QUARTERLY REPORT FOR THE
PERIOD ENDING 30 JUNE 2008
HIGHLIGHTS
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A decision has been made to move to owner miner from contract mining for
the underground mine.
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A change in mine design to narrow vein mining methods has been made
which is expected to improve the ore grade delivered to the mill,
significantly reduce waste development and reduce mining and fuel costs.
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New high grade lode discovered below the high grade Gonzales lodes.
COYOTE GOLD PROJECT
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Underground Mining
The Coyote Gold Project underground development continued during the June 2008 quarter aimed
at advancing the main decline and establishing sufficient ore drives to gain access for stoping of
the high grade Gonzales Lode.
With the increasing exposure of the orebody as the underground workings are developed, it has
become more evident that the very high grade mineralisation is predominantly located within
visual narrow quartz veins.
Importantly, geological mapping to date has confirmed continuity of the lode laterally along strike
and vertically up and down dip.
Given the continuous narrow high grade veins evidenced in both the bottom of the Coyote open
pit and now in the underground workings, the Company undertook a review of the mining
methods and mine design at Coyote to determine whether the high grade narrow veins could be
mined in a more efficient and cost effective manner.
The outcome of the review, which was undertaken with the assistance of narrow vein mining
specialists, is that the Company is currently implementing a more appropriate selective mining
method. The changed method will significantly reduce waste mining through minimising the size
of the development drives and stopes which are designed to achieve higher grade ore with
minimal dilution and ore loss.
The change in mining method is a positive development in reducing mining costs, as smaller
equipment and stoping methods will result in a significant reduction of waste removal and ground
support requirements. The reduced ore drive dimensions, smaller equipment and resultant
reduced ventilation requirements, will also see a reduction in power and fuel consumption which is
important given the increasing price of diesel.
QUARTERLY REPORT FOR THE PERIOD ENDING 30 JUNE 2008
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The principal objective of the new mining method is to achieve increased grade and ounces
while significantly reducing the tonnes of waste mined.
As announced on 21 May 2008, the Company has moved to owner operator mining due to
the changed mining method. The transition to owner miner is well advanced with a core
group of miners with narrow vein mining experience now on site and additional narrow vein
miners due on site over the next few weeks. During the next few months, the Company will
also take delivery of more suitable smaller mining equipment, which will be progressively
mobilised to site. Underground development and mining will continue during the transition
to owner miner.
The amended mine design, which is based on narrow vein mining methods, is currently
being introduced on site with an increase in ore drive development rates already being
achieved. As the new mining team is increased over the next few weeks, it is anticipated
that the ore drive development rates will continue to improve.
Given the transition to owner miner and the amended mine design, the development of the
underground mine to access the high grade stoping ore (+13g/t Au) is anticipated to be
ramped up during the next few months. The ramp up will occur as Tanami Gold's own
mining team is increased to full production levels and as additional narrow vein mining
equipment is mobilised to site.
Decline and ore drive development has been ongoing with a total of 390 metres developed
during the Quarter. The decline advance was 213 metres bringing the total length to 375
metres to a depth of some 105 metres below the surface. In addition, ore drive development
on ore bearing veins amounted to 77 metres and 80 metres of waste development was
completed.
Due to the soft oxidised material currently being mined, some of the development has been
carried out with the trialling of a mechanical rock cutter with encouraging results to date.
Further development with the rock cutter will be carried out during the September 2008
Quarter.
Figure 1: Portal cut with rock cutter
Figure 2: Ore slotted out with cutter in 335 ore
drive
The ongoing ore drive development, including detailed mapping of the exposed ore, is being
used to determine the most productive mining method.
Results to date indicate that a narrow vein mining approach with high grade and low tonnes,
will recover more of the resource at significantly higher grades and better economics than
the original cut and fill approach.
QUARTERLY REPORT FOR THE PERIOD ENDING 30 JUNE 2008
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Surface Mining
Mining at the Bald Hill pits was completed on 7 May 2008 with any further mining pending
geological reassessment. Ore haulage from Bald Hill continued until mid June 2008 building
up stock piles at the plant site.
Mining and haulage equipment was demobilised by the end of the quarter.
A total of 246,446 bcm was mined from the pits during the Quarter, including 41,952
tonnes of ore.
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Treatment Plant
Due to the underground mine still being developed, no high grade ore was treated during
the Quarter. With the change in the mine design to narrow vein mining methods and the
transition to owner miner, full operating and treatment mode including treatment of high
grade ore from underground, is now scheduled for the December 2008 Quarter. A gradual
ramp up in development ore will occur during the September 2008 Quarter with high grade
stoping ore being available for treatment during the December 2008 Quarter.
During the Quarter, only lower grade open pit ore was treated. The plant performed well with
throughput as planned. The throughput for the quarter was 56,065 tonnes at 3.37 g/t at a
recovery of 95%. Gold poured was 5,799 ounces with the production revenue being applied
against the ongoing development costs of the Project.
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General
Rehabilitation of the waste dump at Coyote commenced with the water containment cells on
the top of the dump finalised and over 90% of the remaining earthworks completed. Two
new dewatering bores for underground were also drilled.
QUARTERLY REPORT FOR THE PERIOD ENDING 30 JUNE 2008
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EXPLORATION
The Company commenced field exploration activities during the quarter, comprising
diamond core drilling undertaken as part of the Coyote Gold Project Stage 2 Development
program which is aimed at underpinning a long mine life through the conversion of
resources to reserves, and extension of mineralisation along strike and at depth at Coyote.
Regional exploration programs were also commenced, including geophysical surveying at
the Tekapo Prospect in the Northern Territory and RAB drilling at the Fremlin Prospect in
Western Australia.
The Company’s extensive land portfolio, located in the Tanami-Arunta province of central
Australia, is shown below in Figure 3.
Figure 3: Tanami Gold NL Projects
COYOTE GOLD PROJECT
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Coyote In-Mine Exploration Program
The change in mining method to narrow vein mining will improve the economics of
extracting gold mineralisation hosted in narrow quartz vein lodes which had previously been
uneconomic to mine with large open cut equipment. Several high grade veins have been
identified from pit mapping and sampling programs, extending beyond the current mine
reserves.
In particular the high grade Gonzales Lode has been mapped on the east face of Pit 2 almost
to surface, and is now believed to extend further to the east than is currently modelled in the
resource/reserve model. Drilling is planned to test this potential significant strike extension
to the east of the open pit - see Figure 4.
QUARTERLY REPORT FOR THE PERIOD ENDING 30 JUNE 2008
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In addition, extensions to several lodes within Pit 2, which were partly mined during the
open cut mining phase, have been mapped on the western wall of Pit 2. Exploration adits
have been commenced with the objective to drive along the strike of the veins and test the
continuity and tenor of the veins.
Figure 4. Coyote Composite Long Section - showing the location of the newly discovered
quartz vein containing abundant visible gold drill and drill targets east of the Open Pit.
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Coyote Extensions Program
The Company commenced a major diamond core drilling program in late April 2008. The
program aims to discover significant new gold mineralisation which may, with additional
delineation drilling and feasibility studies, lead to a future increase in the overall Coyote
Mineral Resource and Reserve. The drilling program is targeting down-plunge and depth
extensions of the high grade gold lodes within the Coyote mineralised system.
As announced on 21 July 2008, diamond core drillhole CYDD170 intersected a significant
new gold mineralised quartz vein located approximately 100m beneath the Gonzales Lode see Figures 4 and 5.
CYDD170 was designed to target several prospective stratigraphic horizons in the hangingwall position of the Gonzales Fault, which is analogous to the location of the GonzalesBuggsy high grade lodes. The newly discovered high grade vein, which has a true width of
10cm (which is typical of the high grade mineralised quartz veins in other lodes at Coyote)
was intersected approximately 100 metres below the Gonzales zone. The vein contains
abundant fine grained visible gold - see Figure 6. Assays are pending.
QUARTERLY REPORT FOR THE PERIOD ENDING 30 JUNE 2008
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Figure 5: Coyote Extensions Project – CYDD170, targeting mineralised zones in the hanging-wall
of the Coyote Fault.
Figure 6: CYDD170 – photograph of visible gold within the new vein intersected approximately
100 metres below Gonzales.
QUARTERLY REPORT FOR THE PERIOD ENDING 30 JUNE 2008
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REGIONAL EXPLORATION
Tekapo Geophysical Survey Program
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Located in the Lake Mackay Project within the Arunta Province of the Northern Territory (see
Figure 3), the Tekapo Prospect returned first pass drill intercepts in 2006 of up to 16 metres
at 3.4g/t Au from 29 metres and 4 metres at 2.7% Cu from 49 metres.
Detailed ground-based geophysical surveying was commenced at Tekapo during the June
2008 Quarter comprising magnetic and gravity surveying. Follow-up Induced Polarisation
(‘IP’) and Electromagnetic (‘EM’) surveying is planned to be completed in the September 2008
Quarter.
The aim of the survey is to detect deeper drill targets at Tekapo, and also to determine a
geophysical signature of the Tekapo mineralisation which can be applied to broader airborne
surveying over the entire Lake Mackay Project.
Regional Drill Programs
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A RAB/Aircore drilling program totalling approximately 35,000 metres, commenced in midJuly 2008. The program will test several highly ranked drill prospects located throughout
the Company’s Tanami landholding in Western Australia and the Northern Territory. Drilling
is currently underway at the Fremlin target area located approximately 20 kilometres south
of Coyote.
CORPORATE
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Directors
Due to retirement, Frank Sibbel stood down as a Director effective 30 June 2008.
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Other
Tanami Gold NL is debt free with no gold hedging in place.
Web Site
The Tanami Gold NL web site is www.tanami.com.au.
Denis Waddell
Executive Chairman
Dated:
31 July 2008
Note:
The information in this report that relates to Exploration Results is based on information compiled by Mr Tim Smith, MAIG, a full
time employee and Exploration Manager of Tanami Gold NL. Mr Smith is a member of the Australian Institute of Geoscientists and
has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration to qualify as a
Competent Person as defined in the December 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves (JORC Code). Mr Smith consents to the inclusion in the report of the matters based on his information in
the form and content in which it appears.
QUARTERLY REPORT FOR THE PERIOD ENDING 30 JUNE 2008