMWD will be

priced at 95% of the three day Volume Weighted Average Price at the date of invoice. CLY shares issued to

AMWD will be escrowed for 12 months. CLY will also make a one off issue of 2,000,000 listed options (CLYO)

to AMWD upon signing of a drilling earn-in agreement to be completed in the September quarter.

Please direct enquiries to:

Gordon Barnes Shane Murphy

Managing Director FD

Phone: +61 2 6361 1285 Phone: +61 8 9386 1233

Email: [email protected] Mobile: +61 (0)420 945 291

Web: www.clancyexploration.com

The information in this document that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information c ompiled by Mr

Gordon Barnes who is a Member of the Australian Institute of Geoscientists. Mr Barnes is a full -time employee of Clancy Exploration Limited and has

sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is

undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral

Resources and Ore Reserves”. Mr Gordon Barnes consents to the inclusion in the report of the matters based on his information in the form and

context in which it appears.

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About Clancy Exploration

Clancy Exploration (ASX: CLY) is an Australian-focused copper, gold, base metals and tin explorer. The

Company’s portfolio consists of copper-gold projects in the Lachlan Fold Belt of NSW, base metal and tin

projects in the Mount Read Volcanic Belt of Tasmania, Nadbuck near Broken Hill in NSW and Yalgoo,

adjacent to the Golden Grove mine in Western Australia.

In NSW, Clancy has 12 wholly owned and managed projects and 7 joint venture projects which are managed

by Gold Fields Australasia Pty Ltd. In Tasmania, Clancy has 2 base metal joint venture projects with Bass

Metals and 2 tin joint venture projects with TNT Mines Pty Ltd (a wholly owned subsidiary of Minemakers

Ltd). The Tasmanian projects are managed by Clancy’s joint venture partners. This mix of Clancy and joint

venture project funding allows a high level of exploration activity to be maintained, whilst prudently

managing Clancy’s financial resources. Details of Clancy’s projects can be found at the Company's website:

www.clancyexploration.com

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Documents

Highlights For personal use only - ASX · 2011-07-25 · 22m @ 0.50g/t Au from 94m, Incl. 4m @ 1.3g/t Au o Also at MacGregors auger drilling has identified significant bottom of hole