Abbots project

Silver Swan’s Abbotts project is located northwest of Meekatharra in Western Australia, within 50 kilometres of the Meekatharra gold mining district, which includes Doray Minerals’ recent Andy Well gold discovery.

Andy Well hosts a resource of 831,000 tonnes at 12.7 grams per tonne gold for 331,000 ounces of gold.

Importantly, the Andy Well host structure is interpreted to cut the unexplored southern part of the Abbotts tenement package.

Abbotts comprises five tenements covering 265 square kilometres. An additional five mining lease applications are in place, for a potential further 27 square kilometres.




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Silver Swan Group’s Quinns VMS project in the Yilgarn region continues to unveil its potential as a major VMS deposit. Recent highly promising assays and the fact that the project is surrounded by numerous VMS discoveries bode well for continued success at Quinns.

Silver Swan is currently in an interesting position as it continues gold exploration at the Stakewell gold project and the hunt for volcanogenic massive sulphide deposits at the Quinns VMS project, both south of Meekatharra in Western Australia.

Encouraging oxide gold mineralisation was intersected during the September quarter at the Stakewell project.

Silver Swan has drilled 11 reverse circulation holes for a total of 878 metres to follow up on high-grade gold intersections at the historic Kohinoor open-pit and underground gold mine.

Meanwhile, Quinns is located 55 kilometres south of Meekatharra covering a tenement area of 45 square kilometres, where Silver Swan discovered the Austin volcanogenic massive sulphide deposit in the Quinns project area and subsequently defined a Resource of 1.48 million tonnes at 1.02% copper, 10.39% zinc, 0.24 grams per tonne (g/t) silver and 3.31g/t gold.

There is a very large 25 kilometres of strike with potential for VMS mineralisation at two stratigraphic levels.

In the December quarter, Silver Swan will revisit the Austin deposit to determine the potential for stacked sulphide lenses to the east and west of the current massive sulphide mineralisation and potential for enlargement of the orebody in terms of both width and depth.

Replete with $5 million in cash from a recent capital raising, Silver Swan will drill three new targets for testing at the project, along with a focus on extensions to existing gold lodes.

Recent high grade gold intercepts from drilling by Silver Swan at Stakewell appear to have been completely overlooked by the market including:

- 8 metres at 5.7 grams per tonne (g/t) gold, including 5 metres at 8.6g/t gold from 22 metres;
- 7 metres at 5.8g/t gold, including 4 metres at 9.9g/t gold from 34 metres; and
- 10 metres at 3.2g/t gold, including 5 metres at 5.3g/t gold from 259 metres.

While high grade gold intersected by previous reverse circulation drilling included:

- 7 metres at 23.7 g/t gold from 86 metres;
- 7 metres at 10.3g/t gold from 30 metres; and
- 8.5 metres at 9.0 g/t gold from 207 metres.

Located on five granted mining leases, including the historic Kohinoor mine (over 66,000 ounces mined), Stakewell has a number of mines in the region including Mt Magnet, Cue, Big Bell, Yaloginda, and Gabinintha.

Of even more interest to Silver Swan, two under-utilised mills are nearby (Burnakura and Yaloginda) to Stakewell, that require oxide feed.

Drilling earlier in the year by the company targeted to confirm and expand upon high-grade gold intersections encountered in historic (1980-1990) reverse circulation drilling.

The drill holes tested parallel and potential un-mined gold-rich lodes adjacent to the Kohinoor pit, along with extensions of the lode beneath the open-pit and test areas in which underground mining activity was planned - with all of these aims achieved.

At the nearby Quinns VMS Project which covers 45 square kilometres, the rig will also prepare collars to 100 metres at the Flinders and Murchison Wonder VMS prospects, followed by diamond drilling to test EM and off-hole conductor targets.

Quinns hosts six identified VMS prospects, along with the known Austin deposit with a Resource of 1.48 million tonnes at 1.02% copper, 1.39% zinc, 0.24g/t silver, 3.31g/t gold - which importantly remains open at depth and along strike.

The SPP will be priced at $0.10, the same price as the placement, for a subscription of up to an additional $15,000 (or 150,000) new shares.

The potential funding injection will be allocated to diamond and reverse circulation drilling at the company's Quinns VMS and Stakewell Gold projects.

Quinns is strategically located in the Murchison region of Western Australia.

The nearby Stakewell has had some recent very encouraging intersections, including 7 metres at 23.7 grams per tonne (g/t) gold from 86 metres, 7 metres at 10.3g/t gold from 30 metres, and 8.5 metres at 9.0 g/t gold from 207 metres.

Silver Swan has already received commitments for A$5 million through the placement of 50 million shares at $0.10, with 39.5 million of the shares subject to shareholder approval.

The company may raise additional funds after launching a share purchase plan for an amount of up to $15,000 per shareholder - also priced at $0.10.

The capital injection will be used by Silver Swan for diamond and reverse circulation drilling at the company's Quinns VMS and Stakewell Gold projects which are strategically located in the Murchison Province of Western Australia.

Susan Vearncombe, managing director, said "The recent identification of very strong off-hole conductors at our Quinns VMS Project and high grade gold results at the Stakewell Project are exciting developments for Silver Swan.

"We are very keen to recommence drilling at both of these highly promising projects in the next few weeks."

The company has carried out substantial exploration this quarter and has developed well-conceived targets at Quinns for new VMS mineralisation and high-grade gold mineralisation at its Stakewell project, and is now prioritising further drilling at Flinders, Murchison Wonder and Stakewell.

Stakewell shows high grade potential

"Kohinoor hosts known high grade lode-style mineralisation. This program is testing for repetitions and extensions. These results warrant follow-up drilling starting late June, with first results from mid-July.

"We retain our Buy recommendation for exposure to this gold and base metal exploration play. SWN is suited to investors with an appropriate appetite for exploration risk in complex geological setttings."

The area is highly prospective for gold, with historical intersections from reverse circulation drilling including:

- 7.0 metres at 23.7 grams per tonne (g/t) from 86 metres;
- 7.0 metres at 10.3g/t from 30 metres; and
- 4.0 metres at 18.4g/t from 22 metres.

Exploration will be within the Stakewell project and include five diamond holes within 200 metres of the abandoned open pit, with four holes testing the un-mined lodes and a fifth hole testing depth extensions.

Historical production at Kohinoor between 1897 and 1911 was reported to be 21,000 tonnes at 15g/t gold.

A further 45,144 tonnes averaging 2.43g/t gold was mined from an open pit between 1985 and 1988.

Underground mining was carried out between 1993 and 1995 to a vertical depth of 150 metres, however production from this period was not reported.

The program will take up to four weeks to complete.

The survey will aim to identify the position, depth and orientation of conductive plates that have to potential for copper and zinc mineralisation.

After which diamond or reverse circulation drilling will follow-up exploration on defined target areas.

The geophysical surveys will cover around 50 line kilometres at Quinns and 6.5 line kilometres at Yagahong.

Quinns covers an 84 square kilometre area where historical mining has taken place, highlighting the potential of the project, with Yagahong almost double the size at 160 square kilometres.

Vearncombe purchased 50,232 shares at an average price of $0.205, for a total consideration of $10,336.

Vearncombe now holds 155,787 shares through a super fund, plus a portfolio of options.

These options include:

- 1,000,000 $0.20 unlisted incentive options, exercisable by 31 March 2013;
- 1,000,000 $0.30 unlisted incentive options, exercisable by 31 March 2013;
- 1,000,000 $0.50 unlisted incentive options, exercisable by 31 March 2013;
- 250,000 $0.60 options, exercisable by 15 December 2012;
- 250,000 $0.75 options, exercisable by 15 December 2012; and
- 500,000 $0.42 options, exercisable by 15 December 2013.

Silver Swan shares last traded at $0.185.

The anticipated results will add to the "spectacular" results from its recent diamond drilling programme at the Austin volcanogenic massive sulphide deposit in the Quinns project area of Meekatharra, Western Australia.

Two holes have been drilled into the upper 300m defining zones of high grade copper and zinc mineralisation and another five holes were drilled into deeper positions to test DHEM conductors and to test for down‐plunge extensions to the known mineralisation.

The two upper zone holes intersected 40m and 60m of semi‐massive to massive sulphides with visible zinc and copper mineralisation.

The five deeper holes hit sulphides variously over ~10m intervals, also with visible sphalerite and chalcopyrite. Results will be announced when a representative number of assays are received.

Detailed studies of the geology seen in the drillcore show that the host fold structure is non‐cylindrical and the folded sequence is overturned and is an important new development in the understanding of the system and the mineralisation controls.

It also assists in targeting more accurately the interpreted position of the deeper EM conductor along a similar trend that is currently being tested. These conductors are typically indicative of copper mineralisation in the form of chalcopyrite.

Two downhole EM conductors that model about 30‐100m away off the projected Austin fold plunge are part of the current drill programme and RC pre‐collars for diamond tails have commenced.

Whilst there is no necessary link between folding and high‐grade copper mineralisation, the highest grades to date are in the core of folds at Austin, presenting the company with an opportunity to identify noncylindrical folds near surface that may increase in magnitude at depth.

Current drilling is expected to last to the end of October and is aimed at these EM positions.

Drilling at Austin is targeted to test recently identified conductors for potential sulphide mineralisation; and to demonstrate potential for the sulphide mineralisation to continue at depth.

Silver is testing specific areas 300-600m down-trend of reported mineralisation. Holes have been designed to intersect geophysical conductors 1 and 2, to 190m below the current reported mineralisation, requiring drilling to around 600m vertical depth.

Controlled and directional drilling is significantly slower than conventional diamond drilling, with a 550m hole taking as much as 7 to 10 days to drill (15-20 shifts of 12 hours each shift).

The company said using navigational equipment to force a hole in a new direction, 10-25m of drilling can take three 12-hour shifts to complete.

Although time consuming, Silver said that this approach will usually be more cost-effective than drilling multiple deep holes from surface.

To speed up the drilling programme, Silver has sourced another rig for RC drilling to pre-collar several deep holes for diamond extensions, with the rig expected to arrive next week.

Results for this current program are anticipated towards late October.

Silver Swan has completed three deep diamond drill holes at Austin for ~1500m. The holes are very widely spaced; DDH101 is spaced 150m down plunge from known mineralization, DDH 102 is located ~80m down plunge of known mineralization. DDH 102a is a wedge plus ~25m of navi drilling off hole DDH 102, aligning the drilling to intersect ~35m deeper into the projected plunge of mineralisation.

SWN has commenced the first of another 9 planned holes, a combination of RC and diamond drilling.

Three holes are designed to intersect mineralisation at the “open-cut” level with the purpose of increasing resource size and improving copper and zinc grade. Six holes are designed to test EM conductor positions and projected mineralised positions.

Downhole EM conductors from the most recent survey at Austin model about 30m away off the projected trend of mineralization.

The conductors as modeled from DDH101 comprises two plates; the upper conductor plate has interpreted dimensions of approximately 120m x 75m wide and the lower conductor plate modeled as approximately 190m x 150m wide.

These new targets may represent en echelon duplicate zones at Austin, and will be tested by drilling as part of the next 9 hole priority. Drilled and planned priority holes below the defined resource are shown as black and red respectively.

The company is currently sourcing an RC rig to complement and speed up the drilling at Austin.

The company is currently receiving the results of recent downhole geophysical surveys. Downhole electromagnetics has been completed at T&J, Robert (Quinns), Lady Alma and Copper Hills (Yagahong); the company is awaiting the written report.

Silver Swan will progressively update shareholders on the drilling progress and geophysics.

The company is seeking polymetallic targets with a focus on lode gold, copper-gold and volcanogenic massive sulphides in Archaean and Proterozoic terrains.