Mongolia - General Mining

General Mining Corporation 

Limited 

ABN 95 125 721 075 

2009 Prospectus 

An offer to raise up to $8,000,000 by the issue of 

up to 40,000,000 ordinary fully paid Shares in the 

Company at an issue price of $0.20 per Share. 

Sponsoring Broker to the Offer 

This is an important document. Please consult your 

professional adviser(s) if you have any questions. The 

mineral properties described in this Prospectus are at 

the exploration and evaluation stage and accordingly 

investment in the Shares offered by this Prospectus 

should be regarded as speculative in nature. 

General Mining Corporation Ltd ~ Prospectus 

1

2 

Summary 

IMPORTANT NOTICE 

This Prospectus is dated 26 October 2009 and was 

lodged with the ASIC on that date. No Shares will 

be issued on the basis of this Prospectus later than 13 

months after the date of this Prospectus. 

Neither the ASIC nor ASX take any responsibility for 

the content of this Prospectus or the merits of the 

investment to which this Prospectus relates. 

The distribution of this Prospectus in jurisdictions 

outside Australia may be restricted by law and 

therefore persons into whose possession this 

document comes should seek advice on and observe 

any such restrictions. Any failure to comply with these 

restrictions may constitute a violation of those laws. 

This Prospectus does not constitute an offer of Shares 

in any jurisdiction where, or to any person to whom, it 

would be unlawful to issue this Prospectus. 

The Shares the subject of this Prospectus should 

be considered speculative. It is important that you 

read this Prospectus carefully, in its entirety and seek 

professional advice where necessary before deciding 

to invest in the Company. In particular, in considering 

the prospects for the Company, you should consider 

the risk factors set out in section 10 that could affect 

the performance of the Company. The Offer does 

not take into account your investment objectives, 

financial situation and particular needs. Accordingly, 

you should carefully consider the risk factors in light 

of your personal circumstances and seek professional 

advice from your accountant, stockbroker, lawyer or 

other professional adviser before deciding whether to 

invest. 

No person is authorised to provide any information or 

make any representation in connection with the Offer 

contained in this Prospectus which is not contained in 

this Prospectus. 

WEB SITE – ELECTRONIC PROSPECTUS 

A copy of this Prospectus may be downloaded from 

the Company’s website at www.generalmining.com. 

Any person accessing the electronic version of this 

Prospectus for the purpose of making an investment 

in the Company must be an Australian resident and 

must only access the Prospectus from within Australia. 

Persons who access the electronic version of this 

Prospectus should ensure that they download and 

read the entire Prospectus. 

The Corporations Act prohibits any persons passing 

onto another person an Application Form unless 

it is attached to a hard copy of this Prospectus or it 

accompanies the complete and unaltered version 

of this Prospectus. Any persons may obtain a hard 

copy of this Prospectus free of charge by contacting 

the Company by telephone on (08) 9227 1186 during 

normal business hours.


GMM’s Directors view Mongolia as a major untapped mineral 

province. A large multinational miner operating in Mongolia 

is on record as saying that it sees parallels between Rio Tinto/ 

Ivanhoe Mines’ large Oyu Tolgoi copper/gold project and the 

initial investment in Escondida copper mine in Chile over 

20 years ago and their recent project in Madagascar, 

which have helped develop strong sustainable 

mineral industries in those countries. 

EXPOSURE PERIOD 

This Prospectus will be circulated during 

the Exposure Period. The purpose of the 

Exposure Period is to enable this Prospectus 

to be examined by market participants prior 

to the raising of funds. Potential investors 

should be aware that this examination may 

result in the identification of deficiencies in the 

Prospectus and, in those circumstances, any 

application that has been received may need 

to be dealt with in accordance with Section 

724 of the Corporations Act. 

Applications for Shares under this Prospectus 

will not be accepted by the Company until 

after the expiry of the Exposure Period. No 

preference will be conferred on persons who 

lodge applications before the expiry of the 

Exposure Period. 

GLOSSARY 

Certain terms and abbreviations used in this 

Prospectus have defined meanings which are 

explained in the Glossary at the end of 

the Prospectus. 

KEY DATES 

Lodgement of Prospectus 26 Oct 09 

Opening Date 3 Nov 09 

Closing Date (5.00pm WST) 4 Dec 09 

Allotment of Shares under this 

Prospectus (anticipated) 

Trading of Shares to 

commence on ASX 

(anticipated) 

9 Dec 09 

11 Dec 09 

The above dates are indicative only and may 

vary. The Company reserves the right to 

change the key dates of the Offer without prior 

notice which may have a consequential impact 

on other dates. 

Golden Cross license 13847X 


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4 

Summary Investment Summary 

Directors 

Michael Wright 

(Chairman) 

Dr. Boris Matveev 

(Managing Director Elect) 

Robert Wanless 

(Non-executive Director) 

Craig Readhead 


Christopher Wanless 


Company Secretary 

Lindsay Colless 

(Joint Company Secretary) 

Karen Brown 


Registered Office and Principal 

Place of Business 

129 Edward Street 

Perth WA 6000 

Tel: (61) 8 9227 1186 

Fax: (61) 8 9227 8178 

PO Box 8475 

Perth Business Centre WA 6849 

Sponsoring Broker 

State One Stockbroking Ltd 

AFSL No. 247100 

Level 14, State One House 

172 St Georges Terrace 

Perth WA 6000 

Ph: (61) 8 9288 3388 

Fax: (61) 8 9321 6998 

Level 20, Australia Square 

264 George St 

Sydney NSW 2000 

Ph: (61) 2 9024 9118 

advice@stateone.com.au 

www.stateone.com.au 

Company Directory 

Solicitor to the Offer & Report 

on Australian Tenements 

Allion Legal 

Level 2 

50 Kings Park Road 

West Perth WA 6005 

Independent Geologist 

JL Geological Services Pty Ltd 

13 Peter Street, 

Attadale WA 6156 

Auditor and 

Independent Accountant 

Stantons International Pty Ltd 

Level 1, 1 Havelock Street 

West Perth, WA 6005 

Ph: (61) 8 9481 3188 

Share Registry 

Advanced Share Registry Limited 

150 Stirling Highway, 

Nedlands, WA 6009


Table of Contents Chairman’s Letter 6 

1 Project Overview 10 

2 Profiles of Directors & Management 18 

3 Details of the Offer 20 

4 Independent Geological Report - Mongolia 22 

5 Independent Geological Report – Australia 40 

6 Licensing in Mongolia 62 

7 Independent Solicitor’s Report 66 

8 Independent Accountant’s Report 74 

9 Corporate Governance 85 

10 Risk Factors 90 

11 Additional Information 95 

12 Directors’ Statements 102 

Glossary 103 

Application Form 105 


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Investment Summary 

Chairman’s Letter 

Dear Investor, 

On behalf of the Directors of General Mining Corporation Limited (ASX code: GMM) it is with pleasure that 

I invite you to invest in GMM by subscribing for Shares under this Prospectus. 

The continued activity in the resources sector during the recent downturn, particularly by interests associated 

with China, illustrates the strong underlying demand for resources which is expected to increase as the 

world economy improves. Two of the Company’s projects in particular offer exposure to the appetite of the 

fast developing economies of Asia. In Mongolia, the Uvs Basin evaporite project comprises over 2000km 2 

of licences covering prospective evaporite horizons that may host high grade potash layers intersected by 

limited historical drilling within 30km of the Company’s tenements. Potash is a bulk commodity utilised 

primarily on food crops. The project is strategically located next to transport corridors leading to major Asian 

markets including China, the world’s largest importer and consumer of potash. 

The recent signing by the Mongolian Government of the Oyu Tolgoi agreement with Rio Tinto and Ivanhoe 

provides greater certainty for foreign investors in Mongolia, and is set to focus attention on what is widely 

regarded as one of the world’s last exploration frontiers. GMM is in possession of a significant historical 

geological database covering many of the identified mineral occurrences and deposits of Mongolia. With 

the recent appointment of Dr. Boris Matveev as Managing Director, who has extensive experience in Central 

Asia and neighbouring Russia, the Company is well placed to take advantage of opportunities in Mongolia. 

This has also led to GMM entering into a Strategic Alliance with ASX-listed Galaxy Resources Ltd with a 

view to jointly identifying and developing lithium projects in Central Asia. Operating in Mongolia is not 

without its risks and investors are asked to understand the sovereign, political and climatic risks detailed in 

section 10. 

At the Shoemaker project in Western Australia, preliminary exploration indicates good potential for a large 

direct shipping grade iron deposit within the emerging Mid-West iron-ore province. With companies in China 

seeking alternatives to the BHP-Rio Tinto dominated Hamersley, the Mid-West region is set to become an 

important supplier of iron ore. Other projects in Australia cover prospective manganese horizons within the 

emerging Wolfe Basin (Mt Kinahan) and two ready to drill geophysical targets prospective for iron-oxidecopper-gold 

and carbonatite related mineralisation (Eyre and Webb). 

The directors of GMM are all well experienced in the mid-sized mining and exploration industry and have 

strong and diverse technical backgrounds, including corporate and project management, exploration and 

mine geology, metallurgy, financing, legal, corporate governance and metal and minerals marketing. 

The funds raised by this Prospectus will be used to commence exploration and drilling programs at the 

Uvs Basin potash project in Mongolia, and at Shoemaker, Eyre and Mt Kinahan in Western Australia, whilst 

conducting preliminary work on the Company’s other projects. 

Shareholders of Galaxy Resources Ltd have a priority right to subscribe for shares in GMM. For details of 

the priority offer refer to section 3.2 . 

I look forward to welcoming you as a shareholder of GMM. 


Chairman

Expenditure Plans and Use of Funds 

The budgeted expenditure figures for the Company for the first two years following listing are set out below. The 

Board has elected to accept a minimum capital raising of $4 million, which the Board considers will be sufficient to 

achieve substantial progress with all the projects and allow the Company to have sufficient working capital to meet 

its business obligations, as set out below, upon completion of the Offer. The objective will be to raise $8 million 

which will allow the Company to undertake exploration programs in Australia and Mongolia. 

$4 million raising $8 million raising 

IPO funds $4,000,000 $8,000,000 

Budget Expenditure $4 million raising $8 million raising 

Year 1 Year 2 Year 1 Year 2 

Pre-float and acquisition expenses $220,000 – $220,000 – 

Broker fees $200,000 – $400,000 – 

Uvs Basin project $200,000 $300,000 $750,000 $1,500,000 

Shoemaker project, Australia $440,000 $440,000 $440,000 $440,000 

Eyre project, Australia $180,000 $50,000 $180,000 $110,000 

Webb project, Australia $50,000 $50,000 $340,000 $155,000 

Veevers project, Australia $40,000 $75,000 $40,000 $75,000 

Other Mongolian projects $75,000 $75,000 $150,000 $150,000 

Other projects 1 $100,000 $100,000 $200,000 $200,000 

Administration $580,000 $525,000 $875,000 $850,000 

Working capital $150,000 $150,000 $425,000 $500,000 

Total $2,235,000 $1,765,000 $4,020,000 $3,980,000 

1 Black Hill, Mt Kinahan, Galaxy Alliance 

The proposed expenditure will be refined to suit the results of programs as they proceed, and will significantly 

exceed the statutory minimum expenditure requirements. 

Details of the intended exploration programs are set out below. 

Capital Structure 

As at the date of this Prospectus, the issued share capital of the Company is 22,100,000 Shares. 

The capital structure at completion of the Offer, assuming the Offer is fully subscribed, is set out below: 

Issued Share capital Number of 

Shares 

$4m Raising $8m Raising 

% of Shares Number of 

Shares 

% of Shares 

Shares on issue as at the date of the Prospectus 22,100,000 45.6% 22,100,000 32.1% 

Shares to be issued on acquisition of tenements 1 5,000,000 2 10.3% 5,000,000 2 7.3% 

Other shares to be issued on listing 3 937,394 2% 937,394 1.3% 

Shares to be issued pursuant to the Prospectus 4 20,000,000 41.3% 40,000,000 58.2% 

Broker success shares 400,000 0.8% 800,000 1.1 

Total Shares on issue at the close of the Offer 48,437,394 100% 68,837,394 100% 

1 Details on the Shares to be issued on acquisition of tenements is set out in Section 7 of this Prospectus. 

2 Shares to be issued to Galaxy Resources Ltd under the Shoemaker Sale Agreement. See section 7 for details. 

3 Shares to be issued to Directors and Mineral Administration Services Pty Ltd in lieu of fees. See section 11 for details. 

The Company has also issued 11,850,000 Options to Directors, officers and other parties, details of which are set 

out in section 11.6 below 


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Investment Summary 

INVESTMENT SUMMARY 

Company Overview and Objectives 

Key Points: 

• Licences covering over 2000km 2 of prospective evaporite geology targeting 

potash and lithium and potassium brines in north-western Mongolia. 

• The signing of the investment agreement for the Rio Tinto and Ivanhoe Mines 

Oyu Tolgoi deposit is set to lead to significant interest in resource rich Mongolia. 

• GMM is well placed to take advantage of opportunities in Mongolia due to its 

large geological database and experienced personnel. 

• GMM’s managing director elect, Dr. Matveev has extensive experience in Central 

Asia and Russia. 

• Large exploration targets at Shoemaker (Western Australia) prospective for 

hematite iron deposits. 

• Strategic Alliance with Galaxy Resources Ltd to identify and jointly develop 

lithium projects in Mongolia and Kazakstan. 

• Up to 40% of the Offer to be allocated to Galaxy shareholders under a Priority 

Offer. 

• Investors should be aware that there are risks associated with an investment in 

GMM and investors are encouraged to read Section 6: Licencing in Mongolia 

and Section 10: Risk Factors. 

BarunTserd, Mongolia: 

outcrop in Middle Devonian evaporite

GMM has worked extensively over the last year to 

bring together a strong portfolio of projects that offer 

potential for economic discoveries. The Directors 

believe that the recent signing of the $4 billion Oyu 

Tolgoi investment agreement between Rio Tinto, 

Ivanhoe Mines Ltd and the Mongolian Government is 

set to generate significant interest in this resource rich 

country. With Dr Boris Matveev, who has extensive 

experience in Central Asia, and the Company’s 

subsidiary, Golden Cross LLC, holding 10 licences 

covering over 3800km2 and an extensive database of 

geological information covering much of the country, 

the Directors believe the Company is well placed to 

take advantage of opportunities in Mongolia. 

GMM has assembled a highly experienced and 

successful team to move the Company forward. 

Priority Offer for shareholders of Galaxy 

Resources Ltd 

GMM has also entered into a Strategic Alliance with 

emerging major lithium producer Galaxy Resources 

Ltd (ASX Code: GXY) with the intention of utilising 

GMM’s geological database and networks to identify 

lithium opportunities in Mongolia and Kazakhstan 

for joint development by Galaxy and GMM. GMM 

will receive a 20% free carried interest through to 

completion of a bankable feasibility study if a project is 

selected for joint venture under the Strategic Alliance. 

In accordance with the Strategic Alliance, GMM has 

agreed to set aside 40% of the Shares to be issued 

under the Offer to Galaxy shareholders as at 5.00 p.m. 

WST on 26 October 2009 with a registered address in 

Australia (“Priority Offer”). Shares will be allocated 

at the Directors’ discretion. See section 3.2 for details. 

Company Objectives 

The Company’s objectives for the immediate future 

are: 

• To advance the Company’s potash project in 

Mongolia under the direction of a highly capable 

exploration team in preparation for exploration during 

the forthcoming Mongolian field season. 

• To undertake a drilling program to define the iron 

potential of the Shoemaker Iron project. 

• To drill-test the Company’s ready to drill ironoxide-copper-gold 

(“IOCG”) and carbonatite targets in 

Australia. 

The Company’s long term objectives are: 

• To deliver long-term, sustainable cash flow through 

the discovery and development of large high value 

and high margin mineral deposits. 

• To build a successful mining company through 

focusing on long term growth opportunities and 

prudent capital and financial management. 

Project Highlights 

Uvs Basin, Mongolia 

(Potash, GMM 100%) 

• Five granted licences covering over 2000km2 of 

prospective marine and non-marine evaporite geology 

prospective for stratiform or diapir hosted potash and 

also potassium and lithium brines. 

• Reported potash intersections of 1.8m at 39.5% 

KCl and 9.7m at 16.21% KCl along the nearby 

Russian-Mongolian border. Whilst not located on the 

Company’s licences the results confirm that sylvite 

settling occurred within a middle Devonian evaporite 

sequence which also outcrops on the Company’s 

licences. 

• Bulk commodity and solution mining target with 

improving access to freight transport corridors in 

Russia leading to ports and Asian markets. 

Shoemaker, Australia 

(Iron, GMM 50% earning up to 80%) 

• Extensive hematite enriched outcrops with assays 

up to 69.6% Fe from grab sampling with low levels of 

contaminants. 

• Geophysical surveys have identified numerous 

gravity high and coincident magnetic low anomalies 

up to 5km by 1km associated with mapped hematite 

outcrops, representing possible large tonnage 

exploration targets. 

Mt Kinahan, Australia 

(Manganese, Copper, GMM 100%) 

• A prospective manganese horizon within the Wolfe 

Basin in Western Australia, also being targeted by ASX 

listed Ausquest Ltd. 

• High grade copper pods along a north-east trending 

fault. 

IOCG & Carbonatite Targets, Australia 

(Cu-Au-U, REE, GMM 100%) 

• Large geophysical targets at Eyre, Webb and Veevers 

covering coincident gravity and magnetic targets 

prospective for Olympic Dam style iron-oxide-coppergold 

or Palabora style carbonatite mineralisation. 

• Drill testing of Eyre to commence shortly after 

listing. 


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Summary 

1 - PROJECT OVERVIEW 

1.1 Project Locations 

GMM holds exploration licences in both Western Australia and Mongolia. 

The Company’s Mongolian licences are centered in the north-west region of the 

country within the Uvs province which adjoins Russia to the north, and along 

the Khangai fault. GMM has also entered into a Strategic Alliance with Galaxy 

Resources Ltd with a view of jointly identifying and developing lithium projects in 

Mongolia and Kazakhstan. 

Uvs Potash Projects 

Khangai Fault Projects 

Black Hill 

Mt Kinahan 

Veevers 

Webb 

Shoemaker 

Eyre 

Figure 1: Location Map of GMM Projects

Mongolia 

1.2 Mongolian Projects 

1.2.1 The Untapped Mineral Potential of 


Mongolia is a young, developing democracy that sits 

between Russia and the resource hungry China. Since 

the fall of communism in the early 1990’s in Mongolia 

the Government has been seeking to overcome its 

dependence on Moscow and Beijing, and accordingly 

has been seeking to build stronger ties with the West 

under its so-called “third neighbour” policy. 

Despite Mongolia being surrounded by mineral 

rich regions such as Siberia, Kazakhstan and Inner 

Mongolia, only little modern exploration has been 

conducted within the country. Russian explorers 

throughout the 1960’s and 1970’s focused attention on 

Mongolia, which resulted in an extensive database of 

geological and geochemical maps and several world 

class discoveries. More recently a rush of investment 

in Mongolia during the late 1990’s and into the next 

decade resulted in a number of significant discoveries 

including the Oyu Tolgoi copper-gold deposit. This led 

to a political debate in Mongolia over how the country 

should best manage its resources. The ensuing political 

and legal uncertainty resulted in long delays to the 

signing of an investment agreement with Ivanhoe 

Mines Ltd and Rio Tinto, the owners of Oyu Tolgoi. 

The signing of a stability agreement for the development 

of the Ivanhoe and Rio Tintos flagship, the multi-billion 

dollar Oyu Tolgoi copper-gold project, is a large vote 

of confidence by Mongolia in foreign investment 

and by Rio Tinto and Ivanhoe in Mongolia’s future. 

Notwithstanding this, there remain significant sovereign 

risks in operating in a country such as Mongolia. 

With world class deposits such as Oyu Tolgoi (reported 

resources of 1.39b tonnes at 0.98% copper and 0.24 g/t 

gold as of March 2007) and Erdenet (reported resources 

of approximately 1.78b tonnes at 0.62% copper 

and 0.025% molybdenum) and with little modern 

exploration having been conducted over large areas of 

the country, Mongolia has the potential to emerge as 

one of the most attractive exploration frontiers in the 

world. Mongolia’s location next to China provides a 

ready market for Mongolia’s mineral wealth. 

Figure 2: 

Copper in outcrop in Gabbro along the Khangai Fault 


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1 - Project Overview 

1.2.2 Uvs Basin (Potash, GMM 100%) 

GMM is targeting solid potash, and lithium and 

potassium brines, within the Uvs Basin – a large 

closed drainage basin in what was once a sea. GMM 

considers the Uvs Basin to be highly prospective for 

solid potash as well as lithium and potassium brines 

due to: 

• the large enclosed basin with high evaporation 

rates; 

• the presence of a Middle Devonian evaporite 

sequence up to 600m thick and confirmation that 

sylvite (KCl) precipitation occurred within the basin 

with recorded potash intersections of 1.8m at 39% 

KCl and 9.7m at 16% KCl at the northern edge of the 

basin at Tuz Tag (Russia); 

Sample No. KCl 

Wt. 

% 

MgCl 2 

Wt. 

% 

NaCl 

Wt. 

% 

CaSO 4 

Wt. 

% 

• a geological environment suitable for the 

deposition of lithium brines; and 

• a unique climate that opens the possibility of 

utilising low cost evaporative and cold crystallisation 

processing methods for lithium and potassium 

brines. 

The evaporite outcrops in several places within 

the basin. At the northern edge, on the Russian 

side of the basin, there are several known salt 

deposits including Tuz Tag. Limited drilling by 

Russian explorers within this deposit produced very 

encouraging results close to the surface which are 

shown in the following tables. 

CaCl 2 

Wt. 

% 

Insoluble 

Content 

Wt.% 

ΣTotal 

Salt 

Wt.% 

Rock Colour 

74 65.63 2.58 21.90 3.39 – 4.09 97.59 citreous 

71 43.91 0.86 52.43 0.64 0.11 1.39 99.34 flesh-colored 

70 10.09 - 72.72 0.48 0.61 15.08 98.98 pink 

Sample No. No. 

of 

Drill 

Hole 

Depth m KCl 

Wt. 

% 

Table 2: Chemical Analysis of Tuz Tag Surface Samples; from Levenko (1960) 

NaCl 

Wt. 

% 

CaSO 4 

Wt. 

% 

CaCl 2 

Wt. 

% 

MgCl 2 

Wt. 

% 

Insoluble 

Content, 

Wt. 

% 

ΣTotal 

Salt 

Wt. 

% 

187 8 16.5-18.3 39.56 56.58 0.90 0.18 – 1.47 98.79 

189 8 23.30-24.30 1.98 95.72 0.50 0.03 – 0.45 98.68 

180 7 59.1-68.8 16.21 77.27 1.06 0.32 – 4.26 99.12 

183 7 90.7-100.1 3.77 69.42 0.46 1.69 1.26 17.55 94.15 

185 7 100.1-106.5 2.55 44.00 5.85 0.10 – 46.21 98.71 

171 5 38.2-40.2 1.83 96.23 0.38 0.08 – 0.73 99.25 

Table 3: Data of Chemical Analyses of Salt Layers with higher Potash Contents 

(Tuz Tag Deposit, Drill Hole 11, Top Salt Layer) 

The confirmation of potash within the Middle Devonian evaporite sequence is considered very significant 

as it confirms that the receding oceanic waters within the basin reached the point of sylvite settling. 

Investors should note that these results are from areas in proximity to, but not contained within the 

Company’s licences. Proximity of the Company’s licences to known results does not of itself indicate that 

the Company’s licences will contain any minerals. Investors are urged to read the Independent Geologists 

Report for Mongolia in section 4 and if necessary consult their own advisor. 

Other halite (evaporite) deposits outcrop on the Mongolian side of the basin including Shuuden Uul, 

where locals reported to GMM staff the presence of ‘blood red salt’, which may possibly represent 

sylvinite (potash). The Middle Devonian sequence outcrops in several other places, including a section 

up to 15km in length on GMM’s licence. In other places on GMM’s licences the evaporite presumably lies 

below younger sediments.

Figure 3: Shuuden Uul Halite Deposit and Open Pit, Mongolia 

The Uvs Basin project comprises five granted exploration licences, which cover a total area 

of 2015km 2 . No drilling appears to have been conducted to test the potential for bedded potash 

deposits within the Mongolian extent of the basin. Initial studies also suggest that the project 

would be amenable to solution mining utilising either evaporative or cold crystallisation methods. 

Figure 4: Artisinal mining at Shuuden Uul 

The Uvs Basin is well serviced by a sealed road, which leads to railways in Russia. This road and also 

power lines from nearby Russian plants, lead directly through GMM’s licences. The Russian railways 

lead to markets in China, Europe and to ports in the Russian Far East. Construction on a new railway 

in Russia to Kyzyl, just over 200km away by road, has commenced and is due for completion in 2014. 


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Why Potash? 

Figure 5: Possible export routes for Uvs Basin Potash project 

GMM has focused on potash due to its attractive economics and the project’s location next 

to the world’s largest consumer and importer of potash (China). Potash is used primarily as 

an agricultural fertiliser (plant nutrient) and is a source of soluble potassium, an essential 

plant nutrient. Demand for potash is closely linked to the demand for agricultural products. 

Increasing demand, particularly from Asia, is set to underpin growth in the potash industry 

in coming years. Potash offers an opportunity for a long-life, low-cost resource in a market 

that is forecast to grow strongly. 

Nitrogen 

Phosphate 

Potash 

0.00% 20.00% 40.00% 60.00% 80.00% 

3 months to 30 June 2008 

3 months to 30 June 2009 

Gross Margin (%) 

Figure 6: Potashcorp’s Gross Margins for Potash, Phosphate, Nitrogen 

(Source: Potashcorp, 2nd quarter earnings 2009, press release)

1.2.3 Khangai Fault 

(Base Metals GMM 100%) 

The Company also holds a number of tenements 

along the Khangai Fault. GMM’s Khangai Fault 

projects comprise five granted exploration licences 

covering a number of gabbro-mafic-ultramafic 

and porphyry intrusions. The Company’s Khangai 

Fault projects are covered in more detail in the 

Independent Geologists’ Report for Mongolia in 

section 4. 

1.2.4 Golden Cross LLC 

GMM has established a wholly owned subsidiary in 

Mongolia, Golden Cross LLC. This Company now 

holds ten exploration licences and one exploration 

licence application. 

GMM has compiled a large database of geological 

information on Mongolia. GMM has also worked 

to have its own licences granted and in so doing 

has developed strong relationships with local 

communities. This approach, combined with its 

large database of information on Mongolia, should 

allow the Company to capitalise quickly on any 

appropriate opportunities. 

1.2.5 Galaxy Lithium Alliance 

GMM has recently entered into a Strategic Alliance 

with ASX-listed Galaxy Resources Ltd (“Galaxy”) 

to identify lithium opportunities in Mongolia and 

Kazakhstan for joint venture by the parties. Under 

the terms of the Agreement Galaxy can earn up to 

MAP 

LOCATION 

INDIAN 

OCEAN 

Port 

Hedland 

Perth 

OAKAJEE 

GERALDTON 

Proposed rail corridors under study 

MULLEWA 

KARARA 

Gindalbie Metals Ltd 

80% in any lithium project taken up by the Strategic 

Alliance, with GMM retaining a free carried 20% 

interest to the completion of a bankable feasibility 

study. 

GMM will utilise its geological database and strong 

networks to identify opportunities for subsequent 

joint ventures with Galaxy. These opportunities may 

also arise from GMM’s own licences in Mongolia 

where potential exists for lithium brines. 

Australia 

1.3 Shoemaker, Western Australia 

(Iron, Gold, GMM 50% 

earning up to 80%) 

1.3.1 Project Summary 

The Shoemaker project is located 130km north-east 

of Wiluna in Western Australia within the Earaheedy 

Basin. The three granted exploration licences cover 

an area of approximately 300km2 . The project 

focuses on an area of the Frere Formation known as 

the Shoemaker Impact Structure (“SIS”). The project 

is located approximately 150km from the planned 

railway to the Golden West Resources Ltd iron ore 

deposit at Wiluna. 

GMM is targeting high grade hematite iron ore at 

Shoemaker. In addition, there is significant potential 

for mineralisation related to the large meteorite 

impact event, including gold and uranium. 

JACK HILLS 

Murchison Metals Ltd 

Midwest Corp Ltd 

MEEKATHARRA 

MT MAGNET 

WELD RANGE 

Midwest Corp Ltd 

SHOEMAKER 

WILUNA 

WILUNA 

Golden West 

Resources Ltd 

EXTENSION HILL Mt Gibson Iron Ore Ltd 

Figure 7: Location of Shoemaker project 


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GMM is acquiring a 50% interest in the project 

through the issue of 5,000,000 Shares and 2,500,000 

Options and payment of $100,000 to Galaxy. 

GMM can earn a further 30% through expenditure 

of $1,000,000 within two years. The agreement is 

conditional upon GMM completing a capital raising 

of at least $3,000,000 or a successful listing on the 

ASX. Further details of this agreement can be found 

in the Solicitor’s Report in Section 7. 

The iron formations within the Earaheedy Basin are 

subject to exploration further to the north-west by 

Rio Tinto, Giralia Resources Ltd and Vector Resources 

Ltd. The three granted exploration licences cover 

a large part of the SIS, where the Frere Formation 

forms a distinct circular pattern. This is presumably 

due to a large meteorite impacting directly onto the 

Frere Formation. Units of banded iron formations 

(“BIF”) and granular iron formations (“GIF”) occur 

throughout the Frere Formation within the project. 

Numerous supergene enriched iron zones occur 

within the BIF and GIF units of the SIS. 

Previous regional sampling of the Frere Formation 

in the 1970’s included some limited sampling at the 

north-western rim of the SIS. Rock samples 

returned assays of between 56% and 69.6% Fe with 

low phosphorus between 0.02 to 0.04%. Sampling 

conducted by Galaxy in 2008 focused on an area on 

the north-east rim of the Shoemaker Crater. Fifteen 

surface grab samples were taken from outcrops of 

hematite iron formation within the Frere Formation 

with assay results returning values up to 61.75% Fe 

with nine (9) samples returning grades greater than 

54.25% Fe. 

A detailed gravity survey was also conducted 

by Galaxy, which confirmed the presence of a 

significant number of gravity highs with estimated 

strike lengths of 1000 to 5000m, located around 

the SIS within the Frere Formation and associated 

with the hematite enriched iron formations. These 

represent large exploration targets for hematite iron 

ore, with the most significant of the gravity targets 

located in the north and north-eastern flank of the 

SIS, where Amax undertook sampling and on the 

southern flank. 

Initial work is expected to focus on defining and 

prioritising drill targets through field reconnaissance 

and drilling of prioritised targets. Further gravity 

surveys covering the south-eastern corner of the 

project area and western edge of the SIS are also 

proposed to be undertaken. 

The Shoemaker project represents an exciting target 

for iron ore exploration. Whilst the threshold for 

a project in this region of Western Australia to be 

economically viable is considered high, the Directors 

are confident that there is significant scope identified 

to date for this project to meet those thresholds.

1.4 Other Australian Projects 

1.4.1 Mt Kinahan, Western Australia 

(Manganese, GMM 100%) 

The Mt Kinahan project lies to the south-east of 

Halls Creek in the Kimberley region of Western 

Australia. The project covers a significant length of 

a prospective manganese horizon that is also the 

subject of exploration by Ausquest Limited (Wolfe 

Project). The project is also prospective for base 

metals, with several high grade copper pods along a 

north-east trending fault. 

1.4.2 Eyre, Western Australia 

(Base Metals, Rare Earths, Uranium, 

GMM 100%) 

GMM is targeting two distinct magnetic and gravity 

features which may relate to an iron-carbonatite, ironoxide-copper-gold 

(“IOCG”) or a mafic intrusive. 

At the Eyre prospect, a ground magnetic survey 

conducted by the Company revealed a large distinct 

elliptical magnetic anomaly with a 700nT magnetic 

high. This magnetic high is approximately 8km in 

diameter with an interpreted depth to magnetic 

source of approximately 580m. 

The presence of an alkaline environment, confirmed 

by nearby oil wells and Government water bores 

at a depth of 400m, confirms the prospectivity for 

carbonatite or IOCG related mineralisation. 

The Eyre project is located on Crown Land and 

Pastoral Leases with easy access from the Nullarbor 

Highway. The project is ready to drill. 

1.4.3 Veevers, Western Australia 

(Base Metals, GMM 100%) 

The Veevers project is located in the Great Sandy 

Desert in the north-east of Western Australia near 

the Northern Territory border. The project covers 

a large magnetic dipole anomaly (5km by 3.5km) 

on the flank of a basement (gravity) high defined 

by previous extensive geophysical surveys by CRA 

Exploration Pty Ltd. A single drill hole was sunk 

to test the anomaly. The hole was drilled to 432m 

where it was abandoned due to drilling conditions. 

The target remains untested despite its prospectivity 

for carbonatite or IOCG mineralisation styles. 

1.4.4 Webb, Western Australia 

(Base Metals, GMM 100%) 

The Webb project is located in the Great Sandy 

Desert in the east of Western Australia along the 

Northern Territory border. Previous work conducted 

by Geoscience Australia identified the Mt Webb 

Granites as having significant potential for IOCG 

mineralisation. Initial exploration by BHP defined a 

large 6 mGal gravity anomaly (3km by 6km) with 

an estimated depth to basement of 300m+ which 

BHP considered prospective for hematite IOCG 

mineralisation. Difficulties in negotiating access to the 

tenement for drilling led to the abandonment of the 

project. GMM has negotiated an access agreement 

that will allow drilling to commence on completion 

of a heritage survey. 


17

18 

2. PROFILES OF DIRECTORS & MANAGEMENT 


(Non-executive Chairman) 

B.Bus 

Mr. Wright has had over 25 years experience in the 

resources industry, particularly in the management 

of listed resource companies in the gold, minerals 

and oil and gas sectors. During that time he has held 

positions with Herald Resources, Laurel Bay Petroleum, 

Occidental Oil, the Griffin Coal group, Arthur Andersen 

and others. An executive director of Herald Resources 

from 1993 to 2008, Mr. Wright oversaw the development 

of six mines since joining that company. As part of that 

process, he was also instrumental in some of the early 

resource loans and innovative hedging arrangements in 

their infancy in Australia. In the last five years of his 

tenure to 2008, the market capitalisation of Herald grew 

from $50m to over $500m. 

Dr. Boris Matveev 

(Managing Director Elect) 

PhD, GradDipBus, MAIG 

Dr. Matveev has 28 years experience in the mining and 

exploration industry and in geoscientific research in 

Australia, Africa, the USA and FSU including the last 15 

years in senior and executive positions with ASX and 

AIM listed resource companies. His technical expertise 

includes exploration management, remote sensing 

& GIS and environmental management. As executive 

director of Carnegie Minerals plc, Dr. Matveev recently 

oversaw the development of a West African industrial 

mineral project from an early exploration stage to 

mining operations and export of mineral concentrates 

to China. Before moving to Australia in 1994, he held 

the position of associate professor and senior research 

positions at leading Moscow universities where he 

undertook projects in geology and natural resource 

management. Dr Matveev’s appointment as Managing 

Director is conditional upon GMM listing on the ASX. 

Halite, Shuuden Uul, Mongolia

Craig Readhead 

(Non-Executive Director) 

B Juris Llb. 

Mr Readhead holds the degrees of Bachelor of Law 

and Bachelor of Jurisprudence from the University 

of Western Australia. He has spent the last 30 years 

practicing in the resources law area and was a 

partner of a major Perth law firm before forming his 

own practice 10 years ago. He is now a principal 

of the law firm Allion Legal. Mr Readhead has had 

a significant role in the development of a number 

of mining projects within Australia, Africa and South 

East Asia. Mr Readhead is director of a number of 

listed and unlisted companies including Galaxy 

Resources Ltd. 

Robert Wanless 


Mr. Wanless is a prospector and mining investor 

with 32 years mining industry experience. He 

was employed by Placer Exploration Limited as a 

professional prospector and exploration supervisor 

covering South East Asia and Australia including 

exploration at Laloki, Watut and Pleysumi (PNG) 

and throughout Western Australia. Since then he 

embarked on all aspects of mineral exploration, 

assessment, acquisition, fieldwork, development 

and mining, mainly in Western Australia. He has 

negotiated numerous mining related sale and joint 

venture agreements with international and Australian 

mining companies involving gold, base metals and 

industrial mineral properties. Recently he managed 

the Alicia Gold Mine in Western Australia. He is a 

past founding director of ASX listed Greenstone 

Resources NL and current founding director of ASX 

listed Galaxy Resources Ltd. 

Christopher Wanless 


Llb (Hons)/BEc 

Mr. Wanless has a Hons Degree in Law and 

a Bachelors degree in Economics both from 

Monash University, Melbourne. He has worked for 

infrastructure consulting firm The Peron Group as a 

management consultant. 

He also has practical field experience in mineral 

exploration having worked for Greenstone Resources 

NL and Galaxy Resources Ltd. He is a director of 

Quaalup Investments Pty Ltd, a private resource 

investment company. Chris is also a director of the 

Company’s Mongolian subsidiary, Golden Cross LLC. 

Lindsay Colless 

(Joint Company Secretary ) 

CA, JP (NSW), FAICD 

Mr. Colless is a member of the Institute of Chartered 

Accountants in Australia with 15 years experience 

in the profession and a further 29 years experience 

in Commerce, mainly in the mineral and petroleum 

exploration industry in the capacities of financial 

controller, company secretary and director. He is a 

director of a number of public listed companies and 

company secretary for Alkane Resources Ltd. 

Karen Brown 


BEc(Hons) 

Ms. Brown is an honours graduate in Economics from 

the University of Western Australia. Ms. Brown has 

considerable experience in corporate administration 

of listed companies over a period spanning 24 years, 

primarily in the mineral exploration industry and is 

currently the company secretary for Austral Africa 

Resources Limited, Newland Resources Ltd and 

Northern Star Resources Ltd. 

Lhagva Choyon 

(Manager, Golden Cross LLC) 

Mr. Choyon holds a Bachelor of Science (Geology) and 

Masters in Mineral Exploration from the Mongolian 

University of Science and Technology, School of 

Geology. Mr. Choyon has previously worked as a 

Senior Exploration Geologist for Ivanhoe Mines 

Mongolia and Ivanhoe Australia Limited. Mr. Choyon 

has over seven-year exploration geology experience 

in Mongolia and Australia with emphasis on IOGC 

and porphyry style mineralization systems. Choyon 

has been managing exploration on drilling projects, 

directing field teams on mapping and geochemistry 

programs, and conducting project reviews. 


19

20 

3 - Details of the Offer 

3 - Details Of The Offer 

3.1 Shares Offered For Subscription 

This Prospectus invites investors to apply for up to 

40,000,000 Shares at a price of $0.20 for each Share 

to raise up to $8 million, before costs of the Offer. All 

Shares offered under this Prospectus will rank equally 

with existing Shares on issue. 

All application monies are payable in full on application. 

3.2 Priority Entitlement to Certain Galaxy 

Shareholders 

In accordance with the Strategic Alliance, GMM has 

agreed to set aside 40% of the Shares to be issued under 

the Offer to Galaxy shareholders as at 5.00 p.m. WST 

26 October 2009 with a registered address in Australia 

(“Priority Offer”). Shares will be allocated under the 

Priority Offer at the Directors’ discretion. 

If you are a Galaxy shareholder eligible to participate in 

the Priority Offer you will receive a letter from Galaxy 

advising you of the Priority Offer and your Holder 

Identification Number (“HIN”) or Shareholder Reference 

Number (“SRN”). Eligible Galaxy shareholders must 

provide their HIN or SRN on the Application Form 

where indicated. 

Any ineligible applications under the Priority Offer will 

be treated as if made under the public Offer. 

3.3 Application For Shares 

Applicants should read this Prospectus in its entirety in 

order to make an informed decision on the prospects 

of the Company and the rights attaching to the Shares 

offered by this Prospectus before deciding to apply for 

Shares. If you do not understand this Prospectus, you 

should consult your stockbroker, accountant or other 

professional adviser in order to satisfy yourself as to the 

contents of this Prospectus. The Shares offered by this 

Prospectus are speculative in nature. 

An Application for Shares can only be made on 

the Application Form contained at the back of this 

Prospectus. The Application Form must be completed 

in accordance with the instructions set out on the 

Application Form. 

Applications must be for a minimum of 10,000 Shares 

(being minimum application monies of $2,000), and 

thereafter in multiples of 2,500 Shares ($500). 

The Application Form must be accompanied by a 

cheque in Australian dollars, for the full amount of your 

application monies. Cheques must be made payable 

to “General Mining Corporation Ltd – Application 

Account” and should be crossed “Not Negotiable”. 

Application Forms must not be circulated to prospective 

investors unless accompanied by a copy of this 

Prospectus. 

Completed Application Forms and accompanying 

cheques must be received by no later than 5.00 pm 

(WST) on the Closing Date by State One Stockbroking 

Ltd: 

By Delivery to: 


Level 14, 172 St George’s Terrace 

Perth WA 6000 

or in Sydney to 

Level 20, Australia Square 

264 George St 

Sydney NSW 2000 

By Post to: 


PO Box 7625 

Cloisters Square WA 6850 

or 

PO Box R1931 

Royal Exchange NSW 1225 

The Company reserves the right to extend the Offer 

or close the Offer early without notice. Applicants 

are therefore urged to lodge their Application Form as 

soon as possible. 

An original, completed and lodged Application Form, 

together with a cheque for the application monies, 

constitutes a binding and irrevocable offer to subscribe 

for the number of Shares specified in the Application 

Form. The Application Form does not need to be 

signed to be a valid application. An Application will be 

deemed to have been accepted by the Company upon 

allotment of the Shares. 

If the Application Form is not completed correctly, 

or if the accompanying payment of the application 

monies is for the wrong amount, it may still be treated 

as valid. The Directors’ decision as to whether to treat 

the Application as valid and how to construe, amend 

or complete the Application Form is final. However, 

an Applicant will not be treated as having applied for 

more Shares than is indicated by the amount of the 

cheque for the application monies. 

No brokerage or stamp duty is payable by Applicants in 

respect of Applications for Shares under this Prospectus. 

3.4 Allocation and Allotment of Shares 

The Company reserves the right to reject any Application 

or to allocate to any Applicant fewer Shares than the 

number applied for. The Company also reserves the 

right to reject or aggregate multiple applications in 

determining final allocations. 

If an Application is not accepted or accepted in part 

only, the relevant portion of the Application monies 

will be returned to Applicants, without interest. 

The Company reserves the right not to proceed with 

the Offer or any part of the Offer at any time before 

the allocation of the Shares to Applicants. If the Offer 

or any part of it is cancelled, all Application monies, 

or the relevant Application monies will be refunded to 

Applicants without interest. 

The Company also reserves the right to close the Offer

or any part of it early, or extend the Offer or any part of 

it, or accept late Application Forms either generally or 

in particular cases. 

The allotment of Shares to Applicants will occur as soon 

as practicable after Application Forms and Application 

monies have been received for the minimum 

subscription of Shares being offered, following which 

statements of shareholding will be dispatched. It is the 

responsibility of Applicants to determine their allocation 

prior to trading in the Shares. Applicants who sell Shares 

before they receive their statement of shareholding will 

do so at their own risk. 

3.5 Application Money Held in Trust 

All Application monies will be deposited into a separate 

bank account of the Company and held in trust for 

Applicants until the Shares are issued or Application 

monies returned. Any interest that accrues will be 

retained by the Company and will not be paid to 

Applicants. 

3.6 Minimum Subscription and 

Oversubscriptions 

The minimum subscription to be raised under this 

Prospectus is $4 million. The maximum subscription is 

$8 million with the Company reserving the right to take 

an additional $1 million in oversubscriptions. 

No Shares will be issued pursuant to this Prospectus 

until the minimum subscription has been achieved. 

Should the minimum subscription not be reached 

within four months after the date of this Prospectus, all 

applications monies will be dealt with in accordance 

with the Corporations Act. 

The Company believes the minimum subscription 

will provide sufficient working capital to achieve its 

objectives as set out in this Prospectus. 

3.7 Dividend Policy 

The Company anticipates that significant expenditure 

will be incurred in the evaluation and development of 

the Company’s projects. These activities are expected 

to dominate the two year period following the issue of 

this Prospectus. Accordingly, the Company does not 

expect to declare any dividends during that period. 

Subject to the Company achieving sustained profitability, 

the Directors will consider paying dividends, having 

regard to available cash flow and capital requirements 

at the time. 

3.8 ASX Listing 

The Company will apply to ASX within seven days after 

the date of this Prospectus for admission to the Official 

List and for official quotation of the Shares, other than 

those existing Shares that the ASX is likely to treat as 

restricted securities as defined in the ASX Listing Rules. 

If the Shares are not admitted to official quotation within 

three months after the date of this Prospectus, or such 

longer period as ASIC may permit, none of the Shares 

offered by this Prospectus will be allotted or issued. In 

that circumstance, all Applications will be dealt with in 

accordance with the Corporations Act. 

The fact that ASX may admit the Company to the Official 

List is not to be taken in any way as an indication of the 

merits of the Company or the Shares. ASX, its officers 

and employees, take no responsibility for the contents 

of this Prospectus. 

3.9 Sponsoring Broker and Lead Manager 

State One Stockbroking Ltd (“State One”) has been 

appointed sponsoring broker and lead manager to the 

Offer. The terms of the appointment are summarised in 

section 11.3 below. 

State One will pay a fee of up to 3% in respect of 

Applications lodged by any member organisation 

of ASX, licensed securities dealer or the holder of an 

Australian Financial Securities Licence and accepted 

by the Company provided the relevant stamp of the 

organisation is on the Application Form. 

No brokerage or commission is payable by Applicants 

in respect of Shares issued pursuant to this Prospectus. 

3.10 CHESS 

The Company will apply to participate in the Clearing 

House Electronic Sub-register System (“CHESS”) 

operated by ASX Settlement and Transfer Corporation 

Pty Limited (“ASTC”) (a wholly owned subsidiary of 

ASX), in accordance with the ASX Listing Rules and 

ASTC Operating Rules. On admission to CHESS, the 

Company will operate an electronic issuer-sponsored 

sub-register and an electronic CHESS sub-register. The 

two sub-registers together will make up the Company’s 

register of Shareholders. 

The Company will not issue certificates to Shareholders. 

Instead, as soon as practicable after allotment, successful 

Applicants will receive a holding statement which sets 

out the number of Shares issued. A holding statement 

will also provide details of a security holder’s HIN (in 

the case of a holding on the CHESS sub-register) or SRN 

(in the case of a holding on the issuer-sponsored subregister). 

Following distribution of these initial holding statements, 

an updated holding statement will only be provided at 

the end of any month during which changes occur to the 

number of Shares held. Shareholders may also request 

statements at any other time (although the Company 

may charge an administration fee). 

3.11 Risk factors of an investment in the 

Company 

Prospective investors should be aware that an investment 

in the Company should be considered speculative and 

involves a number of risks inherent with exploration. 

Section 10 contains details of key risk factors which 

investors should be aware of. It is recommended 

that potential investors consider these factors carefully 

before deciding whether to invest in the Company. 

This Prospectus should be read in its entirety, as it 

provides information for potential investors to decide 

whether to invest in the Company. If you have any 

questions about the desirability of, or procedure 

for, investing in the Company, please contact your 

stockbroker, accountant or independent advisor. 


21

22 

Summary 

4 - Independent Geological Report 


Report Prepared For 

General Mining Corporation 

by 

Exploration Alliance Ltd 

October 2009 

3rd Floor, Geneva Place, 

Waterfront Drive, Tortola, 

British Virgin Islands 

Chunk of halite from Shuuden Uul halite deposit in Mongolia

Executive summary 

Golden Cross LLC (GCC) is a wholly owned 

subsidiary of General Mining Corporation 

(Australia) (GMM) with ten exploration 

licences and one exploration licence 

application in northwestern Mongolia, 

totalling 3800 square kilometres. 

The licences and applications form two 

main exploration areas; Uvs Basin and 

Khangai Fault Projects. GCC have only 

recently acquired or applied for the above 

licences, therefore have not performed any 

exploration on the licences to date, with 

the exception of a brief field visit and data 

review. 

The majority of GCC’s licences and 

applications are situated on or proximal 

to the Mongol-Okhotsk Zone, a regional 

scale suture zone formed as a result of 

closure of the Tethys Ocean during the 

Late Paleozoic to Early Mesozoic. Mesozoic 

intrusions along the 200 kilometre wide, 

3000 kilometre long Mongol-Okhotsk 

Zone are recognised as hosting mafic and 

ultramafic copper-nickel-PGE deposits as 

well as copper porphyry deposits. Several 

deposits of this type are already recognised 

in Russia, with western Mongolia remaining 

relatively under-explored for these styles of 

mineralisation. 

The Uvs Basin Project contains six 

exploration licences and applications 

hosting evaporite deposits in the northeast, 

with coal beds and orthomagmatic coppernickel 

potential in the west. Evaporite 

deposits of the Uvs Basin form GCC’s 

principal exploration target, with the 

potential for four major deposit types: 

bedded Devonian potash, lithium and 

potassium brines in near surface or 

groundwater brines, near surface bedded 

soda ash and near surface bedded borax. 

Historic data indicates economic grades of 

near surface potash deposits (for example 

1.8 metres at 39% KCl, Tuz Tag salt deposit) 

hosted in Devonian evaporite deposits. 

These are overlain by a sub-recent to 

Recent evaporite basin with excellent 

climatic pre-conditions for the deposition 

of potash salts and soda ash. 

The Khangai Fault projects are located on 

the Mongol-Okhotsk Zone, where several 

copper, copper-nickel and polymetallic 

mineral occurrences are recognised, 

associated with basic (gabbroic) intrusions. 

Historic exploration resulted in the 

discovery of the Oyut Tolgoi coppernickel 

prospect located proximal to, but 

outside of, the Khangai Project exploration 

licences. The Khangai Fault projects are 

also considered prospective for copper 

porphyry style mineralisation. 

GCC hold a significant exploration package, 

which is considered highly prospective 

for potash and lithium-potassium brines 

in the Uvs Nuur saline basin. Due to its 

remote location, this area remains severely 

under explored yet the saline basin and 

existing Devonian saliferous deposits 

indicate there is excellent potential for a 

number of deposit types to be discovered. 

Additionally, the climatic framework of the 

area is suitable for solar evaporation and 

cold crystallisation benefication techniques 

in any future potash mining operations. 

GCC’s licences are also considered 

prospective for metalliferous deposits, 

especially copper and nickel. Again, this 

region remains significantly under-explored 

using modern exploration techniques yet 

the regional Mongol-Okhotsk suture is 

known to host economic metal deposits 

along strike in Russia. Therefore, a well 

structured and focussed exploration 

strategy will be essential in order to explore 

the large area, varied geology and wide 

range of deposit types sufficiently and costeffectively. 


23

24 

4 - Independent Geological Report - Mongolia 


Table of Contents page 

1.0 INTRODUCTION AND TERMS OF REFERENCE 24 

2.0 GEOTECTONIC SETTING AND REGIONAL GEOLOGY 26 

3.0 DEPOSIT TYPES 27 

4.0 UVS NUUR BASIN PROJECT 30 

5.0 KHANGAI FAULT PROJECT 36 

6.0 CONCLUSION 38 

7.0 RECOMMENDATIONS 38 

8.0 REFERENCES 39 

LIST OF TABLES 

Table 1Σ: Buiit Project licence details and mineral occurrence data 26 

Table 2Σ: Khangai Fault Project licence details and mineral occurrence data 37 

LIST OF FIGURES 

Figure 1: Map of Mongolia showing location of GCC licence blocks 26 

Figure 2: Terrane map of northwestern Mongolia 27 

Figure 3: Evaporite Deposit Model 28 

Figure 4: Uvs Nuur Basin licences and DEM 31 

Figure 5: Schematic cross section, Uvs Nuur Basin 32 

1.0 INTRODUCTION AND TERMS OF 

REFERENCE 

Exploration Alliance Limited (EAL) were requested 

to review and assess the metalliferous exploration 

potential of exploration assets held by Golden Cross 

LLC (GCC), a wholly owned subsidiary of General 

Mining Corporation Limited (GMM). GCC has 

been granted ten exploration licences and has one 

exploration licence application pending approval. 

EAL conducted a site visit of the Uvs Basin 

(Khondlon area only) and Khangai Fault projects in 

October 2008. EAL understand that this report may 

be included as part of a document issued in support 

of a listing of GMM on the Australian Securities 

Exchange. 

1.1 SOURCES OF INFORMATION 

Data including geological maps and satellite imagery 

was sourced from an existing report prepared for 

GCC by an independent consultant (Sanjsuren, 2008). 

Further information was derived from a site visit 

conducted by EAL in October 2008 and discussion 

with local geologists. Information and opinions 

regarding the evaporite mineral potential of the Uvs 

Basin area is derived from an independent technical 

report commissioned by GCC and prepared by 

ERCOSPLAN Ingenieurgesellschaft Geotechnik und 

Bergbau mbH (ERCOSPLAN) (Rauche et al., 2009).

1.2 SCOPE OF WORK 

EAL were requested to report on the exploration 

potential of licences held by, and under application 

by, GCC, and to provide an independent technical 

review of the projects. EAL were also requested to 

review and summarise the results of Rauche et al., 2009 

with regards to evaporite mineral potential. 

1.3 QUALIFICATIONS OF CONSULTANTS 

The information in this report that relates to 

Exploration Results (excluding evaporite mineral 

potential) is based on information compiled by 

Mr. Andrew Tunningley, who is a Member of The 

Australasian Institute of Mining and Metallurgy. 

Mr. Andrew Tunningley is employed as a Principal 

Exploration Geologist by EAL, a geological 

consultancy providing a wide range of independent 

exploration services. 

Mr. Andrew Tunningley 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. 

Andrew Tunningley consents to the inclusion in the 

report of the matters based on his information in the 

form and context in which it appears. 

Neither EAL nor it’s employees involved in the 

preparation of this report have any beneficial interest 

in GCC. 

EAL will be paid a fee for this work in accordance with 

normal professional consulting practice. 

1.4 RELIANCE ON OTHER EXPERTS 

A report prepared by Geo-Info, Ulaanbaatar, Mongolia 

(Sanjsuren, 2008) provided a compilation of historic 

data on the licences and licence applications. EAL 

visited selected targets taken from Sanjsuren, 2008. 

A technical report was prepared by Rauche et al., 

2009 on behalf of GCC in relation to the evaporite 

potential of the Uvs Basin evaporite projects. Dr. 

Rauche has consented to the use and citation of 

his report in section 4.0 Uvs Basin Projects, as the 

author does not have the requisite experience to 

report on such deposits independently. 

1.5 PROPERTY DESCRIPTION AND 

LOCATION 

GCC’s licences form two main exploration areas; 

Uvs Basin and Khangai Fault projects, totalling 3800 

square kilometres in northern and northwestern 

Mongolia (Figure 1). 

The Uvs Basin project is located in far northwestern 

Mongolia and is divided into two areas; Buiit in 

the east and Khondlon in the west. Buiit is located 

adjacent to Uvs Lake and is prospective for evaporite 

mineral deposits, including potash, soda ash and 

lithium and is currently considered to be GCC’s 

highest priority exploration project. Khondlon is 

prospective for stratiform sylvite in the north and 

copper-nickel orthomagmatic deposits in the south. 

The Khangai Fault projects are prospective 

for orthomagmatic copper-nickel deposits 

associated with gabbroic intrusions, porphyry 

copper and polymetallic base metal, gold and/ 

or silver mineralisation. These licences are located 

intermittently over a strike length of 430 kilometres 

in northwestern and northern Mongolia. 

1.6 WORK CONDUCTED BY GCC 

GCC contracted Geo-Info, a Mongolian based 

consultancy, to prepare a data review of all properties. 

This included translation of historic reports and 

acquisition of geological maps and satellite imagery. 

GCC have conducted a brief field visit to Khondlon 

and the Khangai Fault Projects. No exploration, 

for example sustained grass-roots reconnaissance, 

geophysical surveys, trenching or drilling has been 

completed at any of the projects by GCC to date. GCC 

contracted ERCOSPLAN to prepare an independent 

technical report of the evaporite mineral potential of 

the Uvs Basin Project in 2009. 


25

26 


2.0 GEOTECTONIC SETTING AND 

REGIONAL GEOLOGY 

Mongolia is situated at the margin of two cratonal 

blocks; the North China Platform to the south 

and the Siberian Craton to the north. The region 

has experienced major terrain accretion events 

throughout the Paleozoic, with subsequent postcollisional 

extension giving rise in the Paleozoic 

to extensive bi-modal volcanism and associated 

intrusion of felsic, calc-alkaline plutons and stocks 

(Cunningham, 2007 and Parfenov et al., 2007). 

Carboniferous sedimentary deposits are known to 

be coal bearing and occur in the south Gobi and 

northwestern Mongolia, with the northwestern coal 

basin extending north into Russia (Sanjsuren, 2008). 

The geology of northwestern Mongolia is dominated 

by events related to the closure of the Tethys Ocean 

during the Late Paleozoic to Early Mesozoic (Parfenov 

et al., 2007) (Figure 2). The resulting suture zone, 

the Mongol-Okhotsk Zone (MOZ), strikes eastnortheast 

over approximately 3000 kilometres and 

45 ° 50 ° 

= 

Khuden Khuden (Coal) (Coal) 

(Coal) 

Bayan-Olgii 

90 ° 95 ° 

90 ° 

UVS UVS UVS UVS NUUR NUUR NUUR NUUR NUUR NUUR NUUR NUUR NUUR BASIN BASIN PROJECTS 

PROJECTS 

Ulaangom 

Uvs 

Khovd 

Zavkhan 

Khovsgol 

KHANGAI KHANGAI KHANGAI KHANGAI KHANGAI KHANGAI KHANGAI FAULT FAULT PROJECTS 

PROJECTS 

Uliastai 

Arkhangai 

Govi-Altai 

95 ° 

Mine/Major deposit (Commodity) 

Town 

Capital 

Bayankhongor 

Nariin Nariin Nariin Nariin Nariin Nariin Sukhait Sukhait Sukhait Sukhait Sukhait Sukhait Sukhait Sukhait Sukhait Sukhait (Coal) (Coal) (Coal) (Coal) (Coal) (Coal) 

(Coal) (Coal) (Coal) (Coal) 

Moron Bulgan 

Erdenet Erdenet Erdenet (Cu) 

(Cu) 

Ovorkhangai 

M O N G O L I A 

Lake 

100 ° 

100 ° 

Railroad 

GCC Licence/Application 

Tavan Tavan Tavan Tavan Tolgoi Tolgoi Tolgoi Tolgoi (Coal) 

(Coal) 

Omnigov 

is recognised as being over 200 kilometres wide 

(Koval, 1999). Units are down faulted to the north 

and the MOZ is inferred as having a sinistral strikeslip 

component. Numerous mafic and ultramafic 

hosted copper-nickel-PGE deposits and prospects 

and copper bearing porphyry deposits and prospects 

occur along the length of the MOZ, with the majority 

of known deposits occurring in Russia. Such deposits 

are typically spatially and temporally associated with 

Mesozoic intrusions (Parfenov et al., 2007). 

During the Cenozoic, Mongolia experienced an 

extended period of quiescence and the development 

of a large erosion surface (Cunningham, 2007). 

Cenozoic sedimentary deposits are common across 

Mongolia and fill basin-and-range physiography 

typical of the region. 

105 ° 

Irkutsk 

R U S S I A 

Selenge 

= 

ULAANBAATAR 

ULAANBAATAR 

Tov 

Boroo Boroo Boroo (Au) 

(Au) 

Dundgov 

Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Suvarga Suvarga Suvarga Suvarga Suvarga (Cu) (Cu) (Cu) (Cu) (Cu) (Cu) 

(Cu) (Cu) (Cu) (Cu) 

Dornogov 

(Cu) 

105 ° 

110 ° 

Oyu Oyu Tolgoi Tolgoi Tolgoi Tolgoi Tolgoi Tolgoi (Cu-Au) 

(Cu-Au) 

Khentii 

110 ° 

Chita 

Dornod 

Sukhbaatar 

115 ° 120 ° 

C H I N A 

115 ° 120 ° 

% 

0 500 km 

Figure 1: Location of GCC licences and applications, Mongolia 

50 ° 

45 °

Khuden Khuden (Coal) (Coal) (Coal) (Coal) (Coal) (Coal) (Coal) 

(Coal) 

C H I N A 

Terranes 

A A A A A A A A A A A A A A A A A A A A A A A A A l l l l l l l l l l l l l l l l l l l l l t t t t t t t t t t t t t t t t t t t t t a a a a a a a a a a a a a a a a a a a a a i i i i i i i i i i i i i i i i i i i i i M M M M M M M M M M M M M M M M M M M M M M M o o o o o o o o o o o o o o o o o o o o o u u u u u u u u u u u u u u u u u u u u u n n n n n n n n n n n n n n n n n n n n n t t t t t t t t t t t t t t t t t t t t t a a a a a a a a a a a a a a a a a a a a a i i i i i i i i i i i i i i i i i i i i i n n n n n n n n n n n n n n n n n n n n n ss 

s ss 

s ss 

s s ss 

ss 

s ss 

s s ss 

s ss 

s 

3.0 DEPOSIT TYPES 

UVS UVS UVS UVS UVS NUUR NUUR BASIN BASIN PROJECTS 

PROJECTS 

PROJECTS 

PROJECTS 

PROJECTS 

PROJECTS 

2 

1 

Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Tsagaan Shiveet Shiveet Shiveet Shiveet Shiveet Shiveet Shiveet Shiveet Shiveet Shiveet Shiveet Shiveet Shiveet Shiveet Shiveet Shiveet Shiveet Shiveet Shiveet Shiveet Shiveet Shiveet Shiveet Shiveet Shiveet Fault Fault Fault Fault Fault Fault Fault Fault Fault Fault Fault Fault Fault Fault Fault Fault Fault Fault Fault Fault Fault Fault Fault Fault Fault 

GCC’s licences have the potential to host a range 

of metalliferous hydrothermal and orthomagmatic 

deposits as well as coal, potash and soda ash. The 

main targets for exploration in the Khondlon and 

Buiit licences are potash and soda ash in a large 

Cretaceous sedimentary basin, with the remainder 

of licences being prospective for orthomagmatic 

nickel-copper-(PGE) and porphyry copper- 

(gold) deposits spatially related to the MOZ. 

3.1 POTASH DEPOSITS 

Potash deposits occur in almost all geological systems 

and are most commonly found in rocks of Devonian, 

Carbonifeorus, Permian, Cretaceous and Tertiary 

age. Although distributed globally, the majority of 

economic potash deposits are located in the northern 

hemisphere. The following is summarised from 

Rauche et al., 2009. 

The majority of potash deposits are of marine origin, 

where bodies of seawater become isolated by tectonic 

activity and/or sea level changes. Such isolated 

bodies become concentrated through evaporation 

with eventual salt crystallisation. The least soluble 

3 

4 

5 

6 

Mongol-Okhtosk Mongol-Okhtosk Mongol-Okhtosk Mongol-Okhtosk Mongol-Okhtosk Mongol-Okhtosk Mongol-Okhtosk Mongol-Okhtosk Mongol-Okhtosk Mongol-Okhtosk Mongol-Okhtosk Mongol-Okhtosk Mongol-Okhtosk Mongol-Okhtosk Mongol-Okhtosk Mongol-Okhtosk Mongol-Okhtosk Mongol-Okhtosk Mongol-Okhtosk Mongol-Okhtosk Mongol-Okhtosk Zone 

Zone 

Zone 

Zone 

Zone 

8 

7 

KHANGAI KHANGAI FAULT FAULT PROJECTS 

PROJECTS 

Cenozoic Alluvial Basin 

Metamorphic Rocks 8 

Permian-Triassic Volcanic Belt 

Cratonal Block 9 

Devonian Turbidite Sequence 1 Hovd 

Cambrian Shelf Carbonate Rocks 2 Tsagaan Shiveet 

Island Arc 

3 Lake 

Backarc/ Forearc Basin 

4 Uvs Cenozoic Basin 

Accretionary Wedge 

5 Agardag 

Passive Continental Margin 6 Zavkhan 

Ophiolite 

7 Sangelin 

9 

H H a a a a a a a a n n n n g g g g a a a a y y y y M M o o o o o o o o o o o o u u u u n n n n t t t t t t a a a a i i n n n n ss 

ss 

s s 

Selenge 

Hovsgul 

Erdenet Erdenet (Cu) (Cu) (Cu) (Cu) (Cu) (Cu) 

(Cu) (Cu) 

R U S S I A 

Legend 

Mine 

GCC Licence Block 

0 250 km 

Boroo Boroo Boroo Boroo Boroo Boroo (Au) 

(Au) (Au) 

K K h h e e e e e e n n t t i i i i 

M M M M M M M M M M M M M M M o o o o o o o o o o u u u n n n t t a a a i i n n n s s 

Figure 2: Terranes and major structural lineaments, northwestern Mongolia. 

Numbers in legend indicate terrane name (modified from Badarch, 2002) 

% 

compounds are deposited first through sedimentation, 

with the most soluble compounds being the last. A 

complete evaporation/salt deposition cycle begins 

with basic carbonates (limestone, dolomite, and 

sometimes magnesite), followed by sulfates (gypsum 

and anhydrite), rock salt, and finally potassium and 

magnesium salts. Intermediate layers of clay are 

deposited by repeated influxes of fresh water, which 

can lead to partial redissolution of the salt deposits. 

Eolian transportation of fine grained clastics into the 

basin can occur. This process can occur several times 

in a basin, resulting in repeated evaporation cycles. 

Potash deposits are also known to form in saline 

lake environments in graben/rift zones (Figure 3 next 

page). Hydrothermal brines are a major source and 

controlling factor in such environments, however 

“cold” conditions, assuming an equivalent mineral 

source and intensive fluid circulation, can also provide 

suitable environments for potash deposition. 


27

28 


Figure 3: Schematic diagrams illustrating the 

environments for potash deposition in 

a) saline lakes 

and 

b) isolated bodies of seawater. 

Due to the relatively low mechanical strength of 

evaporites, the whole salt sequences are subject to 

intensive deformation of originally horizontal strata. 

Furthermore, salt migration and upward movement, 

driven by the inverse density contrast between 

the salt bodies and their carbonatic and/or clastic 

overburden, forms salt domes (diapirs). As a result of 

these vertical movements, salt deposits often come 

into contact with groundwater and are partially or 

completely redissolved. 

Brines from natural lakes and pore fluids from 

sub-recent/recent evaporite basins are known 

as resources for sodium chloride and sodium 

carbonate. Such brines are seldom used as a source 

for potassium and magnesium salts. In sub-recent 

and recent shallow evaporite basins, the source of 

potash is the remaining saturated brines enriched in 

potassium and magnesium, which occur (i) in the 

lakes at the surface or (ii) in the pore cavity of the 

young evaporites. 

Examples of producing operations are given below: 

• Dead Sea Works, Israel: with a concentrated brine 

containing about 30% solved salt and a potassium 

chloride content of 1.25% equalling 15g/l and a total 

annual production of 1.96 million tonnes K O per 2 

year (2003) based on solar evaporated Carnallite 

• Great Salt Lake, Utah, USA: with a concentrated 

brine containing about 27% solved salt and a 

potassium content of 0.7% as well as a significant 

sulphate concentration, reserves are estimated at 168 

million tonnes KCl 

• Salar de Atacama, Chile: extracting brine with 

15g to 44g potassium per litre and having a capacity 

of about 0.5 million tonnes K O per year. The brine 

2 

of Salar de Atacama has extremely high lithium 

contents (0.15%) which makes Salar de Atacama 

one of the biggest and richest lithium deposits in 

the world. 

Two types of potassium salts are recognised as 

being economically important; potassium chloride 

and potassium sulphate. Potassium chloride (KCl) 

occurs as Sylvite, an opalescent or milky white 

mineral often occurring with halite and other salt 

minerals. Potassium chloride also forms a double salt 

called Carnallite when combined with magnesium 

chloride. Potassium sulphate (K SO ) forms Arcanite 

2 4 

and commonly occurs as a double salt combined 

with calcium, magnesium and/or sodium. 

Common extraction techniques include conventional 

underground mining methods (room and pillar 

for subhorizontal bodies or cut and fill stoping for 

sub-vertical bodies) and solution mining, which 

is typically applied to deep sylvite and rock salt 

deposits where conventional underground mining 

techniques are prohibitively expensive. Solution 

mining consists of the in-situ dissolving of solid rock 

salt or sylvite and forcing the resultant solution to 

surface for processing. Solution mining does not

equire the construction of a shaft, therefore mining 

costs are significantly reduced. 

Potash ore can be processed by flotation, hot 

leaching, electrostatic separation, solar evaporation 

and cold crystallisation. Due to the high energy 

demands of flotation, hot leaching and electrostatic 

separation, solar evaporation and cold crystallisation 

are the preferred processing methods. However 

this is strongly dependant on local climate. Solar 

evaporation and cold crystallisation are both possible 

in the Uvs Basin area and are discussed below. 

Solar evaporation involves holding brines in surface 

ponds, where evaporation either increases the 

concentration of the brine or produces a crystal crop 

of Sylvite and Carnallite. Impurities such as Halite 

also form during this process. The surface pond is 

dredged and the resulting slurry is pumped to a 

processing plant, where Carnallite is decomposed 

with water or a solution of low MgCl concentration 

2 

dissolving magnesium chloride and leaving a mixture 

of potassium and sodium chloride. The process is 

carried out at temperatures of about 25°C. A first 

screening of the Carnallite-Halite mixture is done at 

+20 and -50 mesh. The fractions are then converted 

into 20 to 50 mesh KCl. The coarser and finer salt is 

then separated. The pure, sufficiently sized potash 

crystals can immediately be sold. The Carnallite of 

the 20 to 50 mesh can either be further processed by 

hot leaching or ground to smaller size. 

Cold crystallisation of potassium chloride can be 

applied to brines extracted by solution mining. 

Usually, such brines contain KCl and NaCl, because 

both are components of the potash deposit. Under 

the relatively warm environment of the deposit (15 up 

to 40°C), both components are solved because their 

solubilities are +/- equal in this temperature interval. 

For separation of solid KCl, the cold crystallization 

technique utilizes the different solubilities of KCl and 

NaCl in cold brines. During the winter season the 

solution mining brine is pumped into cooling ponds 

where the brine cools down and KCl crystallizes. As 

with solar evaporation, the crystal mush is harvested 

and KCl is washed from the adhered NaCl brine. 

3.2 PORPHYRY COPPER-(GOLD) DEPOSITS 

Porphyry copper deposits are the world’s largest 

source of copper and molybdenum, with significant 

by-products such as gold, silver, tin and rare earth 

metals. Metal grades are variable, but if present tend 

to range between 0.2 % and 1 % copper, 0.07% to 0.3 

% molybdenum and 0.4 g/t 

gold are considered gold rich (Sillitoe, 1993), where 

some deposits, for example Grasberg, contain grades 

greater than 1 g/t gold. Porphyry copper deposits 

range in size from tens of millions to billions of 

tonnes (Richards, 2003 and Sinclair, 2007). 

Porphyry copper deposits form in continental 

and island arc settings located at destructive plate 

margins. The location of porphyry deposits within 

these settings is controlled by deep seated arcparallel 

structures and their interaction with transfer 

or arc normal faults. Where these two fault trends 

intersect dilation provides a conduit for rising 

magmas and the formation of large batholiths, above 

which structurally controlled felsic to intermediate, 

calc-alkaline porphyritic stocks and plutons form 

with multiple intrusive phases, providing a suitable 

environment for the formation of porphyry copper 

deposits. Overlying stratovolcanoes are also believed 

to play a role in the formation of porphyry copper 

deposits, however this is still under debate (Richards, 

2003 and Sillitoe, 1993). Although porphyry copper 

deposits occur from the Archaean through to Recent, 

the majority are dated in the Mesozoic to Cenozoic. 

Porphyry copper deposits form large, zoned alteration 

cells which can exceed 5 kilometres in diameter 

and are still recognised as typically following the 

model produced in 1970 by Lowell and Guilbert. 

Sulphide mineralisation forms as disseminations, 

stockworks veins and breccias commonly with an 

inner chalcopyrite-bornite sulphide assemblage 

grading outwards into an outer pyrite-dominant 

sulphide assemblage. Zoned sulphide assemblages 

coincide with an inner potassic alteration zone 

grading outwards to phyllic and propylitic alteration 

assemblages. 

Upper advanced argillic alteration may also be 

observed with or without sulphide mineralisation. 

Weathering of pyrite can lead to acid rich solutions 

which leach copper from oxidised portions of an 

exposed porphyry copper deposit and transport 

dissolved copper to the water table, where secondary 

chalcocite forms as replacement of hypogene 

sulphides. As supergene mineralisation requires a 

porphyry deposit to have been exposed at surface, 

it is not present with all porphyry copper deposits. 

Some porphyry deposits may have been exposed 

and later buried by sedimentary or volcanic cover, 

thus obscuring the deposit and associated supergene 

mineralisation. 

Within Mongolia major copper porphyry deposits 

include Erdenet (1.78 billion tons at 0.62 % copper 

and 0.025 % molybdenum) (Figure 1), Oyu Tolgoi 

(1.39 billion tonnes at 1.33 % copper and 0.47 g/t 

gold), Kharmagtai and Tsagaan Suvarga. After the 

recent discovery of Oyu Tolgoi by Ivanhoe Mines 

in 2001 there has been a large exploration effort for 


29

30 


further discoveries in the Tien Shan metallogenic 

belt and less so in the northern MOZ, despite the 

presence of Erdenet and Boroo mines. 

3.3 ORTHOMAGMATIC NICKEL-COPPER 

DEPOSITS 

Nickel sulphide deposits are hosted by or spatially 

and temporally related to gabbroic and ultramafic 

intrusions and are commonly exploited for nickel as 

well as copper, iron, chrome and platinum group 

elements (PGE) as by-products. Nickel-copper rich 

deposits tend to be low in PGE and vice versa. 

GCC’s licences are believed to be prospective only 

for copper-nickel rich deposits, therefore the PGE 

rich sub-types will not be discussed. 

However, PGE may be present in the nickel-copper 

type as a potential by-product and should always be 

assayed for in an exploration program. 

Typical metal grades for nickel-copper 

orthomagmatic deposits range from 0.7 % to 3 % 

nickel with 0.2 % to 2 % copper and deposit sizes 

range from hundreds of thousands to tens of millions 

of tonnes. Sudbury, Ontario (1645 Mt) and Norilsk, 

Russia (1903 Mt) form the largest known deposits of 

this type. All nickel-copper orthomagmatic deposits 

share a relatively simple sulphide assemblage of 

pentlandite, pyrrhotite, chalcopyrite and magnetite. 

Sulphide is concentrated in mafic and ultramafic 

bodies as a primary process, as an intrusive body 

cools during ascent. Sulphide forms droplets 

which are denser than the magma and therefore 

accumulate towards the base of any intrusive body, 

either as disseminations or massive sulphide lenses 

and tabular bodies. 

It is important to recognise that GCC’s exploration 

ground does host numerous mafic and ultramafic 

intrusive bodies in proximity to large, deep seated 

conduits, for example the Khangai Fault. Additionally, 

the Oyut Tolgoi copper-nickel prospect proves that 

gabbro in this portion of the MOZ is sulphide bearing. 

Exploration for nickel-copper orthomagmatic 

deposits in GCC’s landholding should therefore focus 

on defining mafic and ultramafic intrusive bodies at 

or close to surface with geological mapping, historic 

data review and acquisition of historic aeromagnetic 

data. Once such bodies have been identified, their 

palaeodepth must be ascertained, as sulphide bodies 

occur towards the base of mafic/ultramafic bodies. 

4.0 UVS BASIN PROJECT 

4.1 PROPERTY DESCRIPTION AND 

LOCATION 

The Uvs Basin Project area comprises five exploration 

licences and one exploration licence application, 

which have been divided into two prospect areas; 

Khondlon to the west and Buiit to the east (Figure 4). 

The project is located in Uvs Province, northwestern 

Mongolia (Figure 1). Buiit is located 130 kilometres 

eastnortheast from the provincial capital Ulaangom 

and is on the eastern shores of Lake Uvs. Khondlon 

is located between 13 kilometres and 68 kilometres 

north of Ulaangom. The northern most licence 

boundary of the Khondlon area lies approximately 

10 kilometres to 20 kilometres south of the Russian 

border. 

The licences and applications are considered prospective 

for both Devonian and sub-recent to recent 

evaporite deposits and lithium ± potassium brines, 

whereas licence 14404 is prospective for coal in the 

north and orthomagmatic nickel-copper in the south. 

4.2 ACCESSIBILITY, CLIMATE, LOCAL 

RESOURCES, INFRASTRUCTURE AND 

PHYSIOGRAPHY 

Access is via asphalt road from Ulaangom, 

the capital of Uvs Province, approximately 1120 

kilometres westnorthwest from Ulaanbaatar. Parallel 

to the road from Ulaangom is a high voltage 

powerline supplied by Russia. Ulaangom provides 

hotel accommodation, basic field supplies such as 

fuel and a domestic airstrip. The area is subject to 

a boreal steppe climate and has the lowest annual 

precipitation at 50°N Latitude of 140 mm per year 

(Rauche et al., 2009). Boreal desert climate (annual 

precipitation

Licence Details Mineral Occurrence Data 

Name Area 

(Hectares) 

Application Granted No. Name Commodity Longitude Latitude 

14404 97,240 Granted III-8-186 Cu 91.833 50.522 

III-8-187 Cu 91.849 50.508 

VI-8-181 Pb 91.783 50.454 

Khondlon 

Adraga 

Cu 91.831 50.17 

Khondlon Adraga 

Uul 

Cu 91.867 50.15 

13848X 14,200 Granted No mineral occurrences recorded 

13849X 4,242 Granted No mineral occurrences recorded 

14215 46,050 Granted No mineral occurrences recorded 


24245 20,760 Application No mineral occurrences recorded 

now a UNESCO World Heritage Site. Lake Uvs is 

situated in a continental depression known as the 

Uvs Basin which has dimensions of 580 kilometres by 

180 kilometres. Lake Uvs measures 84 kilometres by 

79 kilometres with an average depth of 11.9 metres 

and a maximum depth of 20 metres. The lake has 

51 ° 

50 ° 50.5 ° 

91.5 ° 92 ° 92.5 ° 

R R U U S S S S I I A 

A 

Khondlon Adraga 

Altash 

Zestin Shil 

Huden 

III-8-186 

III-8-187 

VI-8-181 

Barun Tserit 

14404 

24245 

13848X 

KHONDLON AREA 

Khondlon Adraga Uul 

Ulaangom 

13849X 

Davst 

91.5 ° 92 ° 92.5 ° 

Torgalyk 

Shuuden Uul 

15051 

Table 1: GCC licence details and mineral occurrence data, Uvs Basin Project. 

Tuz Tag 

no outlets and is considered to be of fundamental 

importance to the recharge of groundwater in the 

region. 

93 ° 93.5 ° 94 ° 

93 ° 

Davsan 

BUIIT AREA 

M M O O N N G G O O L L I I A 

A 

93.5 ° 94 ° 

Figure 4: GCC licences and mineral occurrences within the Uvs Nuur Basin with Digital 

Elevation Model. Cold colours represent low elevation, warm colours represent high elevation. 

Note high voltage powerline runs parallel to asphalt road. 

14215 

Buiit 

51 ° 

50.5 ° 

50 ° 

Mineral Occurrence 

Legend 

Coal 

Copper 

Lead 

Evaporite 

GCC Granted Licence 

Road 

International Border 

Boundary of Uuvs Basin 

0 35 km 


31

32 


4.3 HISTORY 

Soviet exploration work conducted between 1923 

and 1925 discovered the Tuz Tag salt deposit (Figure 

4), with various regional exploration programs 

conducted through to the 1970s. This included 

regional scale mapping and tectonic/structural 

interpretations and drilling at the Tuz Tag salt 

deposit. These exploration works also identified the 

Torgalyk, Shuuden Uul and Davsan halite deposits 

and the Barun Tserin gypsum deposit (Figure 4). 

The first documented exploration in the Khondlon 

area was in 1971, which led to the discovery and 

exploration of the Huden coal deposit, situated 

immediately north of licence 14404. Work at Huden, 

including geological mapping at 1:10,000 scale, 

trenching and diamond drilling, defined six hard 

coal bearing layers. A small test pit was excavated, 

but no large scale mining was conducted. Coal grade 

is not known. 

1:500,000 scale mapping in the late 1970s also 

identified low grade copper in fault hosted quartz 

veins at the Khondlon Adraga copper occurrence 

in licence 14404. Two trenches were excavated 

(137m3 ) and 24 channel samples collected. Further 

regional mapping programmes at various scales 

were conducted by Russian researchers during the 

1990s. 

4.4 WORK CONDUCTED BY GOLDEN 

CROSS 

GCC completed a brief site visit to the Uvs Basin 

exploration block to assess the coal prospectivity 

of the licence in 2008. In 2009 GCC collected grab 

samples from the Shuuden Uul halite deposit as well 

as water samples from beneath the ice on Lake Uvs 

and in water wells. Samples were submitted to SGS, 

Ulaanbaatar and results are detailed in Rauche et al., 

2009. Considerable potassium content was found 

in lake sediments with GCC sampling detecting up 

to 2.2% potassium (K+) within sediments of Lake 

Uvs. This might reflect remobilised minerals from the 

outcropping evaporite beds at the northern edge of 

the basin, as the potassium content of surface brines 

has been proven as low. 

4.5 LOCAL GEOLOGY 

The Khondlon area is located in the Lake island 

arc terrane, with the Tsagaan Shiveet metamorphic 

terrane to the west and a large Cenozoic sedimentary 

basin (Uvs basin) immediately east (Figure 2). 

Outcrop in the licences is sparse, limited to small 

hills in the north and south. 

Outcrop to the south of licence 14404 comprises 

a gabbro stock approximately 4 kilometres by 1 

kilometre, striking northeast. This Gabbro is mediumto 

coarse-grained, weakly serpentinised with weak 

magnetite and trace, disseminated, fine-grained 

pyrite. The Gabbro has intruded a bedded, shallowly 

north dipping limestone unit with rare marl beds. 

Outcrop to the north comprises a folded sequence 

of Carboniferous bedded sandstone, siltstone and 

carbonaceous units. These units have been folded 

to form a shallowly north plunging syncline and are 

offset by localised normal faults as a result of postcompressional 

extension. 

The lithologic succession of the Middle Devonian 

in the Khondlon area starts with the multicoloured, 

partially saliferous Tserd Uul suite. It consists of 

a sequence of calcareous argillite, silty schist, 

sandstone, silty sandstone, siltstone, limestone, 

dolomite and rare gravellite, conglomerate, porphyry 

horizons, tuffs and tuffite. 

These sediments contain lenses and layers of 

anhydrite/gypsum, rock salt and potassium bearing 

salt rocks. 

Geochemically, the lower Middle Devonian is 

characterised by relatively high contents of boron 

and copper and lower contents of titanium and 

manganese. It is dated to the Upper Eifelian 

(lower saliferous layer) and the Lower Givetian 

(upper terrigenous layer). Above these layers lies 

a succession of usually grey-coloured sandstone to 

siltstone with intercalated conglomerate, limestone, 

dolomite and rare gravellite, which belongs to the 

Middle Devonian Hushut Uul suite. This sequence is 

overlain by the Middle to Upper Devonian Borshon 

Gol suite, consisting of sandstone, siltstone, tuff and 

calcareous sedimentary rocks. 

The deposition of evaporites in the Middle Devonian 

was related with the closure of the Okhostk Ocean. 

As a whole, these deposits were formed under 

conditions of a marine basin covering not only the 

considered area, but also the area of the modern 

Minusinsk Basin at the time of their deposition. 

The Buiit licences are underlain by a greenschist 

basement and Middle to Upper Cambrian, Ordovician 

and Silurian marine sedimentary units. These units 

are overlain by saliferous Devonian marine deposits 

composed of conglomerate, sandstone, siltstone, 

dolomite, limestone and rare volcanic tuff and 

extrusive porphyry. 

Devonian sedimentary units contain lenticular 

deposits of rock salt and gypsum, which are partially 

exposed in the northern portion of the Uvs Basin 

and are believed to have formed in a sequence up 

to 600 metres thick (Rauche et al., 2009). All units 

are overlain by Cenozoic sedimentary cover in a 

recent evaporite basin, which is a potential host to 

potash and soda ash deposits. Cenozoic cover is also 

extensive throughout the Khondlon licence block.

Figure 5: Schematic Depositional 

and Process Model of the Uvs Basin. 

Thickness of lake sediments and amount 

of diapirism in the Central Basin is 

unknown, hence hypothetical only. 

Geological Cross Section based on 

Geological Map of the USSR (1964). 

Figure 6: Alteration zone on GMM licence 14404 


33

34 


4.6 EVAPORITE MINERALISATION 

The licences and applications of the Uvs Basin project 

(Figure 4) are considered prospective for evaporite 

deposits of sylvite, borax, lithium ± potassium 

brines and soda ash. The licences are considered 

most prospective for potash due to the presence of 

a middle Devonian evaporite sequence containing 

sylvite (potash). The presence of sylvite within the 

middle Devonian Tserd Uul suite at Tuz Tag (Russia) 

and Torgalyk (Russia) in the northern margin of the 

basin confirm that the receding waters of the basin 

reached the stage of sylvite settling. 

GCC’s licences are located to the south of Tuz Tag 

and Torgalyk, where the middle Devonian Tserd 

Uul suite outcrops or is interpreted to lie under 

sedimentary cover. 

The information presented herein relating to the 

evaporite deposits has been summarised from 

Rauche et al., 2009. 

4.6.1 Khondlon Licences 

The Khondlon licences are considered prospective 

for stratiform evaporite deposits of Devonian age in 

the form of anticline/ dome-like strucures, where salt 

rocks have accumulated due to density contrasts and 

natural brines from surface lakes (Lake Uvs) and/ 

or pore brines from recent evaporite deposits. Solid 

potash deposits are exposed in the northern Uvs 

Basin in an evaporite sequence up to 600 metres 

thick (see 4.6.3 Adjacent Properties) therefore 

indicating good potential for solid evaporite ores in 

the Khondlon licences. 

Outcrops of the Middle Devonian Tserd Uul suite, 

host to the evaporite mineralisation elsewhere in 

the basin, occur on licence 14404. These outcrops 

extend for approximately 10 kilometres within 

the licence at the base of an uplifted block in the 

northern section of the licence. At the western edge 

of this outcrop lies the Barun Tserit gypsum deposit. 

Another outcrop occurs in the northeastern area of 

the licence. The presence of these outcrops indicate 

that evaporite mineralisation may be found relatively 

close to surface. 

In the eastern licences (13848 and 13849) and 

applications, no evaporite mineralisation is observed. 

However, extensive outcrops of the younger middle 

Devonian Hushuut Uul suite are interpreted to 

overlie the older Tserd Uul suite, which may exist at 

reasonably shallow depths. 

4.6.2 Buiit Licences 

The Buiit licences are also considered 

prospective for stratiform evaporite deposits 

of Devonian age, including anticline/dome-like 

structures (where salt rocks have accumulated due 

to density contrasts and natural brines from surface 

lakes (Lake Uvs)) and/or pore brines from recent 

evaporite deposits. A soda ash deposit is located 

within the Buiit licences, which indicates the subrecent 

to recent nature of evaporite deposition in 

the area. 

Therefore, both Devonian (solid potash mineralisation) 

and recent (brine hosted) potassium and/ 

or lithium mineralisation represent valid exploration 

targets. A schematic depositional and process model 

of the Uvs Basin is shown in Figure 5. 

The Buiit soda ash deposit was discovered during 

the exploration for construction materials in 1973 

through a 65 line meter core drilling program. The 

soda ash occurs in lenses which are concentrated 

in two layers hosted in Quaternary sediments. The 

deposit occurs over an area of 3000m². The upper 

horizon is 0.1-1.5 metres thick, striking over 96 

metres and 75 metres wide. A lower horizonstrikes 

over 127 metres at 0.25 metres thick and 25 metres 

wide. The composition of “soda is sodium sulphate 

74.8% in upper horizon and 24.4% in lower horizon”. 

Uncertainties in the reported data however leave 

some questions regarding the nature of mineralisation 

and ore grade at the deposit, therefore the results of 

the above historic, unverified work should be used 

as a guide to exploration only. 

4.6.3 Adjacent Properties 

Five prospects have been explored historically in the 

Uvs Basin for their evaporite mineral potential; 

Barun Tserit (gypsum), Shuuden Uul (rock salt), 

Torgalyk (potash, sylvinite), Davsan (rock salt and 

soda ash) and Tuz Tag (potash) (Figure 4). Torgalyk 

and Tuz Tag are located within the Russian extent of 

the basin, several kilometres from the border with 

Mongolia. 

Although no resource/reserve estimates are available 

on the above deposits, important observations with 

regards to the evaporite mineral potential of the 

Uvs Basin can be drawn from the historic drill data. 

Notably, Devonian potash deposition has been 

demonstrated at the Tuz Tag salt deposit, where at 

least eleven drill holes were completed in the 1950s. 

Drilling results include 9.7 metres at 16 % KCl (hole 

7, from 59.1 metres) and 1.8 metres at 39 % KCl 

(hole 8, from 16.5 metres). Additional historic drill 

data from the Torgalyk deposit displays sylvinite

interbedded with potash salts. This data confirms 

that the lake, from which these deposits formed 

reached the phase of sedimentation of potash salts/ 

sylvite settling and these same sedimentary deposits 

are proposed to underlie GCC’s Uvs Basin licences. 

4.6.4 Suitability for Solution Mining 

According to a climate study by ERCOSPLAN 

(Rauche et al., 2009), the Uvs Basin displays excellent 

climatic pre-conditions for the solar evaporation of 

brines during the summer and cold crystallisation 

during the winter. Such conditions include an arid 

environment (annual precipitation of 140 mm); 

extreme cold weather (average temperature -3.4°C) 

with a large annual temperature amplitude; and high 

evaporation rates. In addition, solid potash ores 

may also be mined using conventional open pit or 

underground mining methods. 

4.7 METALLIC MINERALISATION IN THE 

KHONDLON LICENCES 

The southern part of licence 14404 is considered 

prospective for copper-nickel and/or chrome 

mineralisation associated with basic and ultrabasic 

rocks. A gabbro stock is observed outcropping in 

the south emplaced into limestone, over which 

two mineral occurrences (Khondlon Adraga and 

Khondlon Adraga Uul) are noted and detailed 

below, along with other mineral occurrences within 

the Khondlon area. 

Khondlon Adraga (V-8-184) Copper Occurrence 

Khondlon Adraga is located at 417455 mE, 5558305 

mN, UTM Zone 46 Northern Hemisphere. EAL 

visited the occurrence in October 2008. Outcrop 

comprises a 4 kilometre by 1 kilometre, northeast 

striking gabbroic intrusion emplaced into a bedded 

limestone and marl sequence. The outcrop forms 

positive relief in otherwise flat terrain, covered by 

flat lying Cenozoic sedimentary units. This Gabbro 

is medium- to coarse-grained, inequigranular 

and weakly magnetite altered. The gabbro has 

been weakly serpentinised and contains trace, 

disseminated, fine-grained pyrite. 

All units have been offset by two sub-parallel 

fault zones trending east-west. Two quartz veins 

have developed sub-parallel to the fault zone and 

were the focus of two hand excavated trenches 

in the 1970s. Quartz veins can be traced over 50 centimetres wide. Individual quartz veins are 

composed of white to light grey, fine-grained, 

massive quartz with disseminated cubic vugs and 

hematite pseudomorphs after pyrite. Trace malachite 

and moderate limonite-goethite as fracture fill is 

observed spatially associated with quartz veining. 

It is assumed by the author that historic work was 

targeting potential gold mineralisation hosted in 

quartz veins. Localised skarn mineralisation is also 

reported at Khondlon Adraga but was not observed 

in the field. Skarn mineralogy is not reported. 

Khondlon Adraga Uul (V-8-189) 

Copper Occurrence 

Khondlon Adraga Uul is located at 419031 mE, 

5555923 mN, UTM Zone 46 Northern Hemisphere, 

approximately 3 kilometres south-southeast 

of Khondlon Adraga. EAL have not visited the 

occurrence and the following is based on a data 

review. Outrop comprises layered andesitic volcanic 

rocks intruded by diorite. Both these units are 

intruded by granite porphyry dykes, measuring 1 to 

1.5 metres by 70 to 500 metres. Granite porphyry 

dykes contain weak, patchy, disseminated pyritechalcopyrite. 

Rare quartz veins are observed spatially 

associated with granite porphyry dykes, with 

dimensions of 0.1 to 0.2 metres by 15 to 320 metres. 

Malachite is observed as fracture fill. 

III-8-186 Copper Occurrence 

Occurrence III-8-186 is located at 418377 mE, 5595785 

mN, UTM Zone 46 Northern Hemisphere. EAL have 

not visited the occurrence and the following is based 

on a data review. The target is reported as an iron 

oxide stained breccia measuring 0.9 metres by 7 

metres. Weak malachite fracture fill is noted. 

III-8-187 Copper Occurrence 

Occurrence III-8-187 is located at 417299 mE, 5597377 

mN, UTM Zone 46 Northern Hemisphere. EAL have 

not visited the occurrence and the following is based 

on a data review. The target is reported as quartzcalcite 

veins hosted in sandstone over an area of 5 

metres by 15 metres. Iron oxides occur as fracture 

fill. 

VI-8-181 Lead Occurrence 

Occurrence VI-8-181 is located at 413630 mE, 

5589836 mN, UTM Zone 46 Northern Hemisphere. 

EAL have not visited the occurrence and the following 

is based on a data review. The target is reported as 

iron oxide staining in sandstone and conglomerate. 

4.7.1 Adjacent Properties 

The Huden coal deposit is located 1 kilometre north 

of licence 14404. The deposit was first discovered in 

1971 by Russian workers, and in 1977 an A+B+C1+C2 

resource of 9,176,000 tons of coal was calculated 

to a depth of 30 metres below surface. Further 

exploration work in 1984 and 1985 included 620.75 

metres of diamond drilling and 98 m3 of trenching. 


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36 


A small test pit has been excavated, however the 

timing of this is unknown. 

Historic exploration delineated seven coal seams

absence of roads and tracks. The western licences 

and applications border a state protected area which 

cannot be staked. 

5.3 HISTORY 

Previous work in the area comprises various 

geological mapping and geochemical sampling 

programmes conducted in the 1960s and 1970s by 

Soviet workers. The main aim of this work was 

to explore for economic base-metal and industrial 

mineral deposits, with mapping completed on a 

1:200,000 scale across the entire area. This exploration 

identified Oyut Tolgoi as a gabbro hosted copper- 

Name Area 

(Hectares) 

nickel prospect, where follow-up work included 

trenching and diamond drilling in the late 1960s. 

Exploration rights to Oyut Tolgoi currently belong 

to Camex LLC who are believed to have completed 

an unknown amount of diamond drilling at the 

property during 2007 and 2008 (Sanjsuren, p.comm). 

Bugsein Gol copper occurrence (licence 14593) was 

also discovered during this phase of work, where 

exploration included limited trenching, rockchip 

sampling and geophysical work. The results of this 

work were not made available at the time of writing. 

Licence Details Mineral Occurrence Data 

Application Granted No. Name Commodity Longitude Latitude 

13846X 22,720 Granted 5 Lamin Hudag Zn, Cu 95.151 48.944 

13847X 73,350 Granted 72 Cu, Ag, Bi 91.184 49.202 

7a Tahilt Nuur NaO 95.004 48.919 

71 Cu 95.082 49.204 

79 Huh Enger Uul Cu, Zn 95.124 49.174 

81 Cu 95.158 49.166 



14593 40,290 Granted Bugsein Gol Cu 99.771 49.233 

5.4 WORK CONDUCTED BY GOLDEN 

CROSS 

GCC have not completed any field work in the 

licence area. GCC hired a local consultancy to 

prepare a data review of the licences to determine 

prospectivity. 

5.5 LOCAL GEOLOGY 

The Khangai Fault Project straddles the east-west 

striking Khangai Fault, which is believed to form the 

westernmost extension of the regional scale MOZ. 

The Khangai Fault is downthrown to the north with 

a sinistral strike-slip movement, and forms a terrane 

boundary between the southern Zavkhan Terrane 

and the northern Sangelin Terrane (Figure 2). The 

Khangai Fault is still active, with the most recent 

movement observed in the early 1900s. 

The Zavkhan Terrane comprises three main 

components; Urgamal, Hutul and Hungui. These 

components are composed primarily of a melange 

Table 2: GCC licence details and mineral occurrence data, Khangai Fault Project 

of Late Proterozoic greenschist and amphibolite 

metamorphic facies overlain by rhyolitic and 

andesitic volcanic rocks and volcaniclastics. A 

Cambrian marine sedimentary facies, composed 

of limestone, sandstone and conglomerate is 

unconformably overlain by a Devonian to Cretaceous 

volcanosedimentary sequence. All units are intruded 

by Devonian and Permian granite plutons. 

The Sangelin Terrane comprises an Archaean- 

Proterozoic metamorphic basement overlain 

by Devonian and Permian volcanic rocks, 

intruded by Devonian and Permian granite 

stocks and plutons. All units are overlain by 

unconsolidated Quaternary basin fill sediments. 

5.6 ALTERATION AND MINERALISATION 

Thirty-two mineral occurrences identified by third 

parties are located within the Khangai Fault Project 

area (Table 2) and are detailed in Sanjsuren, 2008. 

These targets have not been visited by the author or 

GCC staff . 


37

38 


Since EAL’s initial visit GCC’s landholding in this 

area has decreased. The most significant mineral 

occurrence in the Khangai Fault project is the 

Bugsein Gol copper occurrence. 

Bugsein Gol is located at 556116 mE, 5453680 mN, 

UTM Zone 47, Northern Hemisphere within licence 

14593 (Table 2). EAL has not visited the occurrence 

and the following is based on a data review. 

The occurrence was identified in 1966 by Czech 

geologists, who conducted an electrical and induced 

polarisation survey, collected 1285 soil samples 

and completed an unknown amount of trenching 

at the target. Outcrop comprises Permian volcanosedimentary 

rocks intruded by Permian and Triassic 

quartz porphyry, granite and diorite. 

A silica-pyrite alteration zone is recognised at surface 

over 3000 metres by

As coal and/or potash represents a shorter time-line 

to potential production from any future discoveries 

compared to a porphyry or gabbro hosted deposit, 

it is recommended that initial exploration is focussed 

towards the Uvs Basin projects. Initial work would 

include, but is not limited to: 

• Historic data review; 

• Detailed geological mapping; 

• Seismic geophysical survey; 

• Topography survey; 

• Source drilling company with appropriate 

equipment for evaporite exploration. 

It is appropriate to assume that the above work will 

take the Buiit Project to a drill-ready stage, if warranted, 

by the middle to end of the next field season. As 

outcrop is poor at the Buiit Project, a stratigraphic drill 

program is advisable in order to define the depth and 

true width of Devonian evaporite bearing sequences. 

The following recommendations are intended for a 

target generation exercise through the winter months, 

where field work is limited by the weather, at the 

Khangai Fault project: 

• Prioritise commodity/commodities; 

• Prioritise targets from Sanjsuren, 2008; 

• Digitise historic geology maps and isolate 

intrusive bodies at surface; 

• Study age of intrusives compared with other 

known deposits in MOZ; 

• Acquire and register satellite imagery; 

• Acquire aeromagnetic data for the region 

(available from MRAM); 

• Structure/alteration interpretation from satellite 

imagery/aeromagnetic data and geology maps; 

• Target generation from above data 

interpretation. 

Grass-roots reconnaissance of existing targets and 

newly generated targets from the above work would 

then be required in the next field season. It is also 

recommended that geologists with the education 

and experience specific to deposit type are hired 

for in-country management of industrial mineral 

exploration and metalliferous deposit exploration, as 

these are two very different fields and require specific 

expertise and knowledge. 

8.0 REFERENCES 

Badarch, G., Cunningham, W. D. and Windley, B.F., 2002. 

A New Terrane Subdivision for Mongolia: Implications for 

the Phanerozoic Crustal Growth of Central Asia. Journal 

of Asian Earth Sciences, V21, p. 87-110. 

Cunningham, D., 2007. 

Structural and Topographic Characteristics of Restraining 

Bend Mountain Ranges of the Altai, Gobi Altai and 

Easternmost Tien Shan. In: Cunningham, W.D. and 

Mann, P., (eds): Tectonics of Strike-Slip Restraining and 

Releasing Bends. Geological Society, London, Special 

Publications, V290, p. 219-237. 

Eckstrand, O.R. and Hulbert, L.J., 2007. Magmatic nickelcopper-platinum 

group element deposits. In: W.D., ed., 

A synthesis of Major Deposit-Types, District Metallogeny, 

the evolution of Geological Provinces, and Exploration 

Methods, Geological Association of Canada, Mineral 

Deposits Division, Special Publication No.5, p.205-223. 

Koval, P.V., Grebenshchikova, V.I., Lustenberg, E.E. and 

Henney, P.J., 1999. Database of Granites in the Mongol- 

Okhotsk Zone, Mongolia-Siberia, and it’s Use in Mineral 

Exploration. Journal of Geochemical Exploration, V66, 

p.199-210. 

Lepeshkov, I., Romasheva, N. and Solovjev, V., 

1958. Potassium bearing salt deposits of Tuva. Docady 

Academy of Sciences of USSR, v.119, p.1156-1158 (in 

Russian). 

Levenko, A., 1960. Devonian of Central and South Tuva, 

Dokady Academy of Sciences of USSR, v.199, Nr 6 (in 

Russian). 

Lowell, J.D. and Gulbert, J.M., 1970. Lateral and 

Vertical Alteration-Mineralisation Zoning in Copper 

Porphyry Ore Deposits. Economic Geology, v.65, p.373-408. 

Parfenov, P.M., Badarch, G., Berzin, N.A., Hwang. 

D.H., Khanchuk, A.I., Kuzmin, M.I., Nokleberg, W.J., 

Obelenskiy, A.A., Ogasawara, M., Prokopiev, A.V., 

Rodionov, S.M., Smelov, A.P. and Yan, H., 2007. 

Introduction to Regional Geology, Metallogenesis, and 

Tectonics of Northeast Asia. U.S Geological Survey. Open- 

File Report 2007-1183-A. 

Rauche, H., Michajljow, W. and Hopf, H., 2009. 

Preliminary Evaluation of the General Potential of 

the Potash, Soda Ash and Lithium Project Uvs Nuur, 

Mongolia. Independent Technical Report. ERCOSPLAN 

Ingenieurgesellschaft Geotechnik und Bergbau mbH. 

Commissioned by Golden Cross LLC. 

Richards, J.P., 2003. Tectono-Magmatic Precursors for 

Porphyry Cu-(Mo-Au) Deposit Formation. Economic 

Geology, v.98, p.1515-1533. 

Sanjsuren, O., 2008. Geological Investigation Report 

on Exploration Licences and Exploration Licence 

Applications, West of Mongolia. Unpublished internal 

report prepared by Geo-Info. 

Sillitoe, R.H., 1993. Gold-Rich Porphyry Copper Deposits: 

Geological Model and Exploration Implications. Geological 

Association of Canada Special Paper 40, p.465-478. 

Sinclair, W.D., 2007. Porphyry Deposits. In: W.D., ed., A 

synthesis of Major Deposit-Types, District Metallogeny, 

the evolution of Geological Provinces, and Exploration 

Methods, Geological Association of Canada, Mineral 

Deposits Division, Special Publication No.5, p.205-223. 


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40 

5 - Independent Geological Report - Australia 

26 October 2009 

The Directors 

General Mining Corporation Limited 


PERTH WA 6000 

Dear Sirs, 

5 - Independent Geological Report 

Australia 

J.L. Geological Services Pty Ltd (JLGS) has been commissioned by General Mining Corporation Ltd (GMM) to 

provide an Independent Geologist’s Report on their Australian mineral exploration properties to form part of their 

lodgment with the Australian Securities and Investments Commission (ASIC). This report is to be included in a 

Prospectus for the proposed admission of GMM to the Australian Securities Exchange (ASX). 

DECLARATIONS 

Sources of Information 

This report is based on information supplied by General Mining Corporation; on published material such as books, 

journals and industry publications; on WA open-file statutory mineral exploration reports (WAMEX); on WA mines 

and mineral deposits (MINEDEX) information and on databases of airborne and ground geophysical surveys. 

Wherever available, the independent geologist has inspected and perused original data, such as assay results, 

company reports, government publications and the like. The research was largely office-based, yet the independent 

geologist also visited one of the two Kimberley projects. 

While the independent geologist has checked the status of the West Australian tenements, responsibility for tenement 

maintenance rests with GMM. 

This Report is Not a Valuation 

This Report is not a valuation and no opinion is expressed as to the value of the individual prospects, vendor or 

promoter considerations, nor to the merits of investment in General Mining Corporation. 

Limit of Own Work 

J.L. Geological Services’ Independent Geologist’s Report covers GMM’s Australian projects. It has been prepared on 

the basis of information available up to and including 26 October 2009. 

Limitation & Risk 

In preparing this report, the independent geologist has endeavoured, by making all reasonable enquiries, to confirm 

the authenticity and completeness of the technical data upon which the Independent Geologist’s Report is based. 

Several drafts of the report were also provided to GMM, along with written requests to identify any material errors 

or omissions prior to lodgment. 

Qualifications 

Dr. Janos L. Locsei, the author of this report, is the principal of J.L. Geological Services Pty. Ltd. He is a professional 

Australian geologist who obtained his PhD in geology from the University of Vienna with distinction in 1970 and 

moved to Australia the same year. For more than thirty years he has worked in Australia (Qld and WA), Fiji, Iran 

and Thailand on exploration and mining projects. His last position prior to this assignment was that of mining 

superintendent at a gold mine in northeast Thailand. Dr. Locsei obtained an MBA from Curtin University in 1999, 

and an MSc in Mineral Economics from the WA School of Mines in 2001. He is a Fellow of the Australasian Institute 

of Mining and Metallurgy. He has previously prepared, resp. contributed to, project evaluations and Independent 

Geologist’s Reports. 

Independence 

Neither J.L. Geological Services Pty. Ltd., nor any of its employees, have any direct or indirect interest in the projects 

which are the subject of this report, nor in the securities of GMM. This report has been prepared in return for 

professional fees based upon agreed commercial rates and the payment of these fees is in no way contingent on the 

results of this report or on GMM’s success in its initial public offering. 

Conformity 

This report has been prepared so as to conform to the requirements of the Australian Securities and Investment 

Commission Regulatory Guides 56 (Prospectuses) and 112 (Independence of experts). Also the guidelines of JORC 

(2004) have been observed. 

Consent 

J.L. Geological Services Pty Ltd consent to the inclusion of this report in the General Mining Corporation Prospectus, 

be it as electronic or paper media - in the form and context in which it has been prepared. 

Dr. Janos L. LOCSEI 

Geologist, FAusIMM

Table of Contents page 

1. OVERVIEW 41 

2. WEST AUSTRALIAN PROJECTS 42 

2.1 Shoemaker: E 69/1869-1871 (Iron Ore, Pb-Zn, U, Au) 42 

2.2 Eyre: E 69/2369, ELA 2616, ELA 2649 & ELA 69/2650 

(Rare Earths, Ni-Cu, Cu-Au-U) 46 

2.3 Webb: E 80/3887 and E 80/3985 (Cu-Au-U) 48 

2.4 Veevers: ELA 80/3986 (Cu-Au-U, Rare Earths) 51 

2.5 Black Hill: E 80/3663 (Silver and Base Metals) 53 

2.6 Mt. Kinahan: E 80/3662 (Manganese, Copper) 55 

3. REFERENCES 57 

4. GLOSSARY OF TECHNICAL TERMS 59 

1. OVERVIEW 

General Mining Corporation (GMM) has assembled a highly prospective mineral exploration 

portfolio comprising six West Australian projects. 

One of the GMM projects has extensive surface iron enrichment, another boasts ample outcrops of 

high-grade copper mineralization, while several more are well-defined geophysical targets at ‘readyto-drill’ 

stage. Thus GMM’s quality targets range from the tangible to the conceptual. Some begin 

right from the surface, while others are ‘blind’ targets starting at over 400m depth. 

The acquisition of the six West Australian projects is partly the result of joint venturing (Shoemaker 

Iron Project), regional prospecting (Kimberley tenements) - where outcrop and mineralization can 

be observed in the field - and partly that of conceptual considerations. For the latter approach 

works like those of Wyborn (2002) on the granites and copper-gold metallogenesis in the Australian 

Proterozoic and those of Fraser & al. (2007) on the geodynamic and metallogenic evolution of 

Proterozoic Australia were seminal. These publications from Geoscience Australia combine scientific 

research with considerations of economic potential. Such papers have supported the selection of 

the conceptual targets of the present portfolio. 


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2. WEST AUSTRALIAN PROJECTS 

Port Hedland 

Karatha 

Perth 

2.1 Shoemaker Project 

Figure 1: GMM’s WA Projects - Location Map 

Black Hill 

Mt Kinahan 

E 69/1869, 1870 & 1871 (Iron, also U, Au, and Pb-Zn) 

2.1.1 Location and Access 

The Shoemaker Iron Ore Project is located 130 km north-east of Wiluna in Western Australia within the Earaheedy 

Basin. The three granted exploration licences (ELs) cover an area of approximately 300km2 over the Shoemaker 

Impact Structure on the Nabberu 1:250:000 resp. 1:100,000 sheet areas. 

The ELs lie on Cunyu, Granite Peak and Millrose pastoral stations within the Wiluna Shire. Access is good on graded 

dirt roads (the project being just 10 km off the Canning Stock Route), but driving on apparently dry salt-lakes can 

be treacherous. 

A “Standard Heritage Agreement” has been signed by representatives of the Ngaanyatjarra Council in 2005 which 

requires a heritage survey to be conducted prior to ground-disturbing exploration activities. This project is the only 

one not 100% owned by GMM. Tenement searches show that all three ELs are “authorized for iron”. 

Veevers 

Webb 

Shoemaker 

Eyre

2.1.2 Exploration History 

Limited data exist on the iron ore potential of the 

Shoemaker Iron Ore Project, which has been 

subject only to sporadic prior exploration and 

no drilling at all for iron ore. Amax Exploration 

(Australia) Inc. conducted regional sampling of the 

Frere Formation in the 1970’s, including a few spots 

at the north-western rim of the Shoemaker structure. 

Rock samples returned assays of between 56% 

and 69.6% Fe with low phosphorus content (0.02 

to 0.04%). One of the steeply dipping hematitegoethite 

outcrops sampled by Amax had a measured 

true width of thirty metres @ 60.7% Fe (Robinson & 

Gellatly 1978, App. 1). 

Sample Lithology Fe (%) P 

32099 Massive hematite, 

partly lateritised 

65.9 0.04 

32100 Hematite 60.3 0.03 

32301 Massive hematite 69.6 0.03 

32302 Hematite-goethite 60.7 0.03 

32303 Hematite-goethite 56.1 0.02 

32390 Lateritised jaspilite 55.6 0.13 

32391 Hematite 60.2 0.05 

32393 Jaspilite 33.1 0.03 

Table 1: Amax sample results from Nabberu Dome 

(Shoemaker Impact Structure).(Extracted from Robinson 

& Gellatly 1978, App. 1) 

Sampling conducted by Galaxy Resources Ltd in 

2008 focused on the north-east rim of the Shoemaker 

crater. Fifteen surface grab samples were taken from 

hematite outcrops within the Frere Formation. Assay 

results returned values up to 61.7% Fe, with nine 

samples showing grades greater than 54.25% Fe. 

Contaminants were relatively low (Galaxy 2008). 

A detailed geophysical survey was also conducted 

by Galaxy (ibid.), which confirmed the presence 

of a significant number of gravity highs with strike 

lengths of 1000 to 5000m, located around the 

Shoemaker structure within the Frere Formation. 

Numerous supergene- enriched iron formations 

were also mapped in several of these areas, 

although the dip and width of these outcrops is 

largely unknown - except for the Amax sampling 

in the north-western project area. The southern 

part of the Shoemaker structure contains a large, 

continuous, E-W oriented gravity high of several 

kilometers, where the Frere Formation seems to 

disappear beneath shallow cover. 

Regionally, several other companies have targeted 

and are targeting the Frere Formation for iron ore - 

including Rio Tinto Ltd., Giralia Resources Ltd. and 

Vector Resources Ltd. No exploration has focused on 

the Frere Formation at the Shoemaker structure yet. 

Galaxy-GMM are the first to do so. 

The area near the GMM-Galaxy ELs has also 

been explored for base metals, gold, uranium and 

diamonds. Within the Shoemaker Impact Structure 

itself, Uranerz Australia Proprietary Limited have been 

searching for vein-type uranium in Palaeoproterozoic 

rocks in 1978 by means of radiometric, resistivity, 

and magnetic surveys, surface sampling, geological 

mapping and drilling. Three surface grab samples, 

assaying 15 ppm U O each, stand out (Abeysinghe, 

3 8 

2005). 

Drilling by RGC Exploration for base metals within 

and on the edges of the impact structure on the 

Teague South group of prospects has yielded up to 

10m @ 3.5% Pb and also elevated Zn and Ag values 

from the carbonate-rich Sweetwaters Well Member 

of the Yelma Formation (Edgar 1994). 

2.1.3 Meteoric impact structures and 

their economic significance 

The hypervelocity impact of an asteroid or 

comet with the Earth’s surface is an extraordinary 

geological process, involving vast amounts of 

energy and extreme strain rates, causing 

immediate rises in temperature and pressure 

that produce fracturing, disruption and structural 

redistribution of the Earth’s materials. Some 170 

individual terrestrial impact structures or small 

crater fields have been recognized world-wide, 

and several more are discovered each year (Grieve 

2005). 

“Meteorite impacts cause conversion of kinetic energy 

into thermal energy. Part of this thermal energy is 

used to form a melt sheet, part is dissipated to heat 

the target rocks and these together with the hot rocks 

that elastically rebound from the depth of several 

kilometres (central uplift) activate hydrothermal 

circulation…. Hydrothermal systems activated by 

meteorite-impact events are important because 

they may also form economic mineral deposits, as 

is documented for several impact structures in the 

world” (Pirajno 2005, p. 587). 

Resource-forming processes can be linked to 

approximately 25% of all terrestrial impact structures 

world-wide, either as a direct result of the impact 

event or through subsequent modification of the 

target rocks (Hawke & Dentith 2006). The giant 


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Vredefort - Witwatersrand and the Sudbury impact 

structures are the best-known such impacts - 

housing world-class ore deposits of Au, U and Ni, 

Cu, PGE (platinum group elements) respectively. 

Closer in crater-size (some 11 km in diameter) and 

commodity type is the Ternovka meteoric structure 

located in the Proterozoic fold belt of the Krivoi Rog 

Basin, Ukraine, where both iron ore and uranium 

have been mined (Grieve 2005). 

2.1.4 Geology and Mineralisation 

The Shoemaker Impact Structure (formerly known 

as the Lake Teague Ring Structure) - over which the 

ELs have been granted - lies on the southern edge 

of the Palaeoproterozoic Earaheedy Basin, which 

overlies the northern margin of the Archaean Yilgarn 

Craton. 

Figure 2: 

Northern Shoemaker iron targets shown against 

1:250,000 Earaheedy geology map (top), Galaxy gravity 

image (middle) and regional TMI image (bottom).

The Earaheedy Basin follows the Hamersley Basin 

in significance as far as iron oxide deposition is 

concerned. Two iron formations are found within 

the Earaheedy Basin – a Banded Iron Formation 

(BIF) and a Granular Iron Formation (GIF). These 

are interbedded with shales and exhibit local areas 

of iron enrichment. Both iron formations are present 

within the Shoemaker tenements. 

Mapping by Amax Exploration in 1978 identified 

up to eight (8) zones of hematite-goethite occurring 

within the Frere Formation. These zones ranged in 

thicknesses from 5 metres up to 97 metres. The Amax 

geologists drew lithologic-stratigraphic parallels 

between the apparently similar iron formations of 

the Hamersley and the Earaheedy Basins. 

Zone 1, which was only identified immediately to 

the south-east of the Shoemaker Impact Crater (then 

known as the ‘Nabberu Dome’), was between 36m 

and 97m thick, and a strike length of 8 kilometres was 

inferred; assays with an Fe content averaging 61.2% 

over 58 metres have been obtained, with overall low 

grade contaminants of 0.02% P and 0.09% S. None of 

the iron zones found within the Shoemaker Project 

could be assigned to any of these stratigraphic zones 

- possibly due to deformation of the strata following 

the impact event. Seven samples taken by Amax at 

the north-west of the Shoemaker rim structure within 

the current project area returned Fe-assays between 

55.6% and 69.6% with low phosphorus content. 

Work conducted by the Geological Society of 

Western Australia (Piranji 2005) uncovered significant 

evidence of post-impact hydrothermal activity arising 

from the Shoemaker impact event. This includes 

early, high-temperature alkali metasomatism at deep 

levels, resulting in granitoid rocks of syenitic affinity 

and alkaline composition, with strong enrichment in 

Na O, K O, Rb, Sr, Y, Zr, Nb, Ba and REE (Rare Earth 

2 2 

Elements); it also includes a later, lower temperature 

metasomatism at higher levels, manifested in 

overprinting by hydrous mineral assemblages. 

Pervasive silicification of the Yelma Formation, 

partial silicification, cross-cutting quartz-veining in 

NE-trending impact-related fractures and pods of 

chert and jasperoidal quartz within the granular iron 

beds of the Frere Formation bear witness to the later 

phases of this hot spring activity. 

2.1.5 Potential 

There is ample evidence proving Shoemaker as an 

impact structure (Pirajno 2002, 2005). Thus the next 

step is to seek out the potential economic benefits 

of an impact. Hawke (2003) reports impact-related 

hot spring activity from the southern flank of the 

structural uplift of the Shoemaker Impact Structure. 

The same author (2004, p. iii) notes that it is “… 

located in an area of known base-metal, iron and 

gold occurrences and is prospective for progenetic 

and hydrothermal deposits…” (see fig 4.) 

The Shoemaker Iron Ore Project represents an 

exciting exploration target for iron ore. Whilst the 

threshold for an iron ore project in this region 

of Western Australia to be deemed economically 

viable is considered high, there is scope for this 

project to meet that threshold. There has been – 

obviously - surface enrichment of iron content in the 

Frere formation (with lower-grades to be expected at 

depth), yet it is also likely that the impact-alteration 

may have led to higher grades. Significantly, the 

Shoemaker project appears to contain the most 

extensive outcrops of iron enrichment compared 

to other areas of the Frere Formation. Geophysical 

surveys indicate that large gravity high anomalies, 

coincident with mapped outcrops of iron enrichment, 

present potentially large exploration targets. 

Iron ore is not the only commodity for this project. A 

compilation of the economic potential of the region 

(Abeysinghe 2005, Fig. 36) shows the Shoemaker 

project area being prospective for 

- Iron: supergene-enriched granular ironformation; 

- Gold: hydrothermal-vein mineralization; 

- Base metals: strata-bound-sedimentary 

carbonate-hosted mineralization; 

- Uranium: “Calcrete areas and palaeochannels 

associated with or adjoining the Shoemaker 

impact structure are prospective for uranium 

mineralization” (Abeysinghe 2005, p. 51). 

2.1.6 Shoemaker Proposed Exploration 

and Budget 

Initial work is to focus on defining and prioritising iron 

ore drill targets through field-work, to be followed by 

drilling of these targets. A heritage survey should be 

completed prior to drilling. Further gravity surveys 

covering the south-eastern corner of the project area 

and the western edge of the Shoemaker Structure 

are also proposed to be undertaken. Of particular 

significance, the gravity-high anomalies appear to 

be co-incident with magnetic lows, indicating higher 

hematite enrichment. Several large magnetic lows 

occur in the south-east corner, which may represent 

further gravity targets - and if due to hematite rich 

iron formations - may offer considerable strike 

potential. 


45

46 


Proposed Work Yr 1 Yr 2 Total 

Heritage survey $15,000 $15,000 $30,000 

Field reconnaissance $20,000 $20,000 $40,000 

Road and drill-site preparation $20,000 $20,000 $40,000 

Geophysics $50,000 $50,000 $100,000 

Drilling 50-80 RC holes/year S250,000 $250,000 $500,000 

Assaying $35,000 $35,000 $70,000 

Planning, supervising, reporting $50,000 $50,000 $100,000 

Total $440,000 + $ 440,000 = $ 880,000 

2.2 Eyre Projects 

E69/2369; ELAs 69/2616, 69/2649, 26/2650 

(Rare Earths, Ni-Cu, Cu-Au-U) 


The Eyre project is situated on the Nullarbor 

Plain, 40km north of the Eyre Highway (between 

Cocclebiddy and Madura), in the Dundas Shire, on 

Moonera pastoral lease. 

Access is good, using existing roads and 

tracks. Tengraph shows an airstrip just a few 

hundred metres south of the EL area. 


Regionally and further afield in the Eucla Basin, 

on the Culver 1:250,000 sheet area, Canadian 

explorer Buffalo Gold Ltd. followed up on BHP’s 

regional search for Jinchuan-style Ni-Cu sulphide 

mineralisation by sinking a diamond drill hole to 

650m on its Hannah project near the Eyre highway. 

Unlike BHP in 1998, Buffalo reached basement [at 

425m] in 2006 and intersected over 200m of highgrade 

metamorphosed mafic gneiss & gabbroic 

intrusive. No significant nickel/copper values were 

found, though disseminated iron-sulphides were 

present. 

On the Jubilee and Mason 1:250,000 sheet areas, 

280 odd km NNE from GMM’s ground, WMC’s 

interpretation of geophysical data indicated the 

presence of possible diatremes on their “Western 

Desert (Shell Lakes)” project. Surface indicatormineral 

sampling identified fresh non-kimberlitic 

Shoemaker Proposed Exploration and Budget 

chromite and also transported, ‘old’ kimberlitic 

indicators (Waugh 1995). A second pass over 

partly the same ground by this company (“Mundra 

South” project) aimed at diatremes, interpreted from 

aeromagnetic and TEM surveys. Though five drillholes 

were successful in penetrating the shallow 

basement (19 to 140metres), the target mafic 

intrusive rocks were not encountered. Instead, 

basaltic units erupting onto seafloor silts, as well as 

granite and gneiss were found. Tests for diamond 

and indicator minerals proved to be negative. 

Nonetheless, Richardson (2005, p. 12) concludes 

that “the presence of a possible meso-Archaean age 

for the underlying regional basement in the area is 

somewhat encouraging for diamonds”. 

Next to the WMC tenements on the Jubilee Sheet 

area De-Beers joint ventured Gunson Resources 

Ltd’s “Shell Lakes” diamond project. De Beers 

withdrew from the JV - after having drill-tested eight 

magnetic anomalies, each with one hole. Every 

hole intersected para-kimberlitic pipes. Many more 

intrusives have not been tested for diamonds, nor 

has nickel exploration run its full course here. 

On the Loongana 1:250,000 sheet area, Utah 

Development Co. Ltd.’s gravity and aeromagnetic 

surveys indicated a mafic/ultramafic sequence or 

a layered mafic sill on their “Haig Prospect”, some 

90km N of the present GMM tenements. Drilling 

to test basement lithologies in 1982 was aborted 

at 332m, due to extremely poor drilling conditions 

(Ransted 1983). 

Helix Resources Ltd. picked up the ground as their 

“Loongana Project”, targeting mainly stratiform

eef-style platinum group elements (PGE) with 

their aeromagnetic and ground magnetic surveys. 

Secondary targets were intrusion-hosted nickel and 

copper, as well as iron-oxide copper gold (IOCG). 

Helixes two diamond drill holes intersected mafic/ 

ultramafic cumulates and granitic rocks. Some 

anomalous PGE values were obtained. Currently 

Richmond Mining Ltd. hold this ground (“Loongana 

Project”), targeting nickel mineralization in a maficultramafic 

layered complex (Richmond Mining Ltd. 

Prospectus 2008). 

Focusing now on the area held by GMM: earlier 

exploration was carried out by CRA Exploration 

Pty Ltd (CRAE) in 1990: CRAE had applied for an 

EL over a large, circular magnetic anomaly (some 8 

kilometres in diameter, with approximately 700 nT 

amplitude) on the Nullarbor Plain. CRAE’s literature 

research suggested that 400-500m thickness of 

sedimentary cover concealed the crystalline basement 

there. CRAE presumed that the magnetic anomaly 

might be due to a carbonatite intrusion within the 

basement, below the Eucla Basin. Fearing difficult 

drilling conditions – such as experienced by Utah on 

the Loongana map sheet area – CRAE abandoned 

their plans to drill this magnetic anomaly. The 

anomaly remains untested and highly prospective. 


The Eucla Basin lies on the margins of the Yilgarn, 

Musgrave and Gawler Cratons. The Basin comprises 

a geologically young sedimentary sequence of 

Cretaceous and Tertiary, un-conformably overlying 

a buried basement. Because of this several hundred 

metres thick overburden, little is known about the 

rocks below it. Yet it is the Archaean-Proterozoic 

basement which might harbour extensive deposits, 

such as are known from outcropping Australian 

cratons. 

The Madura 1:250,000 geological series map shows 

the EL surface area as consisting entirely of Cainozoic 

material: Nullarbor Limestone and calcareous 

clay. Geophysical and sporadic oil and mineral 

exploration drill data suggest that the Archaean/ 

Proterozoic basement is several hundred metres 

below the surface. 

Geophysics show that the project straddles a regional 

gravity high and circular magnetic anomaly. It is not 

known what the source of the distinctive magnetic 

anomaly is. It may be a relatively magnetite rich rock, 

a mafic intrusive, mineralization, or a carbonatite 

body. 

GMM, the current explorer of this large circular 

magnetic anomaly, reviewed past exploration 

data and commissioned Geoforce in early 2009 to 

conduct a new ground magnetic survey. 

The objective of this survey was to detail the magnetic 

high observed in the airborne data, and to determine 

where the depth to target is a minimum. Ground 

survey data over 80 line kilometres were recorded, 

modelled and evaluated. The survey resulted in 

good correlation between magnetic and model 

responses and defined a drill-site, where intersection 

of basement with high magnetic response can be 

expected (Couston 2009): 

Easting 261 500 E 

Northing 6 496 220 N 

Length 550m to 600m 

Dip 70 degrees 

Azimuth 0 degrees (N) 

Estimated target depth 535m approx 


GMM are targeting carbonatite, IOCG or possibly 

mafics-related mineralization at Eyre. The most 

likely target is a carbonatite. 

GMM’s notion that the geophysical and geologic 

setting of the Eyre anomaly is similar to the Sarfartoq 

carbonatite in Greenland, where rare earth elements, 

uranium, niobium, and phosphorous occur in 

economically interesting concentrations (Secher & 

Larsen 1980) derives from the fact that both exhibit 

an intense magnetic high centre, surrounded by a 

magnetic low. Also from the fact, that the Sarfartoq 

and the Eyre magnetic anomalies are of similar 

intensity. At Sarfartoq the halo of magnetic low 

relates to hydrothermal alteration of the granite/ 

gneiss host rocks. 

Closer to home, the Eucla Basin shows similarities to 

the Kimberley’s mafic-ultramafic-gabboric intrusives, 

carbonatites and kimberlites. According to Gunson 

(2002 and 2003) the para-kimberlites discovered by 

Gunson lie along the Mundrabilla Fault, a continental 

gravity lineament, along which also the Argyle 

diamond pipe is sited. 

Within Western Australia, several carbonatites are 

known to contain economic concentrations of 

minerals, including the world-class Mt Weld Rare 

Earth carbonatite, which holds resources of 12.2 

million tonnes at 9.7 percent REO, making it the 

world’s richest Rare Earths ore body. The Mt Weld 

deposit also contains potentially economic deposits 

of niobium, tantalum, zirconium, and titanium. 

Carbonatites elsewhere are known also to be 

associated with economic concentrations of copper, 

e.g. the large Phalaborwa (Palabora) carbonatite- 


47

48 


hosted magnetite-copper sulphide deposit in Africa, 

with a resource of over 850 mt at 0.5% copper, 

plus gold, platinum, palladium and silver. The Eyre 

anomaly may also represent an iron-oxide-coppergold 

deposit. 

GMM’s untested large circular magnetic anomaly 

is at the ‘ready-to-drill’ stage, with new groundmagnetic 

definition and with drilling-quotes at hand. 

2.2.6 Eyre Proposed Exploration and Budget 


Field survey and road cutting $10,000 $10,000 

Geophysics $95,000 $95,000 

Drilling one hole $120,000 $120,000 

Assaying $25,000 $25,000 


Total $180,000 + $110,000 = $290,000 

2.3 Webb Project 

EL 80/3887 and EL 80/3985 (Cu-Au-U) 


GMM’s two abutting tenements, covering a combined 

area of 376 km2, lie in the Gibson Desert, some 

500km south of Halls Creek in the East Pilbara Shire. 

The 670km access from Alice Springs is via roads 

and tracks of variable quality. The ELs cover 

ground designated for “Use and Benefit of Aborigines”. 

GMM have already signed a Heritage 

Agreement with the Kiwirrkurra people. Steps 

have been taken to commission a Heritage Survey. 

Completion of the survey is required prior to commencement 

of the drilling program. 


While the Arunta Block – more specifically the 

Mount Webb area and the Mount Webb granitic suite 

- has been overlooked for a long time, R. Budd & 

al., in their paper on ‘The metallogenic potential of 

Australian Proterozoic granites’ (2002, p. 33) report 

that “recent exploration results have confirmed that 

this truly ‘greenfields’ area may have some economic 

significance. Semicontinuous rock-chip sampling 

returned results of 9.1% Cu, 3 g/t Ag and 0.38 g/t 

Au over a true width of 4 m and 0.3% Cu and 8 

g/t Ag over a true width of 10m. An aircore-drilling 

program has confirmed the presence of three Cu-Au- 

Ag anomalous areas, of which the largest returned 

peak values of 0.21 ppm Au and 896 ppm Cu on 

three adjacent 800-m-spaced grid lines (Aurora Gold 

Ltd, quarterly report, December 1997).” 

On the present GMM EL area BHP Minerals were 

active during 1998 and 1999, searching for iron oxide 

copper gold (IOCG) mineralisation of the Olympic 

Dam type. They targeted the Mount Webb Adamellite 

and the associated Pollock Hill Formation for Cu and 

Au in an area where an east-west structural belt is 

abruptly terminated by north-south structures – seen 

both in magnetics and gravity (Raetz 1997). BHP’s 

work comprised ground magnetics, gravity and 

Protem EM sounding. During their tenure a 400m 

line spacing aeromagnetic survey was flown. 

Gravity work with 90 stations, contracted by BHP, 

has revealed a large, 3km x 6km gravity anomaly 

of 6 mgal. The magnetic response over the main 

section of this anomaly is weak (20nT) and broad, 

thus it does not define a discrete source. Protem 

electromagnetic soundings indicate that the depth to 

basement is in the order of 300m+ (Grimley 1999). 

BHP concluded that several possibilities exist for the 

source of the gravity anomaly, the most likely being: 

• A dense resistive body, probably a nonmagnetic 

mafic intrusion; or 

• Hematite IOCG mineralization; or 

• Basement high (not indicated by Protem 

soundings). 

Drill testing was recommended, but never implemented, 

due to difficulties negotiating access and to 

the weather, and the tenement was surrendered. 

To date this anomaly has not been drilled yet.


The geology of the ELs can be studied on the 

Wilson and Webb 1:250,000 scale GSWA maps. 

The surface of the area is largely covered by windblown 

desert sands, with occasional Cretaceous 

sandstones outcrops. Sandstones and conglomerates 

of Upper Proterozoic age comprise the basement. 

Some of these erosion-resistant rocks are preserved 

in the southern part of the EL. Outcrops of Mount 

Webb Granite are shown 3km to the S respectively 

SE of E 80/3887. This granite and/or its influence 

are likely to be found under recent and Cretaceous 

cover within the GMM tenements. The Mount Webb 

Suite underlies indeed much of the GMM EL area, 

as shown in the ground-breaking work “A newly 

discovered major Proterozoic granite-alteration 

system in the Mount Webb region, Central Australia, 

and implications for Cu-Au mineralisation” (Wyborn 

& al. 1998, Fig.1). The above work describes the Mt. 

Webb Granite as being heterogeneous, comprising 

several types of unaltered granite, sodic-calcicaltered 

granite, sericite-altered granite and aplite, and 

having a geochemistry resembling those of other 

Proterozoic Cu-Au mineralised areas. 

GMM’s targets are sub-surface. Thus geophysical 

information is crucial to generate and to locate those 

targets. GMM has commissioned Geoforce to use 

the most detailed publicly available geophysical 

data from the project area. There are indeed 

good aeromagnetic data sets obtainable from the 

Geoscience Australia website, with 400m-spaced 

lines, as well as gravity data from 2.5km spaced 

stations. The aeromagnetic data were re-gridded 

and filtered. A change in character of the magnetic 

field over the tenement suggests that the depth to 

magnetic basement decreases significantly from W to 

E. There is little correlation between the magnetic and 

gravity field images. Geoforce consider 3D induced 

polarization surveys to be particularly efficient to 

delineate the zones of best developed mineralization 

and to target further drilling (Godber 2009). 


In their paper on the “Mount Webb Granite Alteration 

System” Wyborn & al. (2001, p. 141) highlight the 

similarities between the Mount Webb Granite and 

its co-magmatic felsic volcanics in the Pollock 

Hills Formation and “granites in other Australian 

Proterozoic regions, where hydrothethermal Cu and 

Au deposits have been linked to magmatic sources 

(e.g. eastern Mount Isa Inlier; Gawler Craton)”. 

The key criteria which establish the western Arunta 

Block as prospective are: 

• fractionation trends in the granite, clearly 

evident in the geochemical data; 

• magmatic alteration effects (including sodic– 

calcic, sericitic, and hematite– K-feldspar) in the 

granite and country rock; and 

• evidence of metallogenically significant 

hydrothermal interaction with country rock. 

A large number of companies: Aurora-BHP, then also 

Cazaly Resources, Nova Energy, Bestgold, Ashburton 

Minerals, Toro Energy, Meteoric Resources and others 

have applied for ground in this under-explored, yet 

highly prospective area. 

An Ashburton Minerals Ltd ASX e-Lodgement 

(08/02/2007) mentions that “on the NT side of 

the border, the Arunta Block is blanket-pegged 

and is being actively prospected for a variety 

of commodities, including gold, copper and 

uranium”. Another lodgment by the same explorer 

(17/09/2008) titled “Excellent results indicate new 

copper field at Mt Webb” reports multi-element 

Figure 3: modelled TMI image for E69/2369 

(Source: Geoforce 2009, fig. 4.1). 


49

50 


rock chip assay results with up to 13% Cu, 19 g/t 

Au, 78 g/t Ag, 2.6 g/t Pd, 0.5% Bi and 32% Mn. 

It is worth noting that the GMM tenements lie 

along the extension of the geochemical Cu-Au-Ag 

anomalies and structural trends shown in Fig. 5 of 

the Ashburton Minerals Ltd. (08/02/2007) release of 

information. [The extrapolation of such trends over 

a distance of 80 km is speculative at this stage and 

needs a more detailed study of geophysical data.] 

Ashburton Minerals’ exploration update from Nov. 

2008 reports that all holes from a 5-hole RC drilling 

program on their Pokali Prospect have intersected 

widespread disseminated copper mineralization. All 

holes returned significant copper values, such as 205 

m @ 0.1% Cu in one hole, 30m @ 0.3% in another, 

Figure 4: Regional setting of the Webb Project. 

(After: L. Wyborn & al. 1998, Fig. 1) 

26m@ 0.4% in yet another, etc. The Pokali Prospect 

is some 88 km ESE of the GMM tenements. GMM 

management are hopeful that lithology and structure 

will be found to be similar across the distance. 

Thus GMM are well positioned, in the right geological 

environment, with an established gravity anomaly, to 

target a sizeable and potentially world-class deposit 

of gold, copper and uranium. 

2.3.5 Webb Proposed Exploration Budget 

The tenements have been granted, a Heritage 

Agreement has been signed, quotes for a Heritage 

Survey and for a drilling program have been 

obtained. The project is ‘ready to go’. 


Access negotiation $50,000 $75,000 $125,000 

Heritage Survey $15,000 - $15,000 

Field survey, road cutting $25,000 $10,000 $35,000 

Geophysics - $50,000 $50,000 

Drilling $150,000 - $150,000 

Assaying $50,000 - $50,000 


Total $340,000 + $155,000 = $495,000

2.4 Veevers Project 

ELA 80/3986 (Cu-Au-U, Rare Earths) 


The Veevers project is located on Vacant Crown 

Land some 280km south-southwest of Halls Creek 

and 200km southwest of Balgo Mission in the Great 

Sandy Desert. Access is through Billiluna, Balgo, 

Yagga Yagga and Point Moody. Old seismic survey 

lines and tracks - upgraded by CRA Exploration Pty 

Ltd (CRA) in 1991 - are still visible on satellite photos. 

GMM have applied for a 222.8 km2 exploration 

licence in the Kimberley Mineral Field, East Pilbara 

Shire. 

The affected Native Title area is controlled by the 

Ngaanyatjarra Council. 


CRA Exploration Pty Ltd had worked their 

Exploration Licence 80/1388 over a known 

coincident gravity and dipolar (airborne) magnetic 

anomaly. CRA had conducted airborne magnetic 

surveys, followed by 7km of ground magnetics 

and 10 km of gravity survey in 1991. CRA’s interest 

in the dipolar magnetic anomaly had been for a 

diamondiferous kimberlitic pipe, before – due to 

the size and depth of the source – emphasis had 

shifted to other targets. GMM’s ELA covers this 

same untested geophysical anomaly. GMM have 

taken up where CRA left off and started off with a 

re-evaluation of all earlier geophysical data. 


The 1:250,000 Helena GSWA geology plan shows 

that virtually all the surface of the licence area is 

covered by recent aeolian sandy sediments. 

CRA’s exploration work provides valuable 

information on what lies under the surface. As 

the CRA report (1992, p. 1) states, the “Veevers 

magnetic-gravity target lies on the flank of a regional 

basement high in the Eastern Canning basin. The 

basement high is coincident with interpreted northsouth 

faulting on the Helena Platform”. The CRA 

geophysical surveys of 1990-1991 had identified 

and confirmed coincident gravity and magnetic 

anomalies. Modelling of ground magnetic dipolar 

response had suggested depth to top of source 

700m, though reasonable fits had been obtained 

for 300-400m depth (the same depth as interpreted 

from helimagnetics). The geometry of helimagnetic 

profiles had shown a 3,500m x 5,000m lateral extent 

(Christie 1992, p. 3). 

A single drill hole had been sunk by CRA to test the 

anomaly. The hole was drilled to 432.3 m, where 

it was abandoned, due to rods having got stuck. 

Nothing in the monotonous sequence of Permo- 

Carboniferous wackes and sandstones was found as 

the cause of the anomaly, and no magnetic source 

was identified. Due to the depth of the target CRA 

had thought that it was of no economic importance 

and made no further attempt at drilling - back in 1991. 

GMM requested that Geoforce re-view and rework 

all available geophysical data. This task was 

carried out in July 2009. Public regional data were regridded 

on a 400m mesh. 2D modelling of a single 

N-S profile of magnetic and of gravity data indicated 

a maximum depth to source of 770 m for the 

magnetic source and 580m for the gravity anomaly. 

Geoforce recommended that GMM commission a 

further analysis - using the gravity and magnetic data 

- to better define the prospectivity of the geophysical 

data for IOCG prior to drilling (Godber 2009). 


Since the CRA Exploration drill-hole had been 

abandoned at 432.3m depth and thus failed to locate 

the source of the anomaly, this coincident magnetic 

and gravity anomaly remains highly prospective for 

both IOCGU and carbonatite type mineralisation. 

Whilst CRA concluded in 1991 that a discovery 

would be of limited economic importance beyond 

430m, many significant discoveries have been made 

much deeper recently, and current exploration 

practices are aiming for discoveries at significantly 

greater depths. (E.g. Ausquest Ltd’s drilling in 2008 at 

their Diamantina Project, where they intersected an 

IOCG intrusive system from 960m to 1,790m – based 

on a coincident gravity and magnetic anomaly.) 

Godber (2009 p. 3) explains that “iron-oxide-coppergold 

(IOCG) deposits are a recently recognized class 

of hydrothermal ore deposits that can be economically 

very significant. With their common coincident 

gravity and magnetic anomalies, exploration relies 

heavily on ground and airborne magnetic surveys 

complemented by…gravity data…The gravity 

response is a consequence of the high density of the 

iron oxides and mineralization while the magnetic 

response reflects the proportion of magnetite in the 

iron oxides and less commonly pyrrhotite in the 

deposit. Olympic Dam is the most famous Australian 

and global IOCG example. Olympic dam is buried 

below 200 m, but has a 17 mgal gravity anomaly 

with a 3 kilometre half width and a good magnetic 

signature. Ernest Henry is buried below 300 m, but 

still has a 1.4 mgal gravity anomaly and is magnetic. 

Carapateena, though buried at nearly 400m, still has 

a 1.3 mgal anomaly”. Godber adds that field data 

suffer from the non-uniqueness problem, meaning 

that there is no single model solution for a given 


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anomaly. E.g. a gravity anomaly “may be matched 

by a small, dense source or by a larger, less dense 

source or even a group of variable density sources 

spread at different depth with different sizes”. 

To sum up: the independent geologist concludes that 

CRA Exploration Pty Ltd having conducted detailed 

magnetic and gravity surveys over the Veevers 

anomaly and having identified both magnetic 

and gravity anomalies, the project represents an 

advanced target with good potential. 

2.4.5 Veevers Proposed exploration and 

budget 

Figure 5: Gravity and Magnetic images of the Veevers anomaly 

with GMM tenement outlines (Source: Geoforce 2009) 


Access negotiation $25,000 $25,000 $50,000 

Road cutting, mobilisation $50,000 $50,000 

Drilling an 800-900m RC/DDC hole $150,000 $150,000 

Assaying $15,000 $15,000 


Total $40,000 + $290,000 = $330,000

2.5 Black Hill Project 

E 80/3663 (Silver and Base Metals) 


This project is situated in the Kimberley region, 90 

km NE of Halls Creek and 20 km E of the Great 

Northern Highway. It covers 58.7 km2 within the 

Halls Creek Shire on Mabel Downs Pastoral Lease 

and on Vacant Crown Land. The Ord River flows 

through the northern part of the block. 

Black Hill, after which the project is named, is in the 

NW-sector of the tenement. 

GMM’s Mt. Kinahan project lies 50km to the SW. 

Access is difficult at the moment; old tracks into and 

within the tenement will have to be re-cut. 


During the 1969 field season Pickands Mather & Co. 

International investigated a photo-anomaly caused 

by light-coloured rocks along the Halls Creek Fault 

between Alice Downs and the area now covered 

by GMM’s E 80/3663. The company geologist El- 

Ansary (1969) noted limestone units along the fault 

zone, persisting for many miles, and cutting across 

all stratigraphic units. The limestone was anomalous 

in nickel, and contained some copper gossans. The 

geologist concluded that the limestones along and 

within the Halls Creek Fault were of interest, due 

to the fact that the carbonate rocks at the Sophie 

Downs Copper Showing were known hosts for 

mineralization. 

In the 1970-ies prospector Robert Wanless (RW) 

visited the Black Hill calcite/dolomite outcrops 

with an American geologist, who remarked on the 

similarity between this black calcite and the host of 

the silver mineralization in southwestern USA. RW 

and colleagues conducted a regional helicopter 

survey of the East Kimberley in 2006, identifying 

several zones of black calcite in the Black Hill area. 

The two samples they took from one of those black 

calcite zones within the present ELA area were 

extraordinarily rich in silver: up to 138 ppm Ag (or 

nearly 4 ½ ounces/ton). They were also anomalous 

in lead: 0.44% [oral communication RW and sighting 

of the assay results]. 


The tenement area is comprised largely of 

Paleoproterozoic rocks and includes part of the 

Black Rock Anticline and of the Biscay Anticlinorium. 

It also covers several kilometers strike-length of the 

Hall’s Creek Fault Zone (Dixon Range 1:250,000 

geological map; Dixon 1:100,000 geological map; 

also Report 74 of the WAGS). 

The independent geologist visited the Black Hill 

area with GMM director Robert Wanless (RW) in 

December 2007 for reconnaissance geology and 

sampling. During the four days on the ground several 

traverses were made and 31 rock chip samples were 

collected. The rocks generally encountered were 

metavolcanics (metabasalts and minor ultrabasics), 

gabbros, amphibolites, metasediments (including 

graded pebbly sandstones), while those of special 

Figure 6: Black calcite and chlorite schist outcrops 

(Photo R. Wanless 2006) 


53

54 


interest were black chlorite schists, limestones and 

dolomites. Several quartz-reefs were also noted and 

sampled. 

Targeted during this visit were the ‘black calcite’ 

outcrops, which earlier prospecting has found to be 

highly anomalous in silver; in particular the ‘black 

calcite’ range, which was noted during RW’s 2006 

helicopter reconnaissance to persist for over six 

kilometres strike length. 

The independent geologist was able to follow this 

feature on the ground and to sample it over 1,500 

m length. He found that it was indeed open in both 

the north and the south. He has formed the opinion 

that this be the Halls Creek Fault or an associated 

structure. Over half the samples were collected 

from this 30-50m wide zone which swells up to 

over 100m. The NNE-SSW striking feature typically 

consists of dark green (‘black’) chlorite schist forming 

dark ridges. While the schist consists of large slatelike 

plates, it is often tightly folded. Within and to 

the west of this prominent schist are a number of 

calcite and dolomite lenses and layers. These are of 

a few cm to nearly a metre thick. There are many of 

these lenses and layers, comprising 10-30% of the 

30-50m wide target-zone. They consist of calcite and 

dolomite of light to dark (gray) colour, often with 

blobs and irregular veins of milky quartz. Malachite 

was frequently observed in the carbonate lenses. 

Galena was found in one outcrop. Sampling by the 

2.5.5 Black Hill Proposed Exploration 

and Budget 

It is recommended that detailed prospecting, 

geological mapping and geochemical sampling 

comprise the initial exploration phase. The target zones 

can be traced on satellite images and air-photographs, 

due to the dark ridges and the specific vegetation 

cover as well as the lighter colours of limestone, 

dolomite, ankerite and calcrete in the slopes and flats. 

independent geologist could not confirm the earlier 

silver values obtained from within the ELA area. He 

found, however, several copper occurrences, with of 

up to 1.3% Cu in rock chip samples. The majority of 

samples had also elevated Mn values. 


The stated exploration targets of this project are 

silver-bearing carbonate-rich zones and locations of 

black calcite. 

Black calcite is a common associate of silver/ 

manganese ores found in the southwestern silver 

fields of the USA. This association is reported, among 

others, from the Silver District in Arizona (S.B. Keith 

1978), from the Western Mining Districts of the USA 

(Hewett & Radtke 1967), as well as from Sonora, 

Mexico (Silvermex 2007). 

The Halls Creek Fault Zone hosts a number of 

hydrothermal vein type copper occurrences in mafic 

Tickalara Metamorphics, immediately to the north of 

the ELA, and the hosting structures extend into the 

GMM tenement area. 

Gold occurrences have been described from the 

Eastern Zone of the Lamboo Group (Report 74 of 

the GSWA). Since the ELA straddles this zone, its 

gold potential should be examined as well. 


Road cutting, prospecting, sampling $25,000 $50,000 $75,000 

Geophysics $50,000 $50,000 

Drilling ten RC holes $90,000 $90,000 

Assaying $10,000 $25,000 $35,000 


Total $105,000 + $215,000 = $ 320,000

2.6 Mount Kinahan 

Project E 80/3662 (Manganese, Copper) 


GMM has been granted the Mount Kinahan 

Exploration Licence, covering 227.7 km2 in the 

Kimberley Mineral Field, Halls Creek Shire. The EL 

straddles the northern part of the Albert Edward 

Range 45 km ENE of Halls Creek in the Kimberley 

region of Western Australia. The tenement is 29 

km [by road] east of the Great Northern Highway, 

comprising 17 km of station tracks and 12 km of 

tracks cut by exploration companies during the past 

few years. 

The northern half of the application is on the Sophie 

Downs pastoral station, the remainder on vacant 

crown land. Castle Creek flows through the EL and 

joins the Elvire River south of the block. 


During the late 1960-ies Pickands Mather & Co. 

International investigated a number of anomalies 

detected on air-photos in the East Kimberley. One of 

these was a dark-brown colour-anomaly near Cow 

Creek (a tributary of Castle Creek), at the western 

boundary of the present E 80/3662. Graphitic shales 

with several pyritic gossans and anomalous Cu, Zn 

and Ag values were found to be the cause of this 

colour anomaly. The find was notable because of; 

a) the great strike length of the shale horizon, 

b) the presence of at least iron sulphide 

mineralization, 

c) and the association of acid volcanic rocks with 

black shales (Barber 1970). 

Another Pickands Mather & Co. International 

geologist, J.L. Harris (1969) visited a copper showing 

about a mile north of Mt. Kinahan (within the 

present GMM tenement). Assays from small, highgrade 

lenses with chalcociite, cuprite and malachite 

assayed up to 65% Cu and ½ oz. of Ag. These lenses 

were associated with quartz and sheared rock in a 

narrow, near-vertical, NE-trending fault cutting both 

the Lower Proterozoic Olympio formation and the 

overlying Albert Edward Group. 

In the 1970-ies Mr. Robert Wanless was working 

as prospector in the East Kimberley. The copper 

occurrences he located at that time are the prime 

exploration targets of the present enterprise. 

During the period 2000-2006 Sipa-Gaia NL held 

exploration licences, which covered partially the 

same ground as the present GMM tenement. They 

were targeting Pb-Zn-Ag-Cd mineralization in the 

Eliot Range Dolomite and Cu-Bi-Au anomalies in 

the Olympio Formation. After extensive field work 

comprising stream sediment, soil and rock chip 

sampling, geological mapping and RAB drilling, they 

found that the potential for finding an outcropping 

or near-surface world-class zinc deposit has been 

substantially downgraded. They identified, however 

extensive low-grade mineralization and found 

evidence for some high-grade mineralization for both 

Ag-Pb and Cu. They concluded that the Dixon Range 

Project remains an excellent grass-roots exploration 

opportunity, with potential for deeper mineralization 

– such exploration requiring, however, the resources 

of a major company (Brauhart 2003, 2004 and 2005). 


For regional setting the Antrim 1:100,000 scale 

geological map and explanatory notes, the Gordon 

Downs 1:250,000 scale geological series sheet, the 

1:500,00 scale Plan 3 of WAGS Bulletin 143 and 

the 1:500,000 map of WAGS Report 74 have been 

consulted. 

The rocks of the EL area are largely those of the 

Paleoproterozoic Olympio Formation, consisting 

of bedded greywacke and shale. This sequence 

is unconformably overlain by Middle to Upper 

Proterozoic sediments, which consist of sandstone, 

conglomerate, siltstone, shale and dolomite. 

The following types of mineralisation are known 

from within the GMM licence area: 

a) Manganese: in altered dolomites. Historic 

data and latest sampling by Ausquest (May 2009) 

along strike from the GMM ground reveal high Mn 

values, many in excess of 20%. Recent mapping by 

Ausquest has identified the prospective manganese 

horizons as extending into the GMM licence area 

b) Copper: In gossan-bearing black shales 

of 20-150 m width and several km strike length; 

locally significantly enriched in both copper and 

silver (fault). The spatial association with likely acid 

volcanics and volcanoclastics is encouraging. Harris 

(1969, p. 3) surmises: “it is possible that a small highgrade 

orebody may exist, though its size is more 

likely to be 100,000 tons than 1,000,000 tons” (see 

figure 7). 

c) High-grade copper mineralization [as detailed 

above] with silver credits. 

d) Lead-zinc-silver: In the Eliot Range Dolomite. 


55

56 



a) Manganese mineralization: drilling (planned for 

the third quarter of 2009) by Ausquest Ltd. on its 

exploration licence abutting the southern boundary 

of GMM’s E 80/3662 shall be decisive as to GMM’s 

manganese aspirations. 

b) High-grade copper mineralization. 

c) Stratiform Pb-Zn mineralization. The 

Neoproterozoic Eliot Range Dolomite contains 

low-grade mineralization and “testing prospective 

stratigraphy proximal to growth faults is seen as an 

excellent exploration strategy for a committed major 

company” (Brauhart 2004, p. 11). 

Figure 7: Outcrop (3m x 2m) of quartz with copper 

carbonate (Photo: R. Wanless 2006) 

2.6.5 Mt Kinahan Proposed Exploration 

and Budget 

Detailed surface mapping, costeaning, channel 

sampling and some ground-geophysics (year 1) as 

well as drilling (year 2) will be required to define 

the extent of manganese and copper mineralization. 

Proposed Work Y r 1 Y r 2 T otal 

Road cutting, prospecting, sampling $25,000 $80,000 $105,000 

Geophysics $ 50,000 $ 50,000 

RC drilling $100,000 $100,000 

Assaying $ 10,000 $25,000 $35,000 

Planning, supervising, reporting $25,000 $50,000 $ 75,000 

Total $ 110,000 + $255,000 = $ 365,000

3. REFERENCES 

Abeysinghe, P. B., 2005: Mineral occurrences and 

exploration potential of the Earaheedy area, Western 

Australia: Western Australia Geological Survey, Report 

96, 82pp. 

Ashburton Minerals Ltd., 2007: Ashburton Minerals 

Ltd consolidates Mount Webb Project. ASX release 

08/02/2007. 

Ashburton Minerals Ltd., 2008: Excellent results indicate 

new copper field at Mt Webb. ASX release 17/09/2008. 

Ashburton Minerals Ltd., 2008: Exploration update: 

further copper hits at Mt Webb, WA. ASX release 

14/11/2008. 

Ausquest Ltd., 2008: IOCG system intersected at 

Diamantina. ASX release 14/08/2008. 

Ausquest Ltd., 2009: High-grade bedded manganese 

outcrops identified at Wolfe Project. ASX release 

26/05/2009. 

Ausquest Ltd., 2009: Ausquest expands manganese 

position in WA. ASX release 15/09/2009. 

Barber, T. St. J., 1969: “Report Castle Creek area”, in 

Pickands Mather & Co. International Miscellaneous 

Exploration, East Kimberley, 1969 field season, WAMEX 

Open File A520 M67. 

Blake, D. H., Tyler, I. M., & Warren, R. G., 2000: Gordon 

Downs, Western Australia, sheet SF/52-10 (second 

edition), Geological Survey of Western Australia, 1:250 

000 Geological Series, Map and Explanatory Notes. 

Blake, D.H., 1977: Webb, Western Australia, sheet 

SF/52-10, Geological Survey of Western Australia, 

1:250,000 Geological Series, Map and Explanatory 

Notes, 19 pp. 

Brauhart, C., 2003: Department of Industry and 

Resources Annual Report on Exploration Licence 

E80/2597 Dixon Range Project (Covering the period 21 

November 2001 to 20 November 2002), WAMEX Open 

File A66056. 


Resources Annual Report Dixon Range Project 

Tenements E80/2597. 2810, 2811, 2814, 2815, 2896 

covering the period 01/01/2003 to 3 1 / 1 2 / 2 0 0 3 , 

WAMEX Open File A67983. 


Resources Annual Report Dixon Range Project 

Tenements E80/2597. 2810, 2811, 2814, 2815 covering 

the period 01/01/2004 to 31/12/2004, WAMEX Open 

File A70139. 

Budd, A.R., Wyborn, L.A.I. and Bastrakova, I.V., 2001: 

The Metallogenic Potential of Australian Proterozoic 

Granites. Geoscience Australia, Record 2001/12. 

Buffalo Gold Ltd., 2008: “Australia – Nickel 

Projects. Hannah Nickel-PGE Project“, 

http://www.buffalogold.ca/s/AustraliaNickel.asp 

08/04/2008. 

Christie, M.H., 1992: Final report on exploration 

completed within Exploration Licence E80/1388 

(Veevers), Helena 1:250,000 mapsheet, 

Western Australia, CRA Exploration Pty. Ltd. Report No. 

17839. WAMEX Open File A35274. 

Couston. G., 2009: Report to General Mining Corporation 

Ltd on Modelling of Ground Magnetics at Moonera 

E69/2369. Unpublished company report, 24/03/2009. 

Dow, D.B. & Gemuts, I., 1967: Dixon Range, Western 

Australia, sheet SE/52-6. Geological Survey of Western 

Australia, 1:250,000 Geological Series, Map and 

Explanatory Notes,15 pp. 

Edgar, W., 1994: RGC Exploration Limited Annual 

Report Period 18/07/93 to 17/07/94 Teague. WAMEX 

Open File A425601. 

El-Ansary, M., 1969: “Report. The Hall’s Creek Fault 

Zone, Alice Downs area”, in: Pickands Mather & 

Co. International: Miscellaneous Exploration East 

Kimberley 1969 field season. WAMEX Open File A520 

M67. 

Fraser G.L., Huston D.L., Gibson G.M., Neumann N.L., 

Maidment D., Kositcin N., Skirrow R.G., Jaireth S., 

Lyons P., Carson C., Cutten H. & Lambeck A., 2007: 

Geodynamic and metallogenic evolution of Proterozoic 

Australia from 1870 to 1550 Ma: a discussion. 

Geoscience Australia Record 2007/16. 

Galaxy Resources Ltd., 2008: Gravity survey and rock 

chip sampling confirms iron potential at Shoemaker 

Project. ASX-release 22/08/2008. 

Gemuts, I. & Smith, J. W., 1968: Gordon Downs, 

Western Australia, sheet SF/52-10. Geological Survey 

of Western Australia, 1:250 000 Geological Series, Map 

and Explanatory Notes, 23 pp. 

Geoscience Australia: Geophysics, http:/www.ga.gov.au, 

13/03/2008. 

Godber, K., 2009: Report to General Mining Corporation 

Ltd on re-imaging of gravity and magnetic data EL80- 

3887/3995/3996. Unpublished company report, 3 July 

2009. 

Grieve, R.A.F., 2005: Economic natural resource deposits 

at terrestrial impact structures. Geological Society, 

London, Special Publications, 2005; v. 248; pp. 1-29. 

Grimley, M., 1999: Exploration Licence EL80/2120: Top 

Up Rise Annual Report for the period ending 20th May 

1999. Unpublished BHP report, July 1999, WAMEX 


Groves, D.I. & Vielreicher, N.M, 2001: The Phalapowra 

(Palabora) carbonatite-hosted magnetite-copper 

sulphide deposit, South Africa: an end-member of the 

iron-oxide copper-gold-rare earth element deposit 

group? Mineral Deposita (2001) 36: 189-194, Springer 

Verlag. 

Gunson Resources Ltd., 2002: Diamond joint venture 

with De Beers Exploration at Shell Lakes, Western 


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Australia. Gunson homepage news 15th April 2002. 

http://www.gunson.com.au/html/news_f.html, 

08/07/2009. 

Gunson Resources Ltd., 2003: De Beers withdraws from 

Shell Lakes diamond JV project. Gunson 

homepage news 10th June 2003. http://www.gunson. 

com.au/html/news_f.html, 08/07/2009. 

Hamdorf, D.J., 1990: First and final report on work 

undertaken within EL 69/336 Eyre, Madura 1:250 000 

mapsheet area. CRA Exploration Pty Ltd. Report No. 

16992, WAMEX Open file A32379. 

Harris, J. L., 1969: “Report on Mt Kinahan copper 

showing, East Kimberley”, in Pickands Mather & 

Co. International: Miscellaneous Exploration East 

Kimberley 1969 field season, WAMEX Open File 

A520 M67. 

Hassan, L. Y., 2000: Mineral occurrences and 

exploration potential of the East Kimberley. Geological 

Survey of Western Australia, Report 74, 83 pp. 

Hawke, P. J., 2003: Interpretation of geophysical data 

over the Shoemaker impact structure, Earaheedy Basin, 

Western Australia. Western Australia Geological Survey, 

Record 2003/6, 18p. 

Hawke, P.J., 2004: The geophysical signatures and 

exploration potential of Australia’s meteorite impact 

structures. Ph.D. thesis, UWA, June 2004. 

Hawke, P.J. & Dentith, M.C., 2006: The exploration 

potential of Australia’s meteorite impact craters. AESC 

2006, pp. 1-6, Melbourne, Australia. 

Hewett, D.F. and Radtke, A.S., 1967: Silver-bearing 

black calcite in western mining districts. Economic 

Geology 1967 62: 1-21. 

Keith, S. B., 1978: State of Arizona Bureau of Geology 

and Mineral Technology, Geol. Sur. Br. Bull. 192, Index 

of Mining Properties in Yuma Co., Arizona: 175 (Table 

4). 

Kilgour, B., & Hatch, L., 2002: (compilers). Magnetic 

Anomaly Images of the Australian Region. [Digital 

Dataset]. Canberra: Geoscience Australia. h t t p : / / 

www.ga.gov.au/general/technotes/20011023_32.jsp, 

15/04/2008. 

Meteoric Resources NL, 2009: Land access signed 

and new tenement at Webb gold project. ASX release, 

2009/06/03. 

Pirajno, F., 2002: Geology of the Shoemaker Impact 

Structure, Western Australia. Western Australia 

Geological Survey, Report 82, 52 pp. 

Pirajno, F., 2005: Hydrothermal processes associated 

with meteorite impact structures: evidence from three 

Australian examples and implications for economic 

resources. Australian Journal of Earth Sciences (2005) 

52, pp. 587– 605. 

Raetz, M., 1997: Mt. Webb Western Australia Exploration 

Licences E80/2120, 2121, 2122, Annual Report 

for the period 21 May 1996 – 20 May 1997. WAMEX 


Ransted, T.W., 1983: Report on exploration activities. 

Haig Prospect Eucla Basin. W.A. Report 378. WAMEX 


Richmond Mining Ltd., 2008: Prospectus. Online: www. 

richmondmining.com.au, 24/04/2008, http://www. 

asx.com.au/asxpdf/20080415/pdf/318l58g5cjyxkn.pdf 

10/07/2009 . 

Robinson, K. & Gellatly, D.C., 1978: Final Report on iron 

ore exploration Nabberu Basin, Western Australia. 

Amex Exploration Australia, WAMEX Open File A7448. 

Secher, K. & Larsen, L.M., 1980: Geology and mineralogy 

of the Sarfartoq carbonatite complex, southern West 

Greenland. Lithos 13, 199-212, Oslo. 

Silvermex Resources Ltd., 2007: Lobos Project, 

Sonora, Mexico. Press Release. http://biz.yahoo. 

com/ccn/071108/200711080424210001.html?.v=1, 

08/11/2007. 

Toro Energy Ltd., 2009: Project details, Lake Mackay 

Project. Toro Energy Ltd. website, h t t p : / / w w w . 

toroenergy.com.au/_webapp_37115/Lake_Mackay, 

01/07/2009. 

Towner, R.R., 1978: Wilson, Western Australia, sheet 

SF/52-9. Geological Survey of Western Australia, 

1:250,000 Geological Series, Map and Explanatory 

Notes, 19 pp. 

Tyler I.M., Thorne A. M. and Sheppard S., 1998: 

Dixon Range, Western Australia, sheet SE/52-6, 

Geological Survey of Western Australia, 1:250 000 

Geological Series, Map, 2nd edn. 

Tyler, I. M., 2004: Dixon, Western Australia, sheet 4562. 

Geological Survey of Western Australia, 1:100, 000 

Geological Series, Map and Explanatory Notes, 30 pp. 

Waugh, R.S., 1995: Final Report for the period 4 

December 1993 to 3 December 1994. Western Desert 

Project (Shell Lakes) Great Victoria Desert Nature 

Reserve GSP 2/934. WMC, WAMEX Open File A43886. 

Wyborn, L.A.I., Hazell, M., Page, R.W., Idnurm, 

M., & Sun, S-.S., 1998: A newly discovered major 

Proterozoic granite-alteration system in the Mount 

Webb region, Central Australia, and implications for 

Cu-Au mineralisation. AGSO Research Newsletter, May 

1998, 28, pp. 1-6. In: The Metallogenic Potential of 

Australian Proterozoic Granites, Abstract 5: Mt. Webb 

Alteration System. Geoscience Australia Record 

2001/12, pp. 141-148. 

Wyborn, L. A.I., 2002: Granites & copper gold 

metallogenesis in the Australian Proterozoic. Geoscience 

Australia 2002, pp. 5-33. 

Yeates, N.A., 1977: Helena, Western Australia sheet 

SF/52-5. Geological Survey of Western Australia, 

1:250 000 Geological Series, Map and Explanatory 

Notes; 20 pp.

4. GLOSSARY OF TECHNICAL TERMS 

aeromagnetics Survey made from the air, examining the magnetic characteristics of rocks below. 

Ag Silver, a metallic chemical element. 

alkali, 

(adj. also alkaline) 

Metal of the alkali group: lithium, sodium, potassium, rubidium and cesium. 

anomaly Local feature with special geophysical, geochemical or other characteristics, potential 

indicator of mineralization. 

amphibolite A rock consisting mainly of amphibole and containing plagioclase feldspar. 

ankerite A calcium iron magnesium carbonate mineral. 

anticline A fold in form of an arch. 

anticlinorium A major arch, containing several anticlines. 

Archaean Oldest geologic time and rocks formed in that time [meaning: ancient]. 

Au The chemical element gold. 

Ba Barium, a heavy metallic element. 

basalt A dark volcanic rock. 

base metal Metal inferior in value to gold and silver, such as copper, lead or zinc. 

Bi Bismuth, a metallic element. 

Cainozoic 

(Cenozoic) 

Latest of the four geologic eras: end of Mesozoic to Present; also its rocks. 

calcite A calcium carbonate mineral, main constituent of limestone. 

calcrete A surface or near-surface calcium carbonate or carbonate-cemented rock. 

carbonate Mineral containing CO - such as calcium-, magnesium- or iron-carbonate. 

3 

carbonatite Intrusive carbonate- and alkali-rich rock, a possible source of mineralization. 

chlorite schist Platy rock containing the green, mica-like mineral chlorite. 

costean Trench dug to expose underlying rocks. 

craton Relatively rigid and immobile part of the Earth. 

Cretaceous The third and latest period of the Mesozoic era, respectively strata from that time. 

Cu The chemical element copper. 

cuprite A copper mineral, Cu O of red colour. 

2 

diatreme Volcanic/intrusive vent, such as a diamond-bearing kimberlite pipe or a lamproite. 

DoIR Department of Industry and Resources in Western Australia; since 01/01/2009. 

dolomite Rock consisting of calcium-magnesium carbonate. 

eolian Referring to the wind’s action and the resulting sediments. 

fault Fracture in rocks, with relative displacement of the sides. 

g/t Gram per ton - a measure of grade or concentration. 

fold belt A group of strata that has been deformed together. 

galena Lead sulphide or lead glance, PbS, a common ore mineral. 

gabbro A dark, coarse and even-grained plutonic (intrusive) rock. 

geophysics The science and practice of measuring the physical characteristics of the Earth, 

such as conductivity, resistivity and magnetic properties. 

geochemistry The study of the absolute and relative abundance of elements of the Earth. 


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60 


gneiss Coarse-grained, banded metamorphic (altered) rock. 

gravity anomaly Geophysical observation of the Earth’s density, locally deviating from the norm. 

greywacke Sandstone-like sedimentary rock fragments in a(n ex-) claymatrix with large quartz, 

feldspar and rock. 

h(a)ematite An iron oxide mineral: Fe O , the principal mineral of iron ores. 

2 3 

helimagnetics Helicopter-borne geophysical measurement of magnetic properties of the Earth. 

hydrothermal Referring to the activity of hot water and associated dissolved components. 

impact crater Structure produced by impact of an asteroid or comet. 

intrusive Attribute of igneous rocks which consolidated at depth, e.g. granite, gabbro. 

igneous Attribute of rocks originating from hot, molten material [ignis (L.) =fire]. 

IOCG Iron Oxide, Copper Gold [mineralization]. 

jasper Cryptocrystalline, impure quartz of various colours. 

K Potassium, an alkali metal. 

kimberlite A variety of mica-peridotite; as pipe or dike; sometimes host to diamonds. 

lithology Rock types, rock assembly. 

mafic Attribute of igneous rocks dominated by magnesium and iron silicate minerals. 

magmatism Development and movement of magma (hot mobile rock) within the Earth. 

magnetics Study of the magnetic properties of the Earth. 

malachite A copper-bearing mineral: hydrous copper carbonate, a secondary Cu-mineral. 

Mesozoic Era of geologic time between Palaeozoic and Cainozoic; also strata of that era. 

metamorphosed Altered by heat and pressure [referring to rocks and minerals]. 

metasediments Sediments altered by heat and pressure. 

metasomatism Replacement of one mineral by another - of different chemical composition. 

metavolcanics Volcanic rocks altered by heat and pressure. 

meteorite Extraterrestrial matter which has fallen to Earth. 

MINEDEX Mine site and mineral deposit database of the WA DoIR. 

Mn Manganese, a metallic element. 

Mt Million tons. 

Na Sodium, an alkali metal. 

Nb Niobium, a metallic element. 

nT Nanotesla: geophysical unit of magnetic flux density. 

ounce, oz. (Troy) 31.1 grams; unit of measure for precious metals such as gold, silver & platinum. 

P Phosphorous, a non-metallic element, an undesirable component in iron-ore. 

Paleo-, Meso-, Neo- Old-, Mid-, New -; attributes and subdivisions of geologic eras and periods. 

Paleozoic One of the four eras in the geologic time scale, characterized by old life-forms. 

Pb Lead, a chemical element. 

Pd Palladium, a precious metal from the platinum group elements. 

Permian Permian period [from Perm, in Russia], sixth and last period of the Paleozoic era. 

pipe A steep cylindrical body of rock, such as of kimberlite. 

ppm Parts per million [a measure or grade of concentration]. 

Proterozoic Geologic time before Paleozoic, characterized by the first forms of life; its rocks.

pyrite Iron pyrites, an iron sulphide of the composition FeS 2 . 

pyrrhotite Magnetic pyrites. 

quartz Silicium dioxide, a common rock forming mineral. 

Rb Rubidium, an alkali metal. 

RC Reverse Circulation (drillhole) 

REO Rare Earth Oxides. 

S Sulphur, an element. 

schist Micaceous metamorphic rock, with sub-parallel orientation of its minerals. 

shale A very fine-grained, consolidated and often laminated sediment. 

silicification The introduction of or the replacement by silica (be it quartz or amorphous SiO 2 ). 

siltstone A fine-grained, consolidated sediment, grain-size between sandstone and shale. 

Sr Strontium, a metal. 

stratiform Parallel to composing rock layers. 

stratigraphy Sequence of rocks and/or their description. 

stratum (pl. strata) Layer(s) [of rock]. 

sulphide Compound of sulphur, often a metal-compound. 

syenite Intrusive igneous rock composed largely of alkalic feldspar. 

Tengraph Mining tenement and petroleum title description system at DoIR. 

Tertiary Earlier of the two periods of the Cenozoic era, resp. strata from this period. 

ultrabasic 

(ultramafic) 

Igneous rock of usually dark colour, composed of ferromagnesian silicates, metallic 

oxides and sulphides, containing virtually no quartz or feldspar. 

unconformity Surface of erosion/non-deposition that separates younger strata from older ones. 

WAMEX West Australian Mineral Exploration database of the DoIR. 

Y Yttrium, a rare metal of the cerium group. 

Zn Zinc, a metallic element. 

Zr Zirconium, a metallic element. 


61

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6 - Licensing in Mongolia 

6 - Licensing In Mongolia 

The Company holds a number of projects in 


Mongolia is a young democratic country having 

achieved independence from the Soviet Union in 

1990. After a rocky transition to a market economy 

during the 1990s, punctuated by frequent changes of 

Government, Mongolia started to slowly put in place 

the legal infrastructure to support foreign investment. 

Current legal environment 

The recent Chinese led commodity boom led to a 

debate about how Mongolia should best manage and 

profit from its mineral resources. This led to some 

populist policies that resulted in increasing demands 

for the Government to directly participate in mineral 

projects and changes to legislation governing the 

resources sector that decreased the certainty of 

tenure for Companies. 

Recently Mongolia’s Parliament reacted to the 

increased interest in its country due to its vast 

mineral resource wealth by amending its foreign 

investment law so as to make it more difficult and 

costly for registered foreign invested companies in 

Mongolia. Additionally draft legislation has been 

proposed that defines certain business sectors as 

being “strategic,” thus allowing the State to control 

beneficial ownership of business in these sectors. 

It is believed that certain minerals or large mineral 

mining projects will be regulated by this law. 

In July 2009 Mongolia’s Parliament passed a new 

law regulating uranium separately from other 

minerals under the premise that it was a “strategic” 

mineral. The new legislation allows the State to 

take between 34 to 51 percent of the shares of the 

companies with existing mineral exploration and 

mining licences without payment. This has caused 

uncertainty amongst investors and Mongolia’s 

Constitutional Court is currently reviewing the 

merits of two constitutional challenges that the state 

participation aspect of the legislation is tantamount 

to expropriation or nationalization. 

The flagship Oyu Tolgoi project, owned by Ivanhoe 

Mines Ltd and Rio Tinto Ltd, was central to this debate 

with negotiations over the amount to which the 

Government would participate in or own the project 

leading to a deadlock that lasted until October 2009. 

The recent signing of the Oyu Tolgoi investment 

agreement is seen as a positive sign and it is hoped 

that the easing tensions over foreign investment 

will now abate and lead to a significant increase in 

foreign investment in the country. 

Figure 1: 

Asphalt road leading through GMM licence 14404 towards Russia

Foreign investors 

Mongolia has a foreign investment law that protects 

foreign investors’ rights and gives them equal 

treatment under the law, freedom to repatriate profits, 

and investment agreements that stabilize taxation. 

There are also currency controls in place and all 

transactions for the sale of goods, services or work 

must be expressed and settled in Mongolian National 

Tugrik (“MNT”). 

2006 Revised Minerals Law of Mongolia 

Administration of exploration and mining activity in 

Mongolia is largely the responsibility of the Minerals 

Resource Authority (“MRA”), an administratively 

subordinate agency of the Ministry of Mineral 

Resources and Energy (“MMRE”), in accordance with 

the 2006 Revised Minerals Law of Mongolia (“Minerals 

Law”). Following is a summary of its terms: 

Licencing regime 

Mongolia currently has a two-part licencing 

regime (for all minerals except common minerals 

(construction materials) and uranium) whereby the 

rights to conduct mineral exploration over a licenced 

area are separated from the rights to mine/exploit. 

Exploration licences are granted through a public 

tender for an initial period of three years and are 

renewable for two three-year periods equally a total 

period of nine years. At the end of nine years, an 

exploration licence must be converted into a mining 

licence or the licence-holder must relinquish the 

exploration licence to the State. 

• Only Mongolian legal entities are entitled to hold 

mineral exploration and mining licences. 

• Annual fees are payable with respect to each 

hectare of licenced land and exploration 

licence-holders must satisfy annual expenditure 

requirements to maintain its right to conduct 

exploration activities in the area. Failure to satisfy 

the minimum spend requirements is cause for 

licence revocation. 

• Exploration licence-holders must prepare an 

environmental protection plan on each three 

year renewal period, and report yearly on 

its exploration activities, and environmental 

monitoring in accordance with its environmental 

protection plan, pay a reclamation bond, and 

report on its safety compliance. 

Conversion of Exploration Licences 

• The Minerals Law gives the exploration licenceholder 

an exclusive right to apply for a mining 

licence over the licenced area it previously held 

or a smaller portion of the same. See section 10 

for Risks with respect to the Company’s licenses. 

• The conversion from an exploration to a mining 

licence requires that the exploration licence 

holder submit a minerals reserve estimate to the 

Minerals Professional Council (“MPC”) which 

is an ad-hoc council under the MMRE and its 

subordinate agency MRA. Upon approval of the 

MPC, the exploration licence-holder is required 

to submit a collection of environmental reports, 

maps and pay the required stamp duty. 

• MRA reviews the application, and if all matters 

are in order the exploration licence is converted 

to a mining licence. The initial term of a mining 

licence is thirty years which is extendable for 

two additional twenty year periods where the 

mining licence-holder has no serious incidents of 

environmental violations and the mineral reserve 

supports the extension. 

• The mining licence holder must submit a 

• 

feasibility study for the mining licenced area to 

MRA for approval within 60 days for review by 

the MPC. 

At this stage in the process, the mining licenceholder 

is eligible to execute a pre-mining 

agreement that allows it a three year period in 

which to delay mine development for purposes 

of financing, development, construction, etc. 

During this period, the mining licence-holder is 

requirement to obtain a wide variety of permits 

for construction, water use, settlement relocation, 

communications, chemicals, etc. 

• Prior to commencement of mining activities, 

the mining licence holder is required to 

obtain final approval of an ad-hoc committee 

(“Mine Commission”) whose members are 

jointly appointed by MME and the Ministry 

of Road, Transportation, Construction and 

Urban Development and the Ministry of Nature 

and Tourism prior to the commencement of 

commercial mine operations. 

State Participation in Minerals Deposits of 

Strategic Importance 

The Minerals Law defines certain minerals deposits 

as being of strategic importance. By definition, 

a strategically important minerals deposit is any 

deposit whose scope may have a potential impact 

on national security, national or regional economic 

and social development, or that is producing or has 

the potential to produce more than five percent of 

Mongolia’s total annual Gross Domestic Product. 

Where the government of Mongolia determines that 

the minerals deposit has the potential of having an 

“impact on national security, national or regional 

economic and social development,” or “has the 

potential to produce more than five percent of total 


63

64 

6 - Licensing in Mongolia 

annual Gross Domestic Product,” the State is entitled 

to take a percentage of the shares of the licencing 

holding company. The shared participation in the 

licence-holding company that exploits a minerals 

deposit of strategic importance can be up to 34% 

of the shares where the State has not undertaken 

exploration with State funds in the minerals deposit 

area, or up to 50% of the shares of the licence-holding 

company where the State has used State funds on 

minerals exploration in mineral deposit area. 

At present there are approximately fifteen mineral 

deposits across Mongolia that have been defined 

as being of strategic importance, and none of the 

Company’s projects are on that list. 

Investment Agreements 

A mining licence holder that invests more than 

certain threshold amounts over the first five years 

of a mining project may apply to the Government 

of Mongolia to enter into an investment agreement 

(“Investment Agreement”) concerning the stability of 

tax rates, the right to sell products at international 

market prices, a guarantee that the licence holder 

may receive and dispose of income from such sales, 

and provisions with respect to the amount and term 

of the licence holder’s investment. 

The term of each Investment Agreement will depend 

on the amount of the five-year commitment. 

Royalties 

The Minerals Law provides for a royalty at the rate 

of five percent with respect to the sales value of 

minerals (other than coal and construction minerals) 

that are sold, shipped for sale, or otherwise used. 

The royalty rate for domestically sold coal and 

construction minerals is 2.5%. 

Environmental laws 

Two environmental laws are applicable to the 

Projects: the Law of Mongolia on Environmental 

Protection (“EP Law”) and the Law of Mongolia on 

Environmental Impact Assessments (“EIA Law”). 

The EP Law is the primary law regulating relations 

between the State, citizens, business entities and 

organizations in order to guarantee the human 

right to live in a healthy and safe environment, the 

ecological balance between social and economic 

development, the protection of the environment 

for present and future generations, the proper use 

of natural resources and the restoration of available 

resources. Alternatively, the EIA Law regulates 

relations that arise in connection with the protection 

of the environment, prevention of ecological 

misbalance, use of natural resources, assessment of 

environmental impact and decision-making at the 

start of projects. 

As with all projects (mining or otherwise) undertaken 

in Mongolia that may impact the environment 

or human health, the Projects will be required to 

submit an environmental impact assessment for 

approval by the Ministry of Nature and Environment 

(“MNE”) before implementation of each individual 

Project. Once approved, the individual Project 

will be subject to reporting to, and inspection by, 

the MNE and the State Specialized Inspection 

Authority, and independent agency reporting to 

the Deputy Prime Minister that is responsible for all 

inspection of persons (individuals, companies and 

organizations), with regard to its completion of the 

Project in accordance with the terms of the approved 

environmental impact assessment. 

Law On Prohibit The Exploration And Mining 

Minerals From Beginning Of River Source, and 

the Protection Area Of Water Reservoir Land 

And Wood Reservoir Area (“Water Basin Law”) 

In July 2009, Mongolia’s Parliament passed the 

Water Basin Law which attempts to prohibit 

mineral exploration and/or mining in river basins 

and forested areas. According to the terms of the 

Water Basin Law, the Government must define what 

it determines to be a “water basin” and “forested 

areas.” As yet the Government has not defined 

what is meant by “water basins” and “forested 

areas.” Existing exploration and mining licences in 

those areas will be revoked and the licence-holder 

will be compensated. 

Tax Laws 

In late June/early July 2006, the Mongolian 

Parliament passed new legislation significantly 

amending Mongolia’s tax laws providing for a more 

favourable tax regime for both domestic and foreign 

investors. The package of amended laws consisted 

of new laws concerning business entity income 

tax (“Corporate Tax Law”), personal income tax, 

excise tax and value-added tax (“VAT”) and Law of 

Mongolia On Windfall Tax (“Windfall Profits Tax”). 

Collectively these tax amendments came into effect 

on 01 January, 2007 and 12 May, 2009. 

Corporate Tax Law 

• All income tax rates applicable to business 

entities are 10% on the first three billion MNT 

(approximately US $2 million) and 25% on 

amounts in excess of this amount. In September 

2009, Parliament passed an amendment to the 

Corporate Tax Law that allows for loss-carry 

forward periods of four to eight years which is 

double the current provision. 

• A broad range of business expenses are allowed 

as deductions in calculating taxable income. 

• 10% of invested capital in certain priority sectors 

can be applied as a credit against other taxes 

payable.

VAT Law: 

Subject to certain exemptions and other adjustments, 

a VAT at the rate of 10% is payable to the Mongolian 

State Government with respect to, among other 

things, imported and exported goods and services 

and goods sold and services rendered within 

Mongolia. However, as a general rule almost all 

exports are “zero-rated” (i.e. the VAT rate for exports 

is 0% and the exporter can credit VAT paid to produce 

the exports against other taxes payable). The list of 

exempt imported items changes on an annual basis 

as approved by the Mongolian Government. 

Licence Number Licence Holder Issued date 

1 13846X 

June 27, 2008 

2 13847X June 27, 2008 

3 13848X June 27, 2008 

4 13849X June 27, 2008 

5 

6 

14215X 

14314X 

Golden Cross LLC 

September 17, 2008 

October 17, 2008 

7 14404X November 6, 2008 

8 14598X March 16, 2009 

9 14593X December 30, 2008 

10 15015X July 21, 2009 

Table 1: Licences held by Golden Cross LLC, GMM’s 100% owned subsidiary 

Windfall Profits Tax: 

Mongolia’s Parliament hastily passed the Windfall 

Profits Tax on copper concentrate and gold metal. 

The 68% tax was based on the sales value of copper 

concentrate and gold metal over a threshold market 

price. This past summer, Mongolia’s Parliament 

repealed the Windfall Profits Tax for all purposes 

effective as of January 2011. 

Figure 2: Overlooking Uvs Nuur towards the Atlas Mountains 


65

66 

7 - Independent Solicitor’s Report 


Your Ref: 

Our Ref:SM:90184 

Document377916_2.DOC 


The Board of Directors 

General Mining Corporation Ltd 


Perth WA 6000 

Dear Sirs, 

Solicitors’ Report 

1. INTRODUCTION 

This Report is prepared for inclusion in a prospectus 

to be issued by General Mining Corporation Ltd 

(“Company”) for the issue of up to 40 million fully 

paid ordinary shares at $0.20 each to raise up to $8 

million, to be dated on or about 21 October 2009 

(“Prospectus”). 

This Report relates to Western Australian mining 

tenements and tenement applications (“Tenements”). 

An overview of the Tenements is contained in 

Schedule A which is attached to and forms part of 

this Report. 

This Report also contains a summary of the material 

contracts which affect the Tenements, in Schedule B 

(“Material Contracts”). 

2. SEARCHES 

For the purpose of this Report, we have reviewed 

“Mining Tenement Register Searches” of the 

Tenements provided by the Western Australian 

Department of Mines and Petroleum (“DMP”). The 

DMP searches were conducted on 7 October 2009. 

We have obtained “Quick Appraisal” reports from 

the DMP summarising information available in the 

“TENGRAPH” system maintained by the DMP to 

determine if any native title claims were registered 

over the area of the Tenements. These searches 

were also conducted on 7 October 2009. 

3. OPINION 

As a result of the searches and enquiries, but subject 

to the assumptions and qualifications set out in this 

Report, we are satisfied that, as at the date of the 

relevant searches: 

(a) the details of the Tenements included in 

this Report are accurate as to their status and the 

Company’s interest; and 

(b) where an application for a Tenement has been 

lodged, details included in this Report are accurate. 

4. ASSUMPTIONS and QUALIFICATIONS 

In this Report: 

(a) we have assumed the accuracy and 

completeness of the “Mining Tenement Register 

Searches” and other information obtained from 

DMP; 

(b) we have assumed the accuracy of information 

which has been provided to us by the Company; 

(c) the continued holding of the Tenements is 

subject to compliance with the terms and conditions 

of the relevant legislation and any applicable 

agreements; 

(d) we have assumed the accuracy and 

completeness of any instructions, documents and 

information given by the Company or any of its

officers, agents or representatives; 

(e) with respect to any application for the grant of 

a Tenement, we express no opinion as to whether 

such an application will be granted; 

(f) with respect to applications which are not 

capable of being legally transferred, we have 

assumed a constructive trust as the means by which 

a beneficial interest is created in the application; 

(g) where compliance with the requirements 

necessary to maintain a Tenement in good standing 

is not disclosed on the searches obtained, we express 

no opinion on such compliance; 

(h) where plaints or objections have been lodged 

against the Tenements we make no comment on the 

likelihood of success of such plaints or objections; 

(i) where a tenement has been granted we have 

assumed that the future act provisions of the Native 

Title Act 1993 (Cth) (“NTA”) have been complied 

with; 

(j) references in Schedule A to any area of land 

are taken from details in the searches obtained. It is 

not possible to verify the accuracy of the land area 

without conducting a survey; and 

(k) where Ministerial consent to any agreement or 

dealing in relation to a Tenement is being or will 

be sought, we express no opinion as to whether 

such consent will be granted or the consequences of 

being refused. 

This Report only relates to the mining, native title and 

aboriginal heritage laws applicable to the Tenements 

as at the date of this Report. This Report is limited to 

the matters expressly contained within it. 

5. TENEMENTS GENERALLY 

The Company will acquire the Tenements in 

Schedule A, as a result of entering into the material 

contracts summarised in Schedule B. 

6. LEGISLATION 

The Tenements comprise granted exploration 

licences, prospecting licences and applications for 

exploration licences under the Mining Act 1978 (WA) 

(“Mining Act”). 

Amendments to the Mining Act were passed by 

Parliament on 26 October 2004 and came into effect 

from 10 February 2006. Tenements applied for prior 

to 10 February 2006 are subject to different terms 

and conditions. 

Exploration Licence 

An exploration licence applied for post 10 February 

2006 remains in force for a period of five years and 

may be extended by an initial term of five years and 

by a further period or periods of two years. At the 

end of the initial term, 40 percent of the exploration 

licence must be relinquished or converted to a 

mining lease. 

An exploration licence applied for before 10 February 

2006 remains in force for a period of five years and 

may be extended by a further period or periods 

of one or two years on application. At the end of 

the third year of the licence, half of the exploration 

licence must be relinquished or converted to a 

mining lease. At the end of the fourth year half of 

the remaining licence must again be relinquished or 

converted to a mining lease. 

The holder of an exploration licence may apply for 

a mining lease in relation to the same land (or part 

thereof). If the exploration licence expires prior to 

determination of the Mining Lease application, the 

rights and obligations of the licence apply as if it is 

current until the determination of the Mining Lease 

application. 

An exploration licence cannot be assigned or any 

legal or equitable interest dealt with during the first 

year of its term without the prior written consent of 

the Minister for State Development (“Minister”). 

Applications for Exploration Licences 

Applications for exploration licences are not capable 

of being transferred prior to grant. 

Tenement Conditions 

Tenements are granted subject to various conditions 

prescribed by the Mining Act. The conditions 

regulate the payment of rent and expenditure and 

also reporting requirements. Additional conditions 

may also be imposed, such as those to address 

environmental issues. 

The notes to Schedule A refer to endorsements 

and conditions of particular note and are not an 

exhaustive list of all the applicable conditions relating 

to the Tenements. For a full list of the conditions the 

DMP register should be searched. 

7. LAND ACCESS 

Access to much of the land in Australia for the 

purpose of conducting commercial activities, such 

as mining, is governed by certain Commonwealth 

and State legislation which outlines procedures that 

must be followed to gain access to land and also 

steps that must be taken to ensure that Aboriginal 

sites are protected from any damage. The applicable 

legislation is summarised below. 


67

68 


(a) Native Title 

On 3 June 1992, the High Court of Australia held 

in Mabo v. Queensland (no. 2) that the common 

law of Australia recognises a form of native title. 

The Commonwealth Parliament responded to the 

Mabo decision by passing the NTA which came into 

operation on 1 January 1994. 

(b) Native Title Claim Process 

Persons claiming to hold native title may lodge an 

application for determination of native title with the 

Federal Court. The Federal Court will then refer 

the application to the Native Title Registrar of the 

National Native Title Tribunal (“NNTT”) for the 

application of the registration test. If the Native Title 

Registrar is satisfied that the lodged claim meets the 

registration requirements set out in the NTA, it will 

be entered on the Register of Native Title Claims 

(“Register”) maintained by the NNTT. Registered 

Claimants are given certain procedural rights in 

relation to “Future Acts” under the NTA including 

the “right to negotiate” procedure. 

(c) Future Act Procedures 

A Future Act is a proposed activity or development 

on land and/or waters that may affect native title, 

including the grant of mining or exploration 

tenements granted post 1 January 1994. Claimants’ 

gain the right to negotiate in relation to the grant of 

those interests if their native title claim is registered 

at the time the Government issues a notice (known 

as a section 29 notice), stating it intends to do the act 

(i.e. grant the tenement) or is registered within four 

months of that time. 

Claims which do not meet the registration 

requirements are recorded on the Schedule of 

Applications Received. Such claims may be 

entered on the Register at a later date if additional 

information is provided by the claimant that satisfies 

the Registration Test. 

(d) Right to Negotiate Procedure 

Under the right to negotiate procedures, parties 

are required to negotiate in relation to the grant of 

the proposed Future Act, eg the grant of a mining 

tenement. Negotiations are initiated to obtain the 

agreement of the relevant native title parties to the 

carrying out of the proposed Future Act on the native 

title land. The right to negotiate procedure consists of 

a statutory six month period of negotiation between 

the relevant government party, the native title party 

and the grantee, during which time the parties must 

negotiate in good faith. 

Generally, the grantee party and the registered native 

title claim group come to an agreement in relation 

to the grant of the tenement. If parties cannot reach 

agreement as to the terms of grant, a negotiation 

party may apply to the NNTT (as the arbitral body) 

to make a determination as to whether the grant may 

proceed (and if so, on what conditions). Subject to 

Federal Ministerial intervention the agreement of the 

parties, or the decision of the NNTT, will determine 

whether the mining interest is granted. 

It is important to note that where it is proposed to 

convert from an exploration licence or prospecting 

lease to a mining lease and native title claims are 

lodged and registered, it will be necessary to go 

through the right to negotiate process with any native 

title holders or claimants whose claims are accepted 

for registration at the relevant time, unless the 

Company enters into agreement with the claimants 

relating to conversion. 

(e) Expedited Procedure 

Some Future Acts might have minimal impact 

on the native title rights and interests and many 

qualify for “fast tracking”. This process is known as 

“expedited procedure” and it is State Government 

policy that it will apply to the grant of exploration 

and prospecting licences in Western Australia where 

the applicant has executed a Regional Standard 

Heritage Agreement (“RSHA”) or has an existing 

Alternative Heritage Agreement (“AHA”) in place. In 

the absence of such an agreement the applications 

will be processed under the right to negotiate regime 

(discussed above). 

A RSHA or AHA is drafted to address Aboriginal 

heritage issues on the area the subject of a tenement. 

They generally provides for the native title party to 

withdraw their objection to the expedited procedure 

and consent to the grant of the tenement upon the 

terms of the agreement. Amongst other things, the 

RSHA or AHA will generally require the conduct 

of a heritage survey prior to the conduct of most 

exploration activity. A heritage survey involves 

members of the claim group and generally an 

anthropologist or heritage officer walking over 

the land and discussing the proposed exploration 

activity and its impact on any heritage issues and 

identifying any areas to be protected or excluded 

from some activity. The costs of the survey are met 

by the tenement holder.

If the proposed grant is advertised under the 

expedited procedure, native title parties can lodge 

an objection. An objection by a native title party is 

not an objection to the tenement being granted, but 

is an objection to the application being fast-tracked. 

If there is no objection lodged, the tenement can be 

granted. If an objection is lodged to the grant of the 

tenement under the expedited procedure, the parties 

may either negotiate and reach agreement, or apply 

to the NNTT for a determination. 

Some claimant groups will lodge an objection 

despite a RSHA being executed. Generally this 

is because they will seek a more ‘favourable’ 

agreement. In these circumstances it is open to 

the tenement applicant to agree to additional terms 

with the claimant group, or apply to the NNTT for 

a determination. Generally, where the applicant has 

executed a RSHA or AHA and there are no registered 

sites in the area of the tenement then the NNTT will 

determine the tenement can be granted. 

(f) Native Title Status of the Tenements 

The Tenements relate to land which is currently 

the subject of native title claims and native title 

determinations. Those claims and determinations 

are identified in Schedule A. It is also possible that 

additional claims may be made in the future over the 

area of the Tenements. 

Some of the tenements also relate to Aboriginal 

Reserve Land. These are identified in Schedule A and 

a summary of the terms of the Deed of Agreement 

relating to the area is contained in Schedule B. 

In relation to granted or live tenements we presume 

that the future act provision of the NTA have been 

complied with prior to grant, where we have been 

provided with heritage or native title agreements 

in relation to the tenement they are identified in 

Schedule A. Where the heritage agreements contain 

terms broader than those contained in the RSHA’s a 

summary of the agreement is included in Schedule B 

or where further monies are payable they are noted 

in Schedule A. 

In relation to the tenement applications, where we 

have been advised by the Company that heritage 

agreements have been received but not yet executed 

by the Company, we presume that the tenement 

holders are in the process of negotiating agreements 

in relation to their grant. This is noted in Schedule A. 

To the extent that native title has not been 

extinguished with respect to the underlying land, 

it is important to note that where it is proposed to 

convert from an exploration or prospecting licence 

to a mining lease and native title claims are lodged 

and registered, it will be necessary to go through 

the right to negotiate process with any native title 

holders or claimants whose claims are accepted for 

registration at the relevant time, unless the Company 

enters into agreement with the claimants relating to 

conversion. 

We have not undertaken the considerable historical, 

anthropological and ethnographic work that would 

be required to determine the likelihood that existing 

native title claims may be successful, or the possibility 

of any further native title claims being made in the 

future. In addition, we have not undertaken any 

investigations that would determine the content of 

any individual rights claimed in or under any native 

title claim over the Tenements. 

(g) Protection of Aboriginal Sites 

Tenements in Western Australia are granted subject 

to an endorsement reminding the tenement holder 

of its obligation to comply with the requirements of 

the Aboriginal Heritage Act 1972 (WA) (“Heritage 

Act”). 

The Heritage Act protects sites and areas of 

significance to Aboriginal people. The Minister of 

Indigenous Affair’s consent is required where any 

use of land is likely to result in the excavation of 

or damage to an Aboriginal site or any object on or 

under that site. 

There is no requirement or need for a site to be 

registered in any public manner or be in any way 

acknowledged as an Aboriginal site for it to qualify 

as an Aboriginal site for the purposes of the Heritage 

Act. A register of sites is maintained by the Aboriginal 

Affairs Department of Western Australia. 

We have not conducted a search of that register 

for the purposes of this Report. The Heritage Act 

applies to all Aboriginal sites and objects, whether or 

not they are registered under the Heritage Act. 

In respect of any Aboriginal sites that are ultimately 

identified on any of the Tenements, the Company 

will need to ensure that any interference with such 

sites is in strict conformity with the provisions of the 

Heritage Act. 

The Commonwealth Aboriginal and Torres Strait 

Islander Heritage Protection Act 1984 also afford 

some protection to Aboriginal sites. 


69

70 


This Act applies to all of the Tenements and is aimed 

at the preservation and protection from desecration 

of significant Aboriginal areas and significant 

Aboriginal objects. An area or object is found to 

be desecrated if it is used or treated in a manner 

inconsistent with Aboriginal tradition. 

We have not conducted any searches in this regard. 

8. MATERIAL CONTRACTS SUMMARY 

We have examined the Material Contracts relevant to 

the Tenements, a summary of which is contained in 

Schedule B to this Report. We have assumed: 

(a) that the Material Contracts have been duly 

executed and have been, or are, in the course of 

being stamped and lodged in compliance with the 

relevant legislation; 

(b) the authenticity of all seals and signatures; 

(c) all of the Material Contracts are within the 

capacity and powers of, and have been validly 

authorised, executed and delivered by and are 

binding on each of the parties to them; 

(d) the Material Contracts comprise the entire 

agreement of the parties with respect to the subject 

matter of the Material Contract; and 

(e) each party to the Material Contracts had, and 

has full corporate power and authority to observe 

and perform all of its obligations under the Material 

Contracts. 

9. CONSENTS 

This Report is provided solely for the benefit of 

the Company and the directors of the Company in 

connection with the issue of the Prospectus and is 

not to be relied on or disclosed to any other person 

or used for any other purpose or quoted or referred 

to in any public document without our prior written 

consent. 

Allion Legal consents to being named in this 

Prospectus as the authors of this Report. 

Allion Legal has given, and has not before the 

lodgement of this Prospectus, withdrawn its consent 

to the inclusion of this Report in the Prospectus. 

10. DISCLOSURE OF INTEREST 

Allion Legal will be paid normal and usual 

professional fees for the preparation of this Report 

and related matters, as set out elsewhere in the 

Prospectus. 

Yours faithfully 

ALLION LEGAL

SCHEDULE A - TENEMENTS 

Tenement 

Number and 

Type 

Registered Holder/ 

Applicant 

Application 

Date 

Grant Date Expiry Date Encumbrances Tenement 

Notes 

E69/1869 Galaxy Resources Ltd 15.06.06 14.06.11 A. 1, 8 



Native 

Title 

Notes 

E69/2369 Quaalup Investments 

Pty Ltd 

17.01.08 16.1.13 

ELA69/2616 General Mining Corp. 

Ltd 

21.04.09 10 


Ltd 

22.06.09 


Ltd 

22.06.09 2 


Pty Ltd 

8.09.08 7.09.13 a, b 3,7 


Pty Ltd 

8.09.08 7.09.13 a,b 3,7 

ELA80/3986 Quaalup Investments 

Pty Ltd 

29.06.07 4, 10 

E80/3663 Pegmont Mines NL 16.09.08 15.09.13 c 5,6, 9 

E80/3662 Pegment Mines NL 7.02.08 6.02.13 c, d 

Encumbrances 

A. Application for exemption from drop off lodged but not yet determined. 

Tenement Notes 

a. The prior written consent of the Minister responsible for the Mining Act 1978 must be obtained 

before commencing any exploration activities on the Use and Benefit of Aboriginal Inhabitants 

Reserve 40783. 

b. Entry on Use and Benefit of Aboriginal Inhabitants Reserve 40783 and activities undertaken 

on the licence by any non-Aboriginal lessee, licensee, employee, contractor or agent must be 

authorised by an entry permit issued under the provisions of the Aboriginal Affairs Planning 

Authority Act 1972. 

c. Subject to additional conditions under the Waters and Rivers Commissions Act 1995 and Rights 

in Water and Irrigation Act 1914. 

d. Consent to mine on Regeneration of Eroded Areas in Ord River Reserve No 28538 is subject to 

additional conditions. 


71

72 


Native Title Notes 

1. Wiluna Native Title Claim (NNTT no WC99/24). 

2. Mirning Native Title Claim (NNTT no WC01/001). 

3. Kiwirrurra Native title Determination (FederalCourt No WAD6019_98). 

4. Ngururrpa Native Title Determination (Federal Court No WC06/05). 

5. Malarngowen Native Title Claim (NNTT no WC99/44). 

6. Purnululu Native Title Claim (NNTT no WC94/011). 

7. Deed of Agreement between Tjamu Tjamu (Aboriginal Corporation), Ngaanyatjarra Land Council 

(Aboriginal Corporation) and Quaalup Investments Pty Ltd undated. It is our understanding that the 

agreement was dated on or about November 2007. 

8. Heritage Agreement between Dusty Stevens, Jimmy Morgan, Friday Jones and Gaalxy Resources 

Limited dated 24 August 2005. 

9. Native Title, Heritage Protection and Mineral Exploration Agreement for Purnululu Lands between 

Kimberly Land Council Aboriginal Corporation and Pegmont Mines NL dated 10 July 2008. In addition 

to the standard heritage survey requirements this agreement requires the tenement holder to pay 

to the Traditional Owners an annual amount equivalent to two and a half percent of the Minimum 

Annual Expenditure on the tenement. 

10. Heritage Agreements have been provided to the tenement holder but then have not, as yet, been 

executed. 

SCHEDULE B - MATERIAL CONTRACTS 

AFFECTING THE TENEMENTS 

Deed of Agreement between Tjamu Tjamu 

(Aboriginal Corporation), Ngaanyatjarra Land Council 

(Aboriginal Corporation) and Quaalup Investments 

Pty Ltd dated on or about November 2007 

This Deed provides for consent to the grant of 

E80/3887 and E80/3985 (“Deed Tenements”) under 

the NTA, the Mining Act and the Aboriginal Affairs 

Planning Authority Act 1972. The land the subject 

of the Deed Tenements is Aboriginal Reserve Land 

and is leased by the Aboriginal Land Trust to the 

Ngaanyatjarra Land Council. It is also the subject of 

a determination that the Tjamu Tjamu (Aboriginal 

Corporation) holds native title rights and interests 

over the area on behalf of the common law holders. 

The Deed provides for consent to the grant of the 

Deed Tenements and any replacement tenement, 

including the grant of a mining lease over the area of 

the Deed Tenement, subject to the tenement holder 

complying with the terms of the Deed. 

The Deed requires, amongst other things, the 

tenement holder to pay to the Land Council $20,000 

on execution, $50,000 within seven days of the first 

anniversary of the Deed, and annual payments from 

the second anniversary of the Deed of $75,000. In 

addition the tenement holder is obliged to pay to the 

Land Council 5% of the total exploration expenditure 

for the year where that amount would exceed the 

annual payment made to the Land Council. 

In addition the Deed places heritage survey obligation 

on the tenement holder (all costs of the surveys 

being met by the tenement holder); environmental 

protection and rehabilitation obligations including 

the use of monitoring teams; and obligations to use 

best endeavours to employ and give contractual 

preference to members of the native title group. 

The Deed also provides that the tenement holder 

will not to lodge an application under s18 of the 

Aboriginal Heritage Act without the consent of the 

Land Council. 

Tenement sale agreement for acquisition 

from Quaalup Investments Pty Ltd dated 19 

December 2007 

Under the tenement sale agreement, Quaalup 

has agreed to sell exploration licence applications 

E80/3887, E80/3985, E80/3986, E69/2369, E45/3086, 

E45/3087 and E45/3012 to the Company in 

consideration for the issue of 3,700,000 Shares and 

1,800,000 Options each with an exercise price of 

$0.20 and an expiry dated of three years from the 

date of grant. Completion occurred on or about 20

December 2007. Pending grant, Quaalup holds the 

applications on trust. 


from Niraan Punnya de Silva dated 19 

December 2007 

Under the tenement sale agreement, Niraan de Silva 

has agreed to sell exploration licence applications 


consideration for the issue of 300,000 Shares and 

150,000 Options each with an exercise price of 


date of grant. Completion occurred on or about 

20 December 2007. Pending grant, Niraan de Silva 

holds the applications on trust. 


from Pegmont Mines, R Wanless, M Dowling 

and D Dowling dated 19 January 2008 

Under the tenement sale agreement, the vendors 

have agreed to sell exploration licence applications 


consideration for the issue of 1,000,000 Shares and 

1,000,000 Options each with an exercise price of 


date of grant. Completion occurred on or about 20 

December 2007. Pending grant, the vendors hold 

the applications on trust. 

Tenement sale agreement – acquisition 50% 

Shoemaker project from Galaxy Resources 

Limited dated 30 June 2009 

Under the tenement sale agreement, Galaxy has 

agreed to sell a 50% interest in exploration licences 

E69/1869-I, E69/1870 and E69/1871-I and all relevant 

mining information in consideration for $100,000, 

5,000,000 Shares and 2,500,000 Options each with 

an exercise price of $0.20 and an expiry date three 

years from completion of the sale. Completion is 

conditional upon, amongst other things, in principle 

approval for the Company to either be admitted to 

the Official List of the ASX or completing a capital 

raising of $3,000,000. 

Joint venture agreement Shoemaker 

project with Galaxy Resources Limited 

dated 30 June 2009 

The parties agree to establish an unincorporated joint 

venture to explore exploration licences E69/1869-I, 

E69/1870 and E69/1871-I with effect from the 

Company acquiring an interest in those licences. 

The Company will manage and sole fund all 

exploration costs until completion of a definitive 

feasibility study. The Company will also be required 

to contribute to all remaining joint venture costs on 

a pro rata basis to its participating interest. A party 

may withdraw from the joint venture upon no less 

than 20 business days prior to the completion of a 

current expenditure program. 

Galaxy and the Company have agreed that, if the 

Company spends $1,000,000 of the exploration 

costs within the first two years, it will increase its 

participating interest to 80% interest. Following 

a decision to mine, Galaxy must elect to either 

contribute to mining or offer its interest to the 

Company at a purchase price to be agreed to 

determined by an independent expert. 

The joint venture agreement contains the usual preemptive 

rights and default clauses ordinarily found 

in an agreement of its nature. 


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8 - Independent Accountant’s Report 



The Directors 



PERTH WA 6000 

Dear Sirs 

RE: INVESTIGATING ACCOUNTANT’S REPORT 

1. Introduction 

This report has been prepared at the request of the Directors of General Mining Corporation Limited (“GMM” or “the 

Company”) for inclusion in a Prospectus to be dated on or around 16 November 2009 (“the Prospectus”) relating 

to the proposed issue by GMM of 40,000,000 shares to be issued at a price of 20 cents per share to raise up to 

$8,000,000. The minimum subscription is $4,000,000 (20,000,000 shares). 

2. Basis of Preparation 

This report has been prepared to provide investors with information on historical results, the statement of financial 

position (balance sheet) of GMM and the pro-forma consolidated statement of financial position of GMM as noted 

in Appendix 2. The historical and pro-forma financial information is presented in an abbreviated form, insofar as 

it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial 

reports in accordance with the Corporation Act 2001. This report does not address the rights attaching to the 

securities to be issued in accordance with the Prospectus, nor the risks associated with the investment. Stantons 

International Securities has not been requested to consider the prospects for the GMM Group, the securities on offer 

and related pricing issues, nor the merits and risks associated with becoming a shareholder and accordingly, has 

not done so, nor purports to do so. Stantons International Securities accordingly takes no responsibility for those 

matters or for any matter or omission in the Prospectus, other than responsibility for this report. Risk factors are set 

out in Section 10 of the Prospectus.

3. Background 

GMM was incorporated on 31 May 2007 as General 

Mining Corporation Pty Ltd. The initial capital issued 

to the promoters was 3,000,000 shares and in the 

year ended 30 June 2007 a further 100,000 shares 

were issued to raise $5,000. The Company converted 

to a public company and altered its constitution in 

November 2007. 

During the year ended 30 June 2008, the Company 

has issued a total of 4,500,000 shares to seed 

capitalists to raise a gross $225,000 and also issue a 

further 5,000,000 shares at 5 cents each ($250,000) 

as a result of acquiring new mineral tenements in 

Australia. During the year ended 30 June 2009, the 

Company issued 5,900,000 shares at 10 cents each 

to seed investors to raise a gross $590,000. A 

further 300,000 shares and 300,000 share Options 

(Options issued in October 2009) were issued to a 

broker as capital raising costs ($43,770) and a further 

200,000 shares were issued to extinguish a liability 

of $20,000. In September 2009, the Company issued 

a further 3,000,000 shares at 12 cents each to raise 

a gross $360,000. As part of the latter capital raising 

it was agreed to issue 100,000 shares and 100,000 

share Options, exercisable at 20 cents each on or 

before 31 August 2014 to a Broker as capital raising 

costs of $17,870. 

In the year ended 30 June 2008 GMM formed a 

subsidiary named Golden Cross Company LLC 

(“Golden Cross) incorporated in Mongolia for 

$11,000. Golden Cross has pegged and applied for 

various mineral tenement concessions in Mongolia. 

200,000 shares were issued to a third party once 

certain Mongolian tenements were granted to 

Golden Cross. 

The Company in October 2009 entered into an 

employment contract with Dr. Boris Matveev 

(“Matveev”) to act as the Managing Director of the 

Company. The basic terms (from 1 January 2010) 

are to be a salary of $220,000 inclusive of statutory 

superannuation from 1 January 2010. Six months 

notice is required by either party to terminate the 

employment. In the meantime, he is providing part 

time consultancy services to the Company at a daily 

rate of $1,000. Subject to shareholder approval, 

Matveev is to be granted 1,500,000 Options 

exercisable at 20 cents each, on or before 2 years 

from grant date, 1,500,000 Options exercisable at 40 

cents each, on or before 2 years from grant date and 

1,500,000 Options exercisable at 60 cents each, on 

or before 2 years from grant date. The Options will 

lapse in the event of the termination of the Executive 

Agreement. 

In July 2009, the Company signed a tenement sale 

agreement and a joint venture agreement with Galaxy 

Resources Limited (“Galaxy”) whereby the Company 

will acquire a 50% interest in the Shoemaker Iron Ore 

Project by paying Galaxy $100,000 in cash and the 

issue of $1,000,000 of shares in GMM at a deemed 20 

cents per share (5,000,000 shares). In addition GMM 

will issue 2,500,000 share Options to Galaxy as part 

of the acquisition cost and each share option is to 

be exercisable at 20 cents each, on or before 3 years 

from issue date. The value ascribed to the issue 

of the share Options to Galaxy is $170,000. GMM 

can earn a further 30% interest in the Shoemaker 

Iron Ore Project through expenditure of $1,000,000 

within two years. The acquisition is subject to GMM 

completing a capital raising of $3,000,000 or GMM 

successfully lists on the ASX. GMM is to sole fund 

expenditure until such time a feasibility study is 

completed and if this eventuates, Galaxy will then 

contribute its proportional share of joint venture 

costs. 

Potential investors should read the Prospectus in full 

that includes two Independent Consulting Geologist’s 

Reports (one on Australian tenements and the other 

on Mongolian tenements) and an Independent 

Solicitors’ Report. We make no comments as to 

ownership or values of the current and proposed 

mineral tenement interests of the GMM Group. 

Further details on all significant contracts entered into 

by the Company since incorporation are referred to 

in the Independent Solicitors’ Report included in the 

Prospectus. 

4. Scope of Examination 

You have requested Stantons International Securities 

to prepare an Independent Accountant’s Report on: 

a) The consolidated results (statement of financial 

performance) of the GMM Group for the year ended 

30 June 2009; 

b) The consolidated statement of financial position 

of GMM as at 30 June 2009; and 

c) The consolidated pro-forma statement of 

financial position of GMM at 30 June 2009 adjusted 

to include funds to be raised by the Prospectus and 

the completion of transactions referred to in note 2 

of Appendix 3. 

All of the financial information referred to above has 

not been audited however has been subject to audit 

review. The Directors of GMM are responsible for 

the preparation and presentation of the historical 

and pro-forma financial information, including the 


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76 


determination of the pro-forma transactions. We 

have however examined the financial statements and 

other relevant information and made such enquiries, 

as we considered necessary for the purposes 

of this report. The scope of our examination 

was substantially less than an audit examination 

conducted in accordance with Australian Auditing 

Standards and accordingly, we do not express such 

an opinion. Our examination included: 

a) Discussions with Directors and other key 

management of GMM; 

b) Review of contractual arrangements; 

c) A review of publicly available information; and 

d) A review of work papers, accounting records and 

other documents. 

5. Opinion 

In our opinion, the pro-forma consolidated statement 

of financial position as set out in Appendix 2 

presents fairly, the pro-forma consolidated statement 

of financial position of GMM as at 30 June 2009 in 

accordance with the accounting methodologies 

required by Australian Accounting Standards on 

the basis of assumptions and transactions set out 

in Appendix 3. No opinion is expressed on the 

historical results and statements of financial position, 

as shown in Appendix 1, except to state that nothing 

has come to our attention which would require any 

further modification to the financial information 

in order for it to present fairly, the statements of 

financial position as at 30 June 2009 and the results 

of the period identified. 

To the best of our knowledge and belief, there have 

been no other material items, transactions or events 

subsequent to 30 June 2009 that have come to our 

attention during the course of our review which 

would cause the information included in this report 

to be misleading. 

6. Other Matters 

At the date of this report, Stantons International 

Securities or Stantons International do not have any 

material interest in GMM either directly or indirectly, 

or in the outcome of the offer. Stantons International 

were appointed as auditors of GMM in November 

2008. Stantons International Securities and Stantons 

International were not involved in the preparation 

of any other part of the Prospectus, and accordingly, 

make no representations or warranties as to the 

completeness and accuracy of any information 

contained in any other part of the Prospectus. 

Stantons International Securities consents to the 

inclusion of this report (including Appendices 1 to 3) 

in the Prospectus in the form and content in which 

it is included. At the date of this report, this consent 

has not been withdrawn. 

Yours faithfully 

STANTONS INTERNATIONAL SECURITIES 

J P Van Dieren - FCA 

Director

Investigating Accountant’s Report 

APPENDIX 1 – UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE 

GMM Consolidated 

Year ended 30 June 2009 

$ 

Interest income 72 

Foreign exchange losses (15,218) 

General, consulting and administration costs (56,210) 

Depreciation (687) 

Consultancy and secretarial costs (133,708) 

Employee/Director costs (212,923) 

Exploration costs written off (498,240) 

International travel and other costs (49,249) 

Net (loss) before tax (966,163) 

Income tax expense attributable to net loss - 

Net (loss) after tax (966,163) 

APPENDIX 2 – UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 

Note GMM Consolidated 

30 June 2009 - $ 

Pro-forma GMM Consolidated 

30 June 2009 - $ 

Current Assets 

Cash assets 3 104,953 7,411,005 

Receivables 4 18,210 18,210 

Total Current Assets 123,163 7,429,215 

Non Current Assets 

Capitalised acquisition costs 5 - 1,270,000 

Investments 6 - - 

Fixed assets 10,939 8,000 

Total Non Current Assets 10,939 1,278,000 

Total Assets 134,102 8,707,215 

Current Liabilities 

Trade and other payables 7 272,706 - 

Short term borrowings 8 13,721 - 

Total Current Liabilities 

Non Current Liabilities 

286,427 - 

Owing to GMM 6,14 - - 

Total Non Current Liabilities - - 

Total Liabilities 286,427 - 

Net Assets (Liabilities) (152,325) 8,707,215 

Equity 

Issued capital 8 1,074,360 9,934,049 

Option Reserve 9 16,843 274,633 

Translation reserve 26,435 26,435 

Accumulated losses 10 (1,269,963) (1,527,902) 

Total Equity (Deficiency) (152,325) 8,707,215 


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APPENDIX 3 

NOTES TO THE UNAUDITED STATEMENT 

OF FINANCIAL PERFORMANCE AND 

STATEMENTS OF FINANCIAL POSITION 

1. Statement of Significant Accounting 

Policies 

(a) Basis of Accounting 

The unaudited consolidated Statement of Financial 

Performance and unaudited consolidated Statements 

of Financial Position have been prepared in 

accordance with applicable accounting standards, the 

Corporations Act 2001 and mandatory professional 

reporting requirements in Australia (including the 

Australian equivalents of International Financial 

Reporting Standards) and we have made such 

disclosures as considered necessary. They have also 

been prepared on the basis of historical cost and do 

not take into account changing money values. The 

accounting policies have been consistently applied, 

unless otherwise stated. The financial statements 

have been prepared on a going concern basis that is 

dependent on the IPO being successful and/or the 

Company raising additional seed capital to continue 

in business. 

(b) Income Tax 

The charge for current income tax expense is based on 

the profit for the year adjusted for any non assessable 

or disallowed items. It is calculated using tax rates 

that have been enacted or are substantially enacted 

as at balance date. Deferred tax is accounted for 

using the balance sheet liability method in respect of 

temporary differences arising between the tax bases 

of assets and liabilities and their carrying amounts in 

the financial statements. No deferred income tax will 

be recognised from the initial recognition of an asset 

or liability, excluding a business combination, where 

there is no effect on accounting or taxation profit 

or loss. Deferred income tax assets are recognised 

to the extent that it is probable that the future tax 

profits will be available against which deductible 

temporary differences will be utilised. The amount 

of the benefits brought to account or which may be 

realised in the future is based on the assumption that 

no adverse change will occur in the income taxation 

legislation and the anticipation that the economic 

unit will derive sufficient future assessable income 

to enable the benefits to be realised and comply 

with the conditions of deductibility imposed by law. 

(c) Exploration, Evaluation and Development 

Expenditure 

Expenditure incurred during exploration and the 

early stages of evaluation of new areas of interest 

and costs of acquisition is capitalised to areas of 

interest and carried forward where right of tenure 

of the area of interest is current and they are 

expected to be recouped through sale or successful 

development and exploitation of the area of interest 

or, where exploration and evaluation activities in the 

area of interest have not yet reached a stage that 

permits reasonable assessment of the existence of 

economically recoverable reserves. When an area 

of interest is abandoned or the directors decide 

that it is not commercial, any accumulated costs in 

respect of that area are written off in the financial 

period the decision is made. Each area of interest is 

also reviewed at the end of each accounting period 

and accumulated costs written off to the extent that 

they will not be recoverable in the future. Where 

projects have advanced to the stage that directors 

have made a decision to mine, they are classified as 

development properties. When further development 

expenditure is incurred in respect of a development 

property, such expenditure is carried forward as part 

of the cost of that development property only when 

substantial future economic benefits are established. 

Otherwise such expenditure is classified as part of the 

cost of production or written off where production 

has not commenced. 

(d) Plant and Equipment 

Each class of property, plant and equipment is carried 

at cost or fair value, less where applicable, any 

accumulated depreciation and impairment losses. 

The carrying amount of the plant and equipment is 

reviewed annually by the Directors to ensure it is not 

in excess of the recoverable amount of these assets. 

The recoverable amount is assessed on the basis of 

the expected net cash flows that will be received 

from the assets employed and their subsequent 

disposal. The expected net cash flows have been 

discounted to their present value in determining 

recoverable amounts. 

Depreciation 

The depreciable amount of all fixed assets including 

buildings and capitalised leased assets, but excluding 

freehold land, is depreciated on a straight line basis 

over their useful lives to the Company commencing 

from the time the asset is held ready for use. The 

asset’s residual value and useful lives are reviewed 

and adjusted if appropriate, at each balance sheet 

date. 

An asset’s carrying value is written down immediately 

to its recoverable amount if the asset’s carrying value 

is greater than the estimated recoverable amount. 

Gains and losses on disposal are determined by 

comparing proceeds with the carrying amount.

These gains and losses are included in the income 

statement. 

(e) Trade and other accounts payable 

Trade and other accounts payable represent the 

principal amounts outstanding at balance date, plus, 

where applicable, any accrued interest. 

(f) Recoverable Amount of Non Current Assets 

The carrying amounts of non-current assets are 

reviewed annually by Directors to ensure they are 

not in excess of the recoverable amounts from those 

assets. The recoverable amount is assessed on the 

basis of the expected net cash flows, which will be 

received from the assets employed and subsequent 

disposal. The expected net cash flows have been or 

will be discounted to present values in determining 

recoverable amounts. 

(g) Operating Revenue 

Revenue represents interest received and 

reimbursements of exploration expenditures. 

(h) Issued Capital 

Ordinary Shares are classified as equity. 

Incremental costs directly attributable to the issue 

of new shares or Options are shown in equity as a 

deduction, net of tax, from the proceeds. Incremental 

costs directly attributable to the issue of new shares 

or Options, or for the acquisition of a business, are 

included in the cost of the acquisition as part of the 

purchase consideration. 

(i) Principles of Consolidation 

The consolidated financial statements comprise the 

financial statements of GMM and its subsidiary (“the 

Group”). The financial statements of the subsidiary 

are prepared for the same reporting period as 

the parent company, using consistent accounting 

policies. 

Adjustments are made to bring into line any dissimilar 

accounting policies that may exist. All intercompany 

balances and transactions, including unrealised 

profits arising from intra-group transactions, 

have been eliminated in full. Unrealised losses 

are eliminated unless costs cannot be recovered. 

Subsidiaries are consolidated from the date on 

which control is transferred to the Group and cease 

to be consolidated from the date on which control 

is transferred out of the Group. Where there is loss 

of control of a subsidiary, the consolidated financial 

statements include the results for the part of the 

reporting period during which GMM has control. 

(j) Employee benefits 

Provision is made for employee benefits accumulated 

as a result of employees rendering services up to the 

reporting date. These benefits include wages and 

salaries, annual leave, and long service leave. 

Liabilities arising in respect of wages and salaries, 

annual leave and any other employee benefits 

expected to be settled within twelve months of 

the reporting date are measured at their nominal 

amounts based on remuneration rates which are 

expected to be paid when the liability is settled. All 

other employee benefit liabilities are measured at the 

present value of the estimated future cash outflow 

to be made in respect of services provided by 

employees up to the reporting date. In determining 

the present value of future cash outflows, the market 

yield as at the reporting date on national government 

bonds, which have terms to maturity approximating 

the terms of the related liability, are used. 

(k) Share Based Payments 

The Group provides benefits to employees (including 

Directors) of the Group in the form of share-based 

payment transactions, whereby employees render 

services in exchange for shares or rights over 

shares (“equity-settled transactions”). The cost of 

these equity-settled transactions with employees is 

measured by reference to the fair value at the date at 

which they are granted. The fair value is determined 

by an internal valuation using Black-Scholes or 

Binomial option pricing models. 

The cost of equity-settled transactions is recognised, 

together with a corresponding increase in equity, 

over the period in which the performance 

conditions are fulfilled, ending on the date on 

which the relevant employees become fully entitled 

to the award (“vesting date”). The cumulative 

expense recognised for equity-settled transactions 

at each reporting date until vesting date reflects (i) 

the extent to which the vesting period has expired 

and (ii) the number of awards that, in the opinion 

of the directors of the Group, will ultimately vest. 

This opinion is formed based on the best available 

information at balance date. No adjustment is made 

for the likelihood of market performance conditions 

being met as the effect of these conditions is included 

in the determination of fair value at grant date. 

No expense is recognised for awards that do not 

ultimately vest, except for awards where vesting 

is conditional upon a market condition. Where 

an equity-settled award is cancelled, it is treated 

as if it had vested on the date of cancellation, and 

any expense not yet recognised for the award is 

recognised immediately. However, if a new award is 

substituted for the cancelled award, and designated 

as a replacement award on the date that it is granted, 

the cancelled and new award are treated as if they 

were a modification of the original award. 


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(l) Critical accounting estimates & judgements 

In preparing this Financial Report, the Company 

has been required to make certain estimates and 

assumptions concerning future occurrences. There is 

an inherent risk that the resulting accounting estimates 

will not equate exactly with actual events and results. 

Significant accounting judgements 

In the process of applying the Group’s accounting 

policies, management has made the following 

judgements, apart from those involving estimations, 

which have the most significant effect on the 

amounts recognised in the financial statements: 

Capitalisation of exploration and evaluation 

expenditure 

The Group has capitalised significant exploration and 

evaluation expenditure on the basis either that this is 

expected to be recouped through future successful 

development (or alternatively sale) of the Areas 

of Interest concerned or on the basis that it is not 

yet possible to assess whether it will be recouped. 

Significant accounting estimates and 

assumptions 

The carrying amounts of certain assets and 

liabilities are often determined based on estimates 

and assumptions of future events. The key 

estimates and assumptions that have a significant 

risk of causing a material adjustment to the 

carrying amounts of certain assets and liabilities 

within the next annual reporting period are: 

Impairment of capitalised exploration and 

evaluation expenditure 

The future recoverability of capitalised exploration 

and evaluation expenditure is dependent on an 

number of factors, including whether the Company 

decides to exploit the related lease itself, or, if 

not, whether it successfully recovers the related 

exploration and evaluation asset through sale. 

Factors that could impact the future recoverability 

include the level of reserves and resources, 

future technological changes, costs of drilling and 

production, production rates, future legal changes 

(including changes to environmental restoration 

obligations) and changes to commodity prices. As 

at 30 June 2009, the carrying value of capitalised 

exploration and evaluation expenditure is $nil 

(m) Investments and other financial assets 

The Company classifies its investments in the 

following categories: financial assets at fair value 

through profit and loss, loans and receivables, 

held-to-maturity investments and available-for-sale 

financial assets. The classification depends on the 

purpose for which the investments were acquired. 

Management determines the classification of its 

investments at initial recognition and, in the case of 

assets classified as held-to-maturity, re-evaluates this 

designation at each reporting date. 

Financial assets at fair value through profit and 

loss 

Financial assets at fair value through profit and loss 

are financial assets held for trading. A financial asset 

is classified in this category if acquired principally 

for the purpose of selling in the short term. Assets 

in this category are classified as current assets. 

Loans and receivables 

Loans and receivables are non-derivative financial 

assets with fixed or determinable payments that are 

not quoted in an active market. They are included 

in current assets, except for those with maturities 

greater than 12 months after the balance sheet date 

which are classified as non-current assets. Loans 

and receivables are included in trade and other 

receivables in the statement of financial position. 

Held-to-maturity investments 

Held-to-maturity investments are non-derivative 

financial assets with fixed or determinable 

payments and fixed maturities that the Company’s 

management has the positive intention and ability 

to hold to maturity. Held-to-maturity investments 

are included in non-current assets, except for 

those with maturities less than 12 months from the 

reporting date, which are classified as current assets. 

Available-for-sale financial assets 

Available-for-sale financial assets, comprising 

principally marketable equity securities, are nonderivatives 

that are either designated in this category 

or not classified in any of the other categories. They 

are included in non-current assets unless management 

intends to dispose of the investment within 12 

months of the statement of financial position date. 

Recognition and derecognition 

Regular purchases and sales of financial assets are 

recognised on trade date – the date on which the 

Company commits to purchase or sell the asset. 

Investments are initially recognised at fair value plus 

transaction costs for all financial assets not carried

at fair value through profit or loss. Financial assets 

carried at fair value through profit or loss are initially 

recognised at fair value and transaction costs are 

expensed to the statement of financila performance. 

Financial assets are derecognised when the rights 

to receive cash flows from the financial assets have 

expired or have been transferred and the Company 

has transferred substantially all the risks and rewards 

of ownership. 

When securities are classified as availablefor-sale 

are sold, the accumulated fair value 

adjustments recognised in equity are included 

in the statement of financial performance as 

gains and losses from investment securities. 

Subsequent measurement 

Loans and receivables and held-to-maturity 

investments are carried at amortised cost using the 

effective interest method. 

Available-for-sale financial assets at fair value through 

profit or loss are subsequently carried at fair value. 

Gains or losses arising from changes in the fair value 

of the “financial assets at fair value through profit or 

loss” category are presented in the income statement 

within other income or other expenses in the period 

in which they arise. 

Income from financial assets at fair value through 

profit and loss is recognised in the income statement 

as part of income from continuing operations when 

the Company’s right to receive payment is established. 

Fair value 

The fair values of quoted investments are based on 

last trade prices. If the market for financial assets is 

not active (and for unlisted securities), the Company 

establishes fair value by using valuation techniques. 

(n) Foreign currencies 

Functional and presentation currency 

Items included in the financial statements of each 

of the Company’s entities are measured using the 

currency of the primary economic environment in 

which the entity operates (‘the functional currency’). 

The consolidated financial statements are presented 

in Australian dollars, which is GMM’s functional and 

presentation currency. 

Transactions and balances 

Foreign currency transactions are translated into the 

functional currency using the exchange rates prevailing 

at the dates of the transactions. Foreign exchange 

gains and losses resulting from the settlement of 

such transactions and from the translation at year- 

end exchange rates of monetary assets and liabilities 

denominated in foreign currencies are recognised in 

the statement of financial performance. Translation 

differences on non-monetary financial assets such as 

equities classified as available-for-sale financial assets 

are included in the fair value reserve in equity. 

2. Actual and Proposed Transactions to 

Arrive at Pro-forma Unaudited Consolidated 

Statement of Financial Position 

Actual and proposed transactions adjusting the 30 

June 2009 unaudited Statement of Financial Position 

of GMM in the pro-forma consolidated Statement of 

Financial Position of GMM are as follows: 

(a) The issue of 3,000,000 shares at 12 cents each 

to raise a gross $360,000 in September 2009 and the 

issue of 100,000 shares ($12,000) and 100,000 share 

Options ($5,870) as capital raising costs ($17,870); 

(b) The issue of 40,000,000 shares at 20 cents each 

to raise a gross $8,000,000 pursuant to the Prospectus 

and the issue of 800,000 shares ($160,000) and 

800,000 share Options ($69,920) to a broker as 

capital raising costs ($229,920); 

(c) The payment of 30 June 2009 accounts payable 

of $24,785 for GMM, $6,843 for Golden Cross and 

other loans totalling $13,721; 

(d) The payment of cash expenses of the 

Prospectus issue totalling an estimated $600,000 and 

the expensing of such costs against equity; 

(e) The incurring of additional group administration 

and exploration costs of say $130,000 (excluding 

Director and Corporate Administration fees of 

$40,000 from 1 July 2009 to 30 September 2009) and 

further deprecation of say $2,939; 

(f) The issue of 937,394 shares at 20 cents each 

to eliminate two thirds of outstanding director 

and administration fees as at 30 September 2009 

(approximately $187,479) and the balance paid in 

cash ($93,599) out of the proceeds of the Public 

Issue; 

(g) The payment of $100,000 to Galaxy and the 

issue of 5,000,000 shares at 20 cents each ($1,000,000) 

and 2,500,000 share Options with a deemed fair 

value of $170,000 to acquire an initial 50% interest 

in the Shoemaker Iron Ore Project (total acquisition 

cost $1,270,000); and 

(h) The payment of statutory costs including stamp 

duties on acquisitions estimated not to exceed 

$85,000. 


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Note 2 Unaudited 

Consolidated GMM 

30 June 2009 

$ 

Unaudited 


Pro-forma 

30 June 2009 

$ 

3. Cash Assets 

The movements in cash assets are as follows: 

Unaudited 30 June 2009 104,953 104,953 

Issue of shares pursuant to seed investors (a) - 360,000 

Issue of shares pursuant to the Prospectus (b) - 8,000,000 

Payment of payables (a)(f) - (138,948) 

Prospectus issue costs (d) - (600,000) 

Administration costs (e) - (130,000) 

Payment to Galaxy (g) - (100,000) 

Statutory costs (h) - (85,000) 

4. Receivables 

104,953 7,411,005 

GST receivable/other 18,210 18,210 

Prepayments - 

5. Capitalised Acquisition Costs 

50% interest in Shoemaker Iron Ore Project 

18,210 18,210 

Cash, shares and Options (g) - 1,270,000 

6. Investments 

Shares in wholly owned subsidiary 

- 1,270,000 

Golden Cross LLC 11,000 11,000 

Less: Write down of investment in 2008 (11,000) (11,000) 

- - 

Less eliminated on consolidation - - 

- - 

Loans to Golden Cross LLC 265,791 265,791 

Less eliminated on consolidation (265,791) (265,791) 

- - 

Total Investments - - 

The Company is financing the operations of Golden Cross and thus Golden Cross has unsecured borrowings 

from GMM that are interest free and at call. The ability for Golden Cross to repay debts due to GMM (and other 

parties) will be dependent on the commercialisation of the mining assets owned by the subsidiary. Losses may 

be incurred by the subsidiary and provisions raised against the loans due by the subsidiary to GMM in the books 

of GMM.



30 June 2009 

$ 

Unaudited 


Pro-forma 

30 June 2009 

$ 

7. Trade and other payables 

Trade and other payables 31,628 31,628 

Short term borrowings 13,721 13,721 

Owing to directors and others (e) 241,078 281,078 

Less: Payment of payables and loans (a)(e) - (138,948) 

Less: Payment of liabilities by share issues (d) - (187,479) 

8. Issued Capital 

286,427 - 

19,000,000 shares as at 30 June 2009 1,118,130 1,118,130 

3,000,000 shares at 12 cents each (a) - 360,000 

100,000 shares to a broker (a) - 12,000 

40,000,000 shares pursuant to the Prospectus (b) - 8,000,000 

500,000 shares to a broker (b) - 160,000 

937,394 shares to eliminate debts (f) - 187,479 

5,000,000 shares to Galaxy (g) - 1,000,000 

1,118,130 10,837,609 

Less: estimated share issue costs (a)(d) (43,770) (903,560) 

Pro-forma (68,837,394 shares) 1,074,360 9,934,049 

In the event that the minimum subscription of $4,000,000 is received, the number of shares on issue would 

decrease to 48,437,394 as 20,000,000 shares (instead of 40,000,000 shares) would be issued under the Prospectus 

and 400,000 shares would be issued to the broker instead of 800,000 shares, the issued capital would decrease 

to $6,289,749 (cash capital raising costs would decrease by $200,000 to $400,000, share and share option costs 

would reduce to $114,960 and share capital costs would decrease to $576,600) and cash at bank would decrease 

to $3,611,005. The broker to the issue can elect to receive his brokers fee in shares and if this occurred the broker 

would receive a further up to 2,000,000 shares (if $8,000,000 is raised) (1,000,000 shares if $4,000,000 is raised). 

9. Option Reserve 

Balance at 30 June 2009 16,843 16,843 

Issue of Options to a broker (a)(b) - 87,790 

Issue of Share Options to Galaxy (g) - 170,000 

16,843 274,633 

As at 19 October 2009 there are 11,850,000 Share Options outstanding all exercisable at 20 cents each. 

• 2,250,000 Options expire on the 11 March 2011 

• 2,950,000 Options expire on the 20 December 2010 

• 4,000,000 Options expire on the 30 September 2012 

• 2,000,000 Options expire on the 28 February 2013 

• 550,000 Options expire on the 23 June 2013 

• 100,000 Options expire 31 August 2014 


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84 

8 - Independent Accountant’s Report; 9 - Corporate Governance 

In addition, a further 2,500,000 share Options are to be issued to Galaxy, exercisable at 20 cents each within 3 years 

of issue date and 500,000 share Options issued to the broker to the Prospectus also exercisable at 20 cents each, 

on or before 5 years from the issue date. In the event that the minimum subscription of $4,000,000 is raised, then 

only 400,000 share Options would be issue to the broker. The broker in effect receives 50 share Options for every 

share issued pursuant to the public issue under the Prospectus. Furthermore Matveev, subject to shareholder approval 

will be entitled to receive 1,500,000 share Options exercisable at 20 cents each within 2 years of the deemed 

issue date of 30 June 2010, 1,500,000 share Options exercisable at 40 cents each within 2 years of the deemed issue 

date of 30 June 2011 and 1,500,000 share Options exercisable at 60 cents each within 2 years of the deemed issue 

date of 30 June 2012. When Matveev becomes entitled to the relevant Options, they will need to be valued and an 

expense taken up. Under an agreement with Lhava Choyon (“Choyon”) and Golden Cross, 250,000 share Options 

were issued to Choyon in October 2009. Choyon is entitled to receive a further 250,000 share Options in July 2010 

exercisable at 20 cents each and expiring on 23 June 2013. 



30 June 2009 

$ 

Unaudited 


Pro-forma 

30 June 2009 

$ 

10. Accumulated Losses 

Balance as at 30June 2009 1,269,963 1,269,963 

Administration, exploration and depreciation costs (e) - 132,939 

Director and administration fees (f) - 40,000 

Statutory and other costs (g) - 85,000 

1,269,963 1,527,902 

11. Contingent Liabilities and Commitments 

As As at 30 June 2009, the Company has the following contingent liabilities and commitments. Mineral Administration 

Services Pty Ltd is a company jointly owned by Mr. Lindsay Colless and Ms. Karen Brown who are also appointed 

as joint company secretaries. Fees for the provision of the service are $5,000 per month until the end of the month 

in which GMM lists on the ASX and $7,000 per month thereafter. Shares in the Company will be issued in lieu of 

two thirds of the fees outstanding at 20 cents per share until 30 September 2009 and thereafter is payable in cash. 

The Company has agreements in place effective 1 October 2009 with the non-executive director chairman to pay 

annual director fees of $60,000 and other non executive directors $40,000 per annum. It has been agreed that 

two thirds of the outstanding fees to 30 September 2009 are to be extinguished by the issue of shares at 20 cents 

each. Based on discussions with the Directors and legal advisors, to our knowledge, the Company has no other 

material commitment or contingent liabilities not otherwise disclosed in this Investigating Accountant’s Report (refer 

Background section 3) and in the Prospectus. Investors should read the Independent Geological Reports and the 

Independent Solicitors’ Report for further possible contingencies and commitments. A number of tenements may 

be subject to royalty payments on production of minerals. 

For details on proposed exploration commitments on mineral tenements, refer to the Independent Consulting Geologist’s 

Reports in the Prospectus and sections 4 and 5 of the Prospectus. 

12. Rental Of Premises Commitments 

The Company has an informal arrangement to sub lease premises at the rate of approximately $1,500 per month. 

There is no fixed term. The Company may seek new premises following a successful public listing. The Company 

leases premises in Mongolia at the rate of US$546 per month. 

13. Management Agreements 

The Company has entered into an employment contract with Dr. Boris Mateev as Managing Director effective 1 

January 2010. A summary of the financial details on the employment agreement is outlined in the Background 

Section of this report and/or in the Material Contracts section of the Prospectus (included in the Solicitors Report). 

In addition Choyon (refer note 9 above) is employed as a director of Golden Cross at the rate of US$500 per week 

plus social security and insurance payments totalling 10% of the weekly rate.

9 - Corporate Governance 

The Directors of the Company believe that 

effective corporate governance improves 

Company performance, enhances corporate 

social responsibility and benefits all stakeholders. 

Governance practices are not a static set of principles 

and the Company assesses its governance practices 

on an ongoing basis. Changes and improvements 

are made in a substance over form manner, which 

appropriately reflect the changing circumstances of 

the Company as it grows and evolves. Accordingly, 

the Board has established a number of practices 

and policies to ensure that these intentions are met 

and that all shareholders are fully informed about 

the affairs of the Company. 

The Company will have a corporate governance 

section on the website at www.generalmining.com. 

The section will include details on the Company’s 

governance arrangements and copies of relevant 

policies and charters. 

ASX Corporate Governance Council Best 

Practice Principles and Recommendations 

(2nd Edition) 

For ease of comparison to the recommendations, 

the Corporate Governance statement addresses 

each of the eight principles in turn. Where the 

Company has not followed a recommendation this 

is identified with the reasons for not following the 

recommendation. This disclosure is in accordance 

with ASX Listing Rule 4.10.3. 

Principle 1 - Lay solid foundations for 

management and oversight by the board 

Recommendation 1.1: Companies should establish 

those functions reserved to the board and those 

delegated to senior executives and disclose those 

functions. 

The Board operates in accordance with broad 

principles set out in its charter which will be 

available from the corporate governance section 

of the Company’s website. Broadly the key 

responsibilities of the Board are: 

1. overseeing the Company, including its 

control and accountability systems; 

2. providing input into and final approval 

of management’s development of 

corporate strategy and performance 

objectives; 

3. reviewing, ratifying and monitoring 

systems of risk management and 

internal control, codes of conduct and 

legal compliance; 

4. monitoring senior executives’ 

performance and implementation 

strategy; 

5. ensuring appropriate resources are 

available to senior executives; 

6. approving and monitoring the progress 

of major capital expenditure, capital 

management and acquisitions and 

divestures; and 

7. approving and monitoring financial 

and other reporting. 

All Directors and key executives of the Company 

have been given formal letters of appointment 

outlining key terms and conditions of their 

appointment. 

Recommendation 1.2: Companies should disclose 

the process for evaluating the performance of senior 

executives. 

Performance evaluations for senior executives are 

carried out annually by the Chairman. Performance 

during the previous 12 months is assessed 

against relevant performance indicators, and role 

expectations and goals are set for the following 

year. 

Recommendation 1.3: Companies should provide 

the information indicated in the Guide to reporting 

on Principle 1. 

The Company will include the disclosure required 

by Recommendation 1.3 in its future annual reports. 

In accordance with the guide to reporting on 

Principle 1, the Company’s Board charter will be 

available from the corporate governance section of 

its website. 

Principle 2 – Structure the board to add value 

Details of each Board member’s experience, 

expertise and qualifications are set out in section 2 

of the Prospectus. 

Recommendation 2.1: A majority of the board 

should be independent Directors. 

The structure of the Board complies with 

Recommendation 2.1. 

Board structure and composition will be reviewed 

as and when the Company’s strategic directions 

and activities change. The Company will only 

recommend the appointment of additional Directors 

to your Board where it believes the expertise and 

value added outweighs the additional cost. 


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86 


Recommendation 2.2: The chair should be an 

independent Director. 

The structure of the Board complies with 

Recommendation 2.2 in that the Chairman does not 

fall within the relationships affecting independent 

status. 

Recommendation 2.3: The roles of chair and chief 

executive officer should not be exercised by the 

same individual. 

The Company complies with this recommendation. 

Recommendation 2.4: The board should establish a 

nomination committee. 

The Company does not comply with ASX 

recommendation 2.4 in that there is no separate 

nomination committee. Given the Board comprises 

four Directors, it has been decided that there 

are no efficiencies to be gained from forming a 

separate nomination committee. The current Board 

members carry out the role that would otherwise 

be undertaken by a nomination committee. 

Recommendation 2.5: Companies should disclose 

the process for evaluating the performance of the 

board, its committees and individual Directors. 

Each Director will complete an annual formal 

evaluation of the Board’s performance. 

The Chairman will conduct an informal evaluation 

of each Board member’s performance at least 

once per annum. The review process will include 

a combination of qualitative and quantitative 

assessments, the results of which shall be discussed 

with the individual Director and the Board. 


the information indicated in the guide to reporting 



by Recommendation 2.6 in its 2010 Annual Report. 


Principle 2, a description of the procedure for the 

selection and appointment of new Directors and 

the re-election of current Directors will be available 

from the corporate governance section of the 

Company’s website. 

Principle 3 – Promote ethical and responsible 

decision making 


a code of conduct and disclose the code or a 

summary of the code as to: 

• the practices necessary to maintain 

confidence in the Company’s integrity; 

• the practices necessary to take into 

account their legal obligations and 

the reasonable expectations of their 

stakeholders; and 

• the responsibility and accountability 

of individuals for reporting and 

investigating reports of unethical 

practices. 

The Board has adopted a code of business conduct 

which expresses certain basic principles that 

the Company and employees, consultants and 

contractors should follow in all dealings related 

to the Company. They should show the highest 

business integrity in their dealings with others, 

including preserving the confidentiality of other 

peoples’ information and should conduct the 

Company’s business in accordance with law and 

principles of good business practice. 


a policy concerning trading in Company securities 

by Directors, senior executives and employees, and 

disclose the policy or a summary of that policy. 

A formal securities trading policy has been adopted 

whereby Directors and certain key executives are 

prevented from trading in the Company’s shares 

during the two weeks prior to the announcement 

of quarterly, half-year and the full-year reports. This 

is a restriction over and above the requirement 

to not trade in the Company’s securities when in 

possession of inside information which applies 

to all Directors, executives and employees of the 

Company. 

In accordance with the provisions of the 

Corporations Act and the ASX Listing Rules, the 

Company on behalf of the Directors must advise 

the ASX of any transactions conducted by them in 

Shares and/or Options in the Company. 







Principle 3, the Company’s code of conduct and 

securities trading policy will be available from the 

corporate governance section of the Company’s 

website.

Principle 4 – Safeguard integrity in financial 

reporting 

Recommendation 4.1: The board should establish 

an audit committee. 

Recommendation 4.2: The audit committee should 

be structured so that it: 

• consists only of non-executive Directors; 

• consists of a majority of independent 

Directors; 

• is chaired by an independent chair 

who is not chair of the board; and 

• has at least three members. 

The Company does not comply with 

Recommendations 4.1 and 4.2 in that there is no 

separate audit committee, and it is not comprised 

only of non-executive Directors. Given the Board 

comprises four Directors, it has been decided that 

there are no efficiencies to be gained from forming 

a separate audit committee. The current Board 

members carry out the roles that would otherwise 

be undertaken by a separate audit committee. 

The Board believes the audit committee structure 

is appropriate given the Company’s size. The 

composition of the audit committee will be assessed 

on an ongoing basis in light of the Company’s 

overall Board structure and strategic direction. 

Recommendation 4.3: The audit committee should 

have a formal committee charter. 

The Board has adopted a formal audit charter 

that sets out the roles and responsibilities of the 

audit committee and contains information on 

the procedures for the selection and rotation of 

the external auditor. When considering financial 

matters, the Board functions in accordance with 

this charter. 






In accordance with the Guide to reporting on 

Principle 4, the audit committee charter and 

information on the procedures for the selection of 

the external auditor and rotation of auditors will be 


the Company’s website. 

Principle 5 – Make timely and balanced 

disclosure 


written policies designed to ensure compliance with 

ASX Listing Rule disclosure requirements and to 

ensure accountability at a senior executive level 

for that compliance and disclose those policies or a 

summary of those policies. 

The Board has adopted a formal continuous 

disclosure policy outlining procedures for 

compliance with ASX continuous disclosure 

requirements. The policy is based upon the 

Company’s desire to promote fair markets, honest 

management and full and fair disclosure. The 

disclosure requirements must be complied with in 

accordance with their spirit, intention and purpose. 

The purpose of the policy is to: 

• summarise the Company’s disclosure 

obligations; 

• explain what type of information 

needs to be disclosed; 

• identify who is responsible for 

disclosure; and 

• explain how individuals at the 

Company can contribute. 







Principle 5, the Company’s continuous disclosure 

policy will be available from the corporate 

governance section of the Company’s website. 

Principle 6 – Respect the rights of 

shareholders 

Recommendation 6.1: Companies should design 

a communications policy for promoting effective 

communication with shareholders and encouraging 

their participation at general meetings and disclose 

their policy or a summary of that policy. 

The Board has adopted a formal continuous 

disclosure policy and communication guidelines. 

All information disclosed to the ASX is posted on 

the Company’s website as soon as it is disclosed 

to the ASX. When analysts are briefed on aspects 

of the group’s operations, the material used in the 


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presentation is released to the ASX and posted on 

the Company’s website. Procedures are in place 

to determine where price sensitive information 

has been inadvertently disclosed, and if so, this 

information is released to the ASX. 







Principle 6, the Company’s continuous disclosure 

policy and communications guidelines will be 


the Company’s website. 

Principle 7 – Recognise and manage risk 


policies for the oversight and management of 

material business risks and disclose a summary of 

those policies. 

Recommendation 7.2: The board should require 

management to design and implement the risk 

management and internal control system to 

manage the Company’s material business risks 

and report to it on whether those risks are being 

managed effectively. The board should disclose 

that management has reported to it as to the 

effectiveness of the Company’s management of its 

material business risks. 

The Company does not have a separate risk 

management committee. Given the current size of 

the Company and the Board, the Directors believe 

there are no efficiencies in forming a separate 

committee and the Board as a whole performs this 

role. 

Financial and operating risks are addressed through 

individual approved policies and procedures 

covering financial, contract management, safety and 

environmental activities of the Company. In addition 

to financial audits, the Company’s operations in 

Australia will be subject to annual risk management 

reviews in accordance with Risk Management 

Standard AS/NZS 4360: Risk Management. The 

Company engages an insurance brokering firm as 

part of the Company’s annual assessment of the 

coverage for insured assets and risks. The results of 

all the various reviews and insurances are reported 

to the Board at least annually. 

The Board has adopted a risk management 

committee charter. When considering risk 

management, the Board acts in accordance with 

this charter. 

The Board believes that it has a thorough 

understanding of the Company’s key risks and is 

managing them appropriately. 

Recommendation 7.3: The board should discuss 

whether it has received assurance from the chief 

executive officer (or equivalent) and the chief 

financial officer (or equivalent) that the declaration 

provided in accordance with section 295A of the 

Corporations Act is founded on a sound system of 

risk management and internal control and that 

the system is operating efficiently in all respects in 

relation to financial reporting risks. 

The integrity of the Company’s financial reporting 

relies upon a sound system of risk management 

and control. Accordingly, the persons performing 

the functions of chief executive officer and chief 

financial officer will be asked to confirm that 

any declaration they provide in accordance with 

section 295A of the Corporations Act is founded on 

a sound system of risk management and internal 

control and that the system is operating efficiently 

in all respects in relation to financial reporting risks. 







Principle 7, the Company’s risk management 

committee charter will be available from the 

corporate governance section of the Company’s 

website. 

Principle 8 – Remunerate fairly and 

responsibly 

Recommendation 8.1: The board should establish a 

remuneration committee. 

The Company does not comply with 

Recommendation 8.1 in that it has not established 

a separate remuneration committee. Given the 

current size of the Company and Board, the 

Directors believe there are no efficiencies in 

forming a separate committee and the Board as a 

whole performs this role. The Board of Directors 

reviews and approves recommendations in terms 

of compensation and incentive plan arrangements 

for Directors and senior executives, having regard 

to market conditions and the performance of 

individuals and the Company. 

Recommendation 8.2: Companies should clearly 

distinguish the structure of non-executive Directors’ 

remuneration from that of executive Directors and 

senior executives.

The Company’s remuneration policies will be 

detailed in the Directors’ Report in future periodic 

reports. 

Non-executive Directors are remunerated by 

way of Director’s fees. Apart from compulsory 

superannuation entitlements, non-executive 

Directors are not eligible to receive retirement 

benefits. 







Principle 8, the remuneration committee charter and 

a summary of the Company’s remuneration policy 

will be available from the corporate governance 

section of the Company’s website. 


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10 - Risk Factors 


The Shares offered under this Prospectus should be 

considered speculative because of the nature of the 

business activities of the Company. Whilst the Directors 

recommend the Offer, potential investors should 

consider whether the Shares offered are a suitable 

investment having regard to their own personal 

investment objectives and financial circumstances and 

the specific and general risk factors set out below. 

This list is not exhaustive and potential investors 

should read this Prospectus in its entirety and if in 

any doubt consult their professional adviser before 

deciding whether to participate in the Offer. 

Risks specific to the Company and its 

Projects 

Limited History of the Company and its Projects 

The Company has limited operating history on which 

an evaluation of its prospects can be made. The 

prospects of the Company must be considered in 

light of the risks, expenses and difficulties frequently 

encountered by companies in their early stage of 

development, particularly in the mineral exploration 

sector which has a high level of inherent uncertainty. 

Although the Company’s Australian projects have 

undergone some limited exploration, that work is 

only preliminary. Whilst the Company’s Mongolian 

Projects are considered prospective, as they are near 

known mineralisations, no exploration has taken 

place on the Company’s Mongolian Projects. Further 

exploration is required to determine whether the 

Company’s projects contain any economically viable 

mineral deposits. Even if an apparently viable mineral 

deposit is identified, there is no guarantee that it can 

be profitably exploited. 

Sovereign and Political Risks Associated with 

Operating in Mongolia 

The Company holds a number of projects in Mongolia. 

As set out under section 6, holding projects in a young 

democratic country which is experiencing a rocky 

transition to a market economy presents a certain 

level of uncertainty and risk. 

As set out under section 6, the Mongolian Parliament 

has previously passed laws that may restrict or limit 

the Company’s operations or make them uneconomic. 

These include the laws that impose the right to 

participate in ‘mineral deposits of strategic importance’. 

At present the Company’s Mongolian projects are not 

’mineral deposits of strategic importance’. However, 

should the Company’s exploration activities lead 

to an economically viable mineral deposit, there is 

a risk that the Mongolian State may seek to acquire 

an interest in those deposits. Furthermore, there is 

a risk that the Mongolian Parliament may attempt 

to pass further laws that may prejudicially affect the 

Company’s operations. 

More general risks include economic, social or 

political instability or change, hyperinflation, 

currency non-convertibility or instability and changes 

of law affecting foreign ownership, government 

participation, taxation, working conditions, rates of 

exchange, exchange control, exploration licensing, 

export duties, repatriation of income or return of 

capital, environmental protection, mine safety, labour 

relations as well as government control over mineral 

properties or government regulations that require the 

employment of local staff or contractors or require 

other benefits to be provided to local residents. 

Legal Risks Associated with Operating in 


The Company’s Mongolian operations are subject to 

the jurisdiction of Mongolia’s courts. The legal system 

operating in Mongolia is less developed than more 

established countries, which may result in risk such 

as: 

• political difficulties in obtaining effective legal 

redress in the courts whether in respect of a 

breach of law or regulation, or in an ownership 

dispute; 

• a higher degree of discretion on the part of 

governmental agencies and the risk that they may 

not act in good faith; 

• the lack of political or administrative guidance on 

implementing applicable rules and regulations 

including, in particular, as regards local taxation 

and property rights; 

• inconsistencies or conflicts between and within 

various laws, regulations, decrees, orders and 

resolutions; or 

• relative inexperience of the judiciary and courts, 

including specifically in commercial matters and 

cross border transactions. 

The commitment to local business people, government 

officials and agencies and the judicial system to abide 

by legal requirements and negotiated agreements 

may be more uncertain, creating particular concerns 

with respect to licences and agreements for business. 

These may be susceptible to revision or cancellation 

and legal redress may be uncertain or delayed. There 

can be no assurance that the licences and other 

legal arrangements will not be adversely affected by 

the actions of the government authorities or others

and the effectiveness of and enforcement of such 

arrangements cannot be assured. 

In the case where the Company disputes the actions 

of the State with regard to its tenements, it is unlikely 

that the Company would be successful in raising a 

claim in Australian courts for reasons of comity or the 

doctrine of sovereign immunity. 

Title Risks Associated with the Mongolian 

Projects 

As noted in section 6, there are a number of conditions 

that the Company must satisfy with respect to its 

Mongolian licences, including minimum expenditure 

and annual reporting requirements that the Company 

must comply with to keep the Company’s Mongolian 

licences in good standing. There is a risk that 

the Company may not be able to satisfy these 

requirements, in which case the Company may forfeit 

title to the licences. 

Specifically the Company notes the following with 

respect to its Mongolian licences: 

• The mine permitting process is very cumbersome 

and there is no comprehensive system for 

obtaining permits from a single source. Delays in 

obtaining all necessary approvals and permits may 

jeopardise the economic viability of a project. 

• The Company has only funded the necessary 

environmental reclamation funds in 2009 for 

two areas of licence 14404X excluding Davst 

soum. This failure can be the legal ground for the 

suspension of exploration activities for up to three 

months and the possibility of revocation of that 

licence. 

• The Environmental Protection Plans and Reports 

for licences 14593X, 14598X, 15015X, 13846X, 

13847X, 13848X, 13849X and 14314X have not 

been filed. The failure to develop and submit the 

Environmental Protection Plan and Report can be 

legal grounds for the suspension of exploration 

activities for up to three months and the possibility 

of revocation of those licences. 

The Company is taking all necessary steps to fund 

the necessary environmental reclamation funds and 

file the relevant plans and reports, and considers the 

risk that the above licences will be revoked or that the 

Company is liable for a penalty to be low. 

Title Risks Associated with the Company’s 

Australian Projects 

The exploration licences comprising some of the 

tenements which the Company holds or in which it 

has an interest may be the subject of applications for 

extension in the future. If a tenement is not extended, 

the Company may suffer significant damage through 

loss of the opportunity to discover and/or develop 

any mineral resources on that tenement. 

In addition, the Company cannot guarantee that those 

tenements that are applications for tenements will 

ultimately be granted in whole or in part. For more 

details on the issue of title to the tenements, refer to 

the Independent Solicitor’s Report in section 7 of this 

Prospectus. 

Environmental Risks 

The Company’s projects are subject to Western 

Australian, Mongolian and Australian Federal laws 

and regulations regarding environmental matters and 

the discharge of hazardous wastes and materials. As 

with all mining projects, these projects would be 

expected to have a variety of environmental impacts 

should development proceed. 

As noted in section 6, the Mongolian Parliament 

has passed the Water Basin Law which attempts 

to prohibit mineral exploration and/or mining in 

river basins and forested areas. There is a risk that 

the Government may determine that parts of the 

Company’s Mongolian projects may cover river basins 

and forested areas, which may inhibit or prevent the 

Company from undertaking mineral exploration and/ 

or mining operations. 

The Company’s projects located in the Uvs Aimag 

of Mongolia are located near the World Heritage 

listed Uvs Nuur (lake). Exploration licence 13849X is 

located within the buffer zone to the Uvs Nuur World 

Heritage area. Uvs Nuur and wetlands to the east (Tes 

River) of the lake have also been declared a RAMSAR 

wetland. Several sites of archaeological importance 

are also located within the basin. There is a risk thyat 

by virtue of this the Company’s activities may be 

stopped over parts of licence 13849X. 

The Company intends to conduct its activities in 

an environmentally responsible manner and in 

accordance with applicable laws and industry 

standards. Areas disturbed by the Company’s activities 

will be rehabilitated as required by applicable laws and 

regulations. The location of the Company’s projects 

near a World Heritage site and RAMSAR wetland 

may require extensive environmental assessment, 

monitoring and reporting. 

Currency 

Any revenue generated by the Company is expected 

to be in US$ while its cost base would be expected 

to be in A$, Mongolian National Tugrik (“MNT”) and 

US$. Consequently the cross exchange rates for these 

currencies will have an impact on the Company’s 

expected earnings in A$. 

The cross exchange rates are affected by numerous 

factors beyond the control of the Company. 


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These factors include Australia’s, Mongolia’s and 

the USA’s economic conditions and the outlook for 

interest rates, inflation and other economic factors. 

These factors may have a positive or negative effect 

on the Company’s exploration, project development 

and production plans and activities, together with the 

ability to fund those plans and activities. 

Infrastructure 

Several of the Company’s projects are located in 

regions within Australia and Mongolia that are poorly 

serviced by infrastructure. 

The Company’s Shoemaker project is located to the 

east of a planned railway to Golden West Resources 

Ltd’s Wiluna West Iron Ore Project. The railway is 

part of the Oakajee Port and Railway project. The 

economic viability of the Shoemaker project may rely 

on the construction of this railway and may require 

substantial further investment by the Company to 

extend the railway to the Company’s project. 

Several of the Company’s Mongolian licences are 

located in areas that lack access to basic infrastructure 

including roads, electricity, running water and health 

and emergency services. The Company’s Uvs Basin 

project is well serviced by asphalt roads leading to 

major railways in Russia. Electricity at the Uvs Basin 

project is sourced from nearby Russian plants with 

power lines passing through several of the Company’s 

licences. Regular disruptions to the electricity supply 

occur which may impact on the Company’s activities. 

The lack of infrastructure may impact negatively on 

the economic viability of any deposits discovered by 

the Company in other regions and may require the 

Company to negotiate access to existing infrastructure 

and/or invest substantial amounts in the upgrade 

of existing infrastructure or development of new 

infrastructure. 

Operating Risks 

The current and future operations of the Company, 

including exploration, appraisal and possible 

production activities may be affected by a range of 

factors. 

The Company’s Mongolian projects are often subject 

to extreme climatic conditions which restrict the 

period within which exploration; appraisal and 

possibly production activities may take place and 

may also place Company personnel at risk if exposed 

to these extreme conditions. 

Mongolia has a foreign worker quota system that may 

make it difficult to hire qualified personal even where 

local manpower is unavailable. 

A summary of factors that may affect the operations of 

the Company, include: 

• geological conditions; 

• alterations to joint venture programs and budgets; 

• unanticipated operational and technical difficulties 

encountered in geophysical surveys, drilling and 

production activities; 

• mechanical failure of operating plant and 

equipment, industrial and environmental 

• 

accidents, acts of terrorism or political or civil 

unrest and other force majeure events; 

industrial action, disputation or disruptions; 

• unavailability of aircraft or drilling equipment to 

undertake airborne electromagnetic and other 

geological and geophysical investigations; 

• unexpected shortages or increases in the costs of 

consumables, spare parts, plant and equipment; 

• prevention or restriction of access by reason of 

political unrest, outbreak of hostilities, and inability 

to obtain consents or approvals; 

• current exploration operations and future mine 

development of the tenements are subject to 

the Company’s ability to obtain a wide range 

of permits, licences, and approvals and there 

is no guarantee that such permits, licences and 

approvals will be granted or will be granted in a 

timely manner; 

• advancement of the exploration operations to 

mine development can be a lengthy process 

taking a number of years where the Company’s 

projects may be subject to new laws, regulations, 

and taxes which may have a material impact on 

the Company; and 

• restriction of access to infrastructure by Russian, 

Chinese or Mongolian authorities. 

Exploration, Development, Mining and 

Processing Risks 

The business of mineral exploration, project 

development and mining by its nature contains 

elements of significant risk. Ultimate and continuing 

success of these activities is dependent on many 

factors such as: 

• the discovery and/or acquisition of economically 

recoverable ore reserves; 

• successful 

studies; 

conclusions to bankable feasibility 

• access to adequate capital for project development; 

• design and construction of efficient mining and 

processing facilities within capital expenditure 

budgets; 

• securing and maintaining title to tenements and 

compliance with the terms of those tenements;

• obtaining consents and approvals necessary for 

the conduct of exploration and mining; and 

• access to competent operational management and 

prudent financial administration, including the 

availability and reliability of appropriately skilled 

and experienced employees, contractors and 

consultants. 

Whether or not income will result from projects 

undergoing exploration and development programs 

depends on the successful establishment of 

mining operations. Factors including costs, actual 

mineralisation, consistency and reliability of ore 

grades and commodity prices affect successful project 

development and mining operations. 

Mining is an industry which has become subject to 

increasing legislative regulation including but not 

limited to environmental responsibility and liability. 

The potential for liability is an ever present risk. The 

use and disposal of chemicals in the mining industry 

is under constant legislative scrutiny and regulation. 

The introduction of new laws and regulations or 

changes to underlying policy may adversely impact 

on the operations of the Company. 

Native Title (Australia) 

The Native Title Act 1993 (Cth) recognises and 

protects the rights and interests in Australia of 

Aboriginal and Torres Strait Islander people in land 

and waters, according to their traditional laws and 

customs. There is some uncertainty associated with 

native title in Australia and this may impact on the 

Company’s operations and future plans. 

Native title can be extinguished by valid grants of 

land or waters to people other than the native title 

holders or by valid use of land or waters. It can also 

be extinguished if the indigenous group has lost 

their connection with the relevant land or waters. 

Native title is not extinguished by the grant of mining 

licences, as they are not considered to be grants of 

exclusive possession. A valid mining lease prevails 

over native title to the extent of any inconsistency for 

the duration of the title. 

All tenements granted prior to 1 January 1994 are 

valid or validated. Tenements granted between 1 

January 1994 and 23 December 1996 may be invalid 

if they fail to comply with the Native Title Act or for 

certain other reasons because of native title. However, 

such invalid tenements may be validated if certain 

statutory criteria are met. For tenements to be validly 

granted (or renewed) the “right to negotiate” regime 

established by the Native Title Act must be followed. 

It is important to note that the existence of a native 

title claim is not an indication that native title in fact 

exists to the land covered by the claim, as this is a 

matter ultimately determined by the Federal Court. 

The Company must also comply with Aboriginal 

heritage legislation requirements which require 

heritage survey work to be undertaken ahead of the 

commencement of mining operations. 

A detailed discussion of native title and the claims 

is contained in the Independent Solicitor’s Report in 

section 7 of this Prospectus. 

Future Capital Needs and Additional Funding 

Funds raised will be used to carry out the Company’s 

objectives (as set out elsewhere in this Prospectus). 

The Company’s ability to raise further funds (debt 

or equity) within an acceptable time, or a sufficient 

amount and on terms acceptable to the Company will 

vary according to a number of factors, including: 

• the prospectiveness of the Company’s projects 

and any other projects that the Company may 

acquire; 

• the results of exploration, subsequent feasibility 

studies, development and mining; 

• stock market and industry conditions; and 

• the price of relevant commodities and exchange 

rates. 

Potential Acquisitions 

The Company will seek potential acquisitions or new 

investments in mineral exploration and production. 

Any acquisitions will be subject to risks normally 

associated with such acquisitions. 

General Economic Risks and Business 

Climate 

Resource Estimates 

Resource estimates are expressions of judgment based 

on knowledge, experience and industry practice. 

Estimates, which were valid when made, may 

change significantly when new information becomes 

available. In addition, resource estimates are imprecise 

and depend to some extent on interpretations, which 

may prove to be inaccurate. Should the Company 

encounter mineralisation or formations different 

from those predicted by past sampling and drilling, 

resource estimates may have to be adjusted and 

mining plans may have to be altered in a way which 

could have either a positive or negative effect on the 

Company’s operations. 

Commodity Prices 

The Company expects to derive its revenue from the 

sale of minerals such as iron ore, base metals and/or 

mineral salts. Consequently, the Company’s expected 

earnings will be closely related to the price of these 

commodities together with the terms of the off-take 


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10 - Risk Factors and 11 - Additional Information 

agreement(s) under which these metals will be sold. 

Commodity prices fluctuate and are affected by 

numerous factors beyond the control of the Company. 

These factors include worldwide and regional 

supply and demand for the specific commodity, 

commodity trading on the futures markets, general 

world economic conditions and the outlook for 

interest rates, inflation and other economic factors on 

both a regional and global basis. These factors may 

have a positive or negative effect on the Company’s 

exploration, project development and production 

plans and activities, together with the ability to fund 

those plans and activities. 

Share Market Conditions 

Share market conditions may affect the value of listed 

securities regardless of operating performance. Share 

market conditions are affected by many factors such 

as: 

• general economic outlook; 

• movements in or outlook on interest rates and 

inflation rates; 

• currency fluctuations; 

• commodity prices; 

• changes in investor sentiment towards particular 

market sectors; and 

• the demand and supply for capital. 

Commodity prices are influenced by physical 

and investment demand for those commodities. 

Fluctuations in commodity prices may influence 

individual projects in which the Company has an 

interest. 

Reliance on Key Personnel 

The Company is reliant on a small number of key 

personnel and consultants. The loss or one or more 

of these key persons could have an adverse impact 

on the Company’s business. 

It may be particularly difficult for the Company to 

attract and retain suitably qualified and experienced 

people, given the relatively small size of the Company. 

This is more so given some of the Company’s 

operations are in a remote part of Mongolia. 

Investment speculative 

The above list of risk factors should not be taken as 

exhaustive of the risks faced by the Company or by 

investors in the Company. The above factors, and 

others not specifically referred to above, may in the 

future materially affect the financial performance of 

the Company and the value of the Shares offered 

under this Prospectus. 

Therefore, the Shares to be issued pursuant to this 

Prospectus carry no guarantee with respect to 

the payment of dividends, return on capital or the 

market value of those Shares. Potential investors 

should consider that the investment in the Company 

is speculative and consult their professional advisor 

before deciding whether to apply for Shares under 

this Prospectus.

11 - Additional Information 

11.1 Incorporation 

The Company was incorporated on 31 May 2007 

as a proprietary limited company. The Company 

became a limited company on 2 November 2007. 

11.2 Rights Attaching To Shares 

11.2.1 General 

The Shares to be issued pursuant to this 

Prospectus are ordinary shares and will as from 

their allotment rank equally in all respects with 

all ordinary fully paid shares in the Company. 

The rights attaching to the Shares arise from a 

combination of the Company’s Constitution, 

the Corporations Act, the ASX Listing Rules 

and general law. A copy of the Company’s 

Constitution is available for inspection during 

business hours at its registered office. 

A summary of the more significant rights is set out 

below. This summary is not exhaustive nor does 

it constitute a definitive statement of the rights 

and liabilities of the Company’s shareholders. 

To obtain such a statement, persons should seek 

independent legal advice. 

11.2.2 Voting Rights 

Subject to the Constitution of the Company and 

any rights or restrictions at the time being attached 

to a class of shares, at a general meeting of the 

Company every Shareholder present in person, 

or by proxy, attorney or representative has one 

vote on a show of hands, and upon a poll, one 

vote for each Share held by the Shareholder and 

for each partly paid share held, a fraction of one 

vote equal to the proportion which the amount 

paid up bears to the amounts paid or payable on 

that share. In the case of an equality of votes, the 

chairperson has a casting vote. 

11.2.3 Dividends 

Subject to the Corporations Act, the ASX Listing 

Rules and any rights or restrictions attached to a 

class of shares, the Company may pay dividends 

as the Directors resolve but only out of profits of 

the Company. The Directors may determine the 

method and time for payment of the dividend. 

11.2.4 Winding up 


Rules and any rights or restrictions attached 

to a class of shares, on a winding up of the 

Company any surplus must be divided among 

the shareholders of the Company in proportion 

which the amount paid on the shares bears to 

the total amount paid and payable on the shares 

of all shareholders of the Company. 

11.2.5 Transfer of Shares 

Generally, shares are freely transferable, subject 

to satisfying the requirements of the ASX Listing 

Rules, ASTC Rules, the ACH Clearing Rules and 

the Corporations Act. The Directors may decline 

to register any transfer of Shares but only where 

permitted to do so by the Corporations Act, the 

ASX Listing Rules, the ASTC Rules, the ACH 

Clearing Rules or under the Constitution. 

11.2.6 Directors 

The Constitution and the ASX Listing Rules 

contain provisions relating to the rotation and 

election of Directors. 

11.2.7 Calls on Shares 

Subject to the Corporations Act and the terms 

of issue of a share, the Company may, at any 

time, make calls on the shareholders of a share 

for all, or any part of, the amount unpaid on 

the share. If a shareholder fails to pay a call or 

instalment of a call, the Company may, subject 

to the Corporations Act and the ASX Listing 

Rules, commence legal action for all, or part of 

the amount due, enforce a lien on the share in 

respect of which the call was made or forfeit the 

share in respect of which the call was made. 

11.2.8 Further Increases in Capital 


Rules, the ASTC Rules and the ACH Clearing 

Rules and any rights attached to a class of shares, 

the Company (under the control of the Directors) 

may allot and issue shares and grant Options 

over shares, on any terms, at any time and for 

any consideration, as the Directors resolve. 

11.2.9 Variation of Rights Attaching to 

Shares 


Rules, the ASTC Rules and the ACH Clearing 

Rules and the terms of issue of shares in a 

particular class, the Company may vary or cancel 

rights attached to shares in that class by either 

special resolution passed at a general meeting of 

the holders of the shares in that class, or with the 

written consent of the holders of at least 75% of 

the votes in that class. 


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11.2.10 General Meeting 

Each Shareholder will be entitled to receive 

notice of, and to attend and vote at, general 

meetings of the Company and to receive notices, 

accounts and other documents required to be 

furnished to Shareholders under the Constitution, 

the Corporations Act and the ASX Listing Rules. 

11.3 Sponsoring and Lead Broker 

Agreement 

The Company has entered into an agreement with 

State One Stockbroking Ltd (“State One”) whereby 

State One has been appointed sponsoring broker 

and lead manager of the Offer. 

Under the terms of the appointment, State One will 

be paid a 5% management fee on all funds raised, 

on the basis that it will pay away its other brokers on 

applications bearing their stamp. State One will pay a 

fee of 3% in respect of public Applications lodged by 

any member organisation of ASX, licensed securities 

dealer, or the holder of an Australian Financial 

Services License and accepted by the Company 

provided the relevant stamp of the organisation is 

on the Application Form. 

State One may elect to receive its management 

fee in Shares. State One will also be entitled to a 

sponsoring broker’s fee of between 400,000 Shares 

and 1,000,000 Shares (depending on the amount 

being raised) plus one free attaching Option with an 

exercise price of 20c and exercise date of five years 

from the date of listing on the ASX. State One is also 

entitled to be reimbursed out of pocket expenses. 

The Company has agreed to grant to State One the 

right of first refusal in relation to the first $10m of 

equity capital raisings required by the Company for 

a period of 24 months from the date of listing on 

the ASX. 

GMM may terminate the agreement should the IPO 

not reach the absolute minimum gross raising of $4 

million. 

State One has also been issued 300,000 Shares and 

300,000 Options with an exercise price of $0.20 

and an exercise date of 23 June 2013 following the 

completion of a seed capital raising in September 

2008. A fee of 100,000 Shares and 100,000 Options 

with an exercise price of $0.20 and an exercise 

date of 31 August 2014 was also paid to State One 

following the completion of a seed capital raising in 

September 2009. 

11.4 Material Contracts 

Set out below is a brief summary of certain contracts 

which have been entered into by the Company and 

which have been identified as material and relevant 

to potential investors. 

All other material contracts are referred to and 

summarised in the Independent Solicitor’s Report 

contained in section 7 of this Prospectus. 

Director good faith, protection and access deeds 

Each of the Directors of the Company have entered 

into a deed with the Company whereby the 

Company has provided certain contractual rights 

of access to books and records of the Company to 

those directors and to effect and maintain insurance 

in respect of directors and officers liability and 

provide certain indemnities to each of the directors, 

to the extent permitted by law. 

It is also proposed that the Company will enter 

into a similar deed with any subsequent Directors 

appointed. 

Strategic Alliance Agreement Lithium Projects with 

Galaxy Resources dated 26 October 2009 

The Company and Galaxy have entered into 

a strategic alliance agreement with the mutual 

objectives of bringing together the Company’s 

existing portfolio of possible lithium projects in 

Mongolia and Kazakhstan, including the Uvs Basin 

project for lithium brines and the Khangai Fault 

project for lithium pegmatites, the Company’s project 

generation skills, large database of information on 

Central Asia and its strategic networks, and Galaxy’s 

operational capabilities in advanced lithium project 

exploration and mineral project development and 

mining. 

Each party will bear their own costs whilst identifying 

alliance projects. The parties will negotiate in good 

faith to establish a joint venture over any area 

identified and accepted as a lithium project, subject 

to Galaxy having the right to earn up to 80% of 

any project by sole funding the project up to the 

completion of a bankable feasibility study. 

The Company retains rights to all non-lithium 

minerals on any licences held by Golden Cross, 

and has a right to a free carried 20% interest after 

respective project identification costs in any alliance 

project up to completion of a bankable feasibility 

study. 

11.5 Employee Share Option Plan 

Under the terms of the Company’s employee share 

option plan (“Plan”), the Board may offer free 

Options to persons (“Eligible Persons”) who are:

a) full-time or part-time employees (including 

a person engaged by the Company under a 

consultancy agreement); or 

b) Directors of the Company or any subsidiary 

based on a number of criteria including contribution 

to the Company, period of employment, potential 

contribution to the Company in the future and other 

factors the Board considers relevant. 

Upon receipt of such an offer, the Eligible Person 

may nominate an associate to be issued with the 

Options. 

Number of Options 

The maximum number of Options issued under the 

Plan at any one time is 5% of the total number of 

Shares on issue in the Company provided that the 

Board may increase this percentage, subject to the 

Corporations Act and the ASX Listing Rules. 

Terms of Options 

Each option entitles the holder, on exercise to be 

issued the number of Shares specified in the option. 

There is no issue price for the Options. The exercise 

price for the Options will be such price as determined 

by the Board (in its discretion) on or before the date 

of issue provided that in no event shall the exercise 

price be less that the weighted average sale price of 

Shares sold on ASX during the five Business Days 

prior to the date of issue or such other period as 

determined by the Board (in its discretion). 

Shares issued on exercise of Options will rank 

equally with other ordinary shares of the Company. 

Options may not be transferred other than to an 

associate of the holder. Quotation of Options on 

ASX will not be sought. However, the Company will 

apply to ASX for official quotation of Shares issued 

on the exercise of Options. 

An Option may only be exercised after that Option 

has vested and any other conditions imposed by 

the Board on exercise satisfied. The Board may 

determine the vesting period (if any). An Option 

will lapse upon the first to occur of the expiry date, 

the holder acting fraudulently or dishonestly in 

relation to the Company or the employee ceasing to 

be employed by the Company. 

If, in the opinion of the Board any of the following has 

occurred or is likely to occur, the Company entering 

into a scheme of arrangement, the commencement 

of a takeover bid for the Company’s Shares, or a 

party acquiring a sufficient interest in the Company 

to enable them to replace the Board, the Board 

may declare an Option to be free of any conditions 

of exercise. Options which are so declared may, 

subject to the lapsing conditions set out above, be 

exercised at any time on or before their expiry date 

and in any number. 

Future Issues of Shares 

New Issues 

There are no participating rights or entitlements 

inherent in the Options and optionholders will not 

be entitled to participate in new issues of capital 

offered to Shareholders during the currency of the 

Options. However, the Company will ensure that 

the record date for determining entitlements to any 

such issue will be at least six Business Days after the 

issue is announced. Optionholders shall be afforded 

the opportunity to exercise all Options which they 

are entitled to exercise pursuant to the Plan prior to 

the date for determining entitlements to participate 

in any such issue. 

Bonus Issues 

If the Company makes an issue of Shares to 

Shareholders by way of capitalisation of profits or 

reserves (“Bonus Issue”), each optionholder holding 

any Options which have not expired at the time of 

the record date for determining entitlements to the 

Bonus Issue shall be entitled to have issued to him 

upon exercise of any of those Options the number 

of Shares which would have been issued under the 

Bonus Issue (“Bonus Shares”) to a person registered 

as holding the same number of Shares as that 

number of Shares to which the optionholder may 

subscribe pursuant to the exercise of those Options 

immediately before the record date determining 

entitlements under the Bonus Issue (in addition to 

the Shares which he or she is otherwise entitled to 

have issued to him or her upon such exercise). The 

Bonus Shares will be paid by the Company out of 

profits or reserves (as the case may be) in the same 

manner as was applied in relation to the Bonus Issue 

and upon issue rank pari passu in all respects with 

the other Shares issued upon exercise of the Options. 

Reconstruction of Capital 

In the event of any reconstruction (including a 

consolidation, subdivision, reduction or return) of 

the issued capital of the Company prior to the expiry 

of any Options, the number of Options to which 

each optionholder is entitled or the exercise price 

of his or her Options or both or any other terms 

will be reconstructed in a manner determined by 

the Board which complies with the provisions of the 

ASX Listing Rules. 

Taxation 

Under current taxation laws any taxation liability 

in relation to the Options, or the Shares issued on 

exercise of the Options, will fall on the participants. 

The Company will not be liable to fringe benefits 


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tax in relation to Options or Shares issued under the 

Plan. 

Participation by Directors 

Although Directors are eligible to be offered Options 

under the Plan, this first requires specific Shareholder 

approval due to the requirements of the ASX Listing 

Rules and the Corporations Act. 

11.6 Interests of Directors 

Other than as set out below or elsewhere in this 

Prospectus, no Director or proposed Director holds, 

or held at any time during the two years before 

lodgement of this Prospectus with the ASIC, any 

interest in: 

a) the formation or promotion of the Company; 

b) property acquired or to be acquired by the 

Company in connection with: 

(i) its formation or promotion; or 

(ii) the Offer; or 

c) the Offer; and 

no amounts, whether cash or shares or otherwise, 

have been paid or agreed to be paid, and no 

benefits have been given or agreed to be given: 

d) to any Director or proposed Director, either to 

induce them to become, or to qualify as, a Director 

of the Company; and 

e) for services provided by a Director or 

proposed Director, in connection with: 

(i) the formation or promotion of the Company; 

or 

(ii) the Offer. 

Remuneration of Directors 

In accordance with the Constitution, the existing 

Shareholders of the Company as at the date of this 

Prospectus have determined in general meeting that 

the maximum total remuneration for non-executive 

Directors is to be $250,000 per annum. 

The Directors have resolved that each non-executive 

director is entitled to receive fees of $40,000 per 

annum (inclusive of superannuation) and the 

Table 1: Director Option holdings 

Chairman of Directors is entitled to receive $60,000 

per annum (inclusive of superannuation). 

A Director may also be paid fees or other amounts 

as the Directors determine if a Director performs 

special duties or otherwise performs services outside 

the scope of the ordinary duties of a Director. A 

Director may also be reimbursed for out of pocket 

expenses incurred as a result of their directorship or 

any special duties. 

Directors’ Holdings 

Under the Constitution, the Directors are not required 

to hold any Shares in the Company. 

The Directors have interests in the following Shares 

and Options: 

Director Shares Options 

Craig Readhead 1,466,417 2,100,000 

Robert Wanless 2,600,000 1,900,000 

Michael Wright 2,343,227 2,500,000 

Chris Wanless 2,400,000 1,900,000 

The Directors have each agreed to accept twothirds 

(2/3) of their accrued fees, as at 30 September 

2009, in Shares at an issue price of $0.20 each with 

the remaining one-third (1/3) to be paid in cash 

following listing on the ASX. These Shares are 

included above. The Options issued to Directors, 

officers and other persons total 8,200,000 million and 

are on the following terms: 

(i) the exercise price of each Option is 20 cents; 

(ii) the Options expire at 5.00 pm WST; 

(iii) Shares issued as a result of the exercise of any 

of these Options will rank equally in all respects 

with previously issued Shares; 

(iv) the Options are exercisable by completing the 

application for exercise of Options and delivering 

the same together with payment for the number of 

Shares in respect of which the Options are exercised 

to the registered office of the Company; 

(v) subject to ASX Listing Rules the Options are 

Director Options First ExpiryDate Second ExpiryDate 

Craig Readhead 2,100,000 2,000,000 on 1/10/12 100,000 on 23/6/2013 

Robert Wanless 1,900,000 1,900,000 on 1/10/12 

Michael Wright 2,500,000 2,000,000 on 11/3/13 500,000 on 23/06/2013 

Chris Wanless 1,900,000 1,900,000 on 1/10/12

freely transferable in whole or part at any time prior 

to expiry, however no application will be made for 

quotation of the Options on the ASX; 

(vi) within 14 days of the receipt of a properly 

executed notice of exercise and application monies 

the Company will issue to the Option holder the 

number of Shares specified in that notice; 

(vii) the Company will apply for official quotation 

of all Shares issued and allotted pursuant to the 

exercise of the Options; 

(viii) option holders are permitted to participate in 

new issues of securities offered to shareholders on 

the prior exercise of the option in which case the 

option holder shall be afforded the period of at least 

10 business days prior to an inclusive of the books’ 

closing date (to determine the entitlements to the 

issue) to exercise the Option; and 

(ix) in the event of any reorganisation (including 

consolidation, subdivision, reduction or cancellation) 

of capital of the Company, the rights of Option 

holders are to be changed to the extent necessary to 

comply with ASX Listing Rules on a reorganisation of 

capital at the time of the reorganisation. 

11.7 Consents 

Each of the parties referred to in this section: 

a) does not make, or purport to make any 

statement in this Prospectus other than those referred 

to in this section; and 

b) to the maximum extent permitted by law, 

expressly disclaims and takes no responsibility for 

any part of this Prospectus other than a reference to 

its name and a statement included in this Prospectus 

with the consent of that party as specified in this 

section. 

JL Geological Services Pty Ltd has given and has not, 

before lodgement of this Prospectus, withdrawn its 

consent to being named as the independent geologist 

in the form and context in which it is named and to 

the inclusion of the Independent Geological Report 

included in section 5 of the Prospectus in the form 

and context in which it is included. 

Exploration Alliance Ltd has given and has not, 

before lodgement of this Prospectus, withdrawn its 

consent to being named as the independent geologist 

in the form and context in which it is named and to 




ERCOSPLAN Ingenieurgesellschaft Geotechnik 

und Bergbau mbH has given and has not, before 


to being named as the independent geologist in 

the form and context in which it is named and to 




Allion Legal has given and has not, before 


to being named as solicitor for the offer and as the 

independent solicitor reporting on tenements in 

the form and context in which it is named and to 

the inclusion of the Independent Solicitor’s Report 



Galaxy has given and has not before lodgement 

of this Prospectus, withdrawn its consent to being 

named and statements attributed to it in the form 

and context in which those statements appear in this 

Prospectus. 

Stantons International has given and has not, 

before lodgement of this Prospectus, withdrawn 

its consent to being named as the independent 

accountant and auditor of the Company in the 

form and context in which it is named and to the 

inclusion of the Independent Accountant’s Report 



11.8 Interests of Experts and Advisers 

Other than as set out below or elsewhere in this 

Prospectus: 

a) no person named in this Prospectus as 

performing a function in a professional, advisory or 

other capacity in connection with the preparation or 

distribution of the Prospectus, any promoter of the 

Company [or broker to the Issue], holds, or held at 

any time during the two years before lodgement of 

this Prospectus with the ASIC, any interest in: 

(i) the formation or promotion of the Company; 

(ii) property acquired or proposed to be acquired 

by the Company in connection with its formation or 

promotion or in connection with the Offer; or 

(iii) the Offer; and 

b) no amounts have been paid or agreed to be 

paid, and no benefits have been given or agreed to 

be given, to any of those persons in connection with 

the formation or promotion of the Company or the 

Offer. 

Allion Legal has acted as solicitor to the Offer and 

provided advice and assistance in relation to certain 

aspects of this Prospectus, the independent solicitors 

report, the Company’s due diligence regime and 

enquiries and in relation to its application and 


99

100 


admission to ASX. In respect of these services, 

Allion Legal will be paid approximately $30,000. 

JL Geological Services Pty Ltd has acted as the 

independent geologist for the Company’s Australian 

projects and has prepared the Independent 

Geological Report included in section 5 of this 

Prospectus. JL Geological Services Pty Ltd has been 

paid $54,400 (plus GST) in respect of these services. 

Exploration Alliance Ltd has acted as the independent 

geologist for the Company’s Mongolian projects and 

has prepared the Independent Geological Report 

included in section 4 of this Prospectus. Exploration 

Alliance Ltd has been paid $31,900 (plus GST) in 

respect of these services. 

ERCOSPLAN Ingenieurgesellschaft Geotechnik 

und Bergbau mbH has provided information in 

connection with the Company’s Mongolian projects 

for the Independent Geological Report included in 

section 4 of this Prospectus. Ercosplan has been 

paid $30,100 in respect of these services. 

Stantons International has acted as the 

independent account to the Offer and prepared 

the Independent Accountant’s Report included 

in section 8 of this Prospectus. Stantons 

International will be paid $12,000 (plus GST) in 

respect of these services. Stantons International 

has agreed to act as auditor to the Company and 

will receive fees for rendering these services in 

accordance with its normal time based charges. 

11.9 Litigation 

Legal proceedings may arise from time to time 

in the course of the Company’s business. As at 

the date of this Prospectus, litigation searches 

confirm that the Company is not involved in any 

legal proceedings, nor so far as the Directors 

are aware, are any legal proceedings pending or 

threatened against the Company the outcome of 

which will have a material adverse effect on the 

business or financial position of the Company. 

11.10 Expenses of the Offer 

The total expenses connected with the Offer are 

estimated to be up to approximately $640,000 

assuming a $8 m. These expenses will be borne by 

the Company. 

$4m raising $8m raising 

Investigating 

Accountant’s 

Report 

$ 12,000 $12,000 

Solicitor’s Report $30,000 $30,000 

Independent 

Geologists Report 

(Australia) 

$54,400 $54,400 

Independent 

Geologists Report 

(Mongolia) 

$62,000 $62,000 

Other Legal and 

Related Costs 

$5,400 $5,400 

Administration, 

printing and other 

costs 

$24,500 $24,500 

Broker Fees and 

Commissions 

$200,000 $400,000 

Lodgement and 

Listing Fees 

$47,151 $51,375 

Total $435,451 $639,675 

11.11 Restricted Securities 

ASX may classify certain existing Shares on issue in 

the Company (as opposed to those to be issued under 

this Prospectus) as being subject to the restricted 

securities provisions of the ASX Listing Rules. If 

so classified, such Shares would be required to be 

held in escrow for a period determined by ASX and 

would not be able to be sold, mortgaged, pledged, 

assigned or transferred for that period without the 

prior approval of ASX. 

11.12 Tax Considerations 

Investors should seek and rely on their own 

professional taxation advice in relation to an 

investment in the Company. 

11.13 Distribution of Prospectus 

The Prospectus has been prepared by the Company. 

In preparing the Prospectus, the Company has taken 

reasonable steps to ensure that the information in 

the Prospectus is not false or misleading. In doing 

so, the Company has had regard to the prospectus 

requirements of the Corporations Act. 

Prospective investors should read the full text of the 

Prospectus as the information contained in individual

sections is not intended to and does not provide a 

comprehensive review of the business and financial 

affairs of the Company nor the securities offered 

pursuant to the Prospectus. 

No persons is authorised to give any information 

in relation to or to make any representation 

in connection with the Offer described in the 

Prospectus that is not contained in the Prospectus. 

Any such information or representation may not 

be relied upon as having been authorised by the 

Company in connection with the Offer. 

The Prospectus provides information to assist 

investors in deciding whether they wish to invest 

in the Company and should be read in its entirety. 

If you have any questions about its contents or 

investing in the Company you should contact your 

stockbroker, accountant or other financial adviser. 

11.14 Non-Resident Investors 

The Prospectus does not constitute an offer in any 

country or place in which, or to any person to 

whom, it would not be lawful to make such an offer. 

The distribution of the Prospectus in jurisdictions 

outside Australia may be restricted by law and 

therefore persons who come into possession of the 

Prospectus should seek advice on and observe any 

of these restrictions. Failure to comply with these 

restrictions may violate securities law. Applicants 

who are resident in countries other than Australia 

should consult their professional advisers as to 

whether any governmental or other consents are 

required or whether any other formalities need 

to be considered and followed to enable them to 

subscribe for Shares. 

The Prospectus does not constitute an offer in any 

place in which, or to any person to whom, it would 

not be lawful to make such an offer. 

Intending investors resident outside Australia should 

first consult their professional advisers as to whether 

or not governmental or other consents are required, 

or whether formalities need to be observed to 

enable them to invest. Intending non-resident 

investors should also seek advice in respect of the 

taxation effect of an investment in the Company and 

dividends that the Company may distribute in the 

future. 

The return of a duly completed Application Form 

will be taken to constitute a representation and 

warranty that there has been no breach of such laws 

and that all necessary approvals and consents have 

been obtained. 

No action has been taken to register or qualify the 

Shares or the Offer, or otherwise to permit a public 

offering of the Shares in any jurisdiction outside 

Australia. 

11.15 Privacy 

The Application Form accompanying this Prospectus 

requires you to provide information that may be 

personal information for the purposes of the Privacy 

Act 1988 (Cth) (as amended). The Company (and 

its share registry on behalf of the Company) may 

collect, hold and use that person information in 

order to assess your Application, service your needs 

as a Shareholder and provide facilities and services 

that you request and to administer the Company. 

Access to information may also be provided to the 

Company’s agents and service providers on the basis 

that they deal with such information in accordance 

with the Company’s privacy policy. 

If you do not provide the information requested of 

you in the Application Form, the Company’s share 

registry may not be able to process your Application 

or administer your holding of Shares appropriately. 

Under the Privacy Act 1988 (Cth) (as amended), you 

may request access to your personal information 

held by (or on behalf of) the Company. You can 

request access to your personal information by 

telephoning or writing to the Company to the 

attention of the Privacy Officer. 


101

102 

12 - Directors’ Statements; plus Glossary 

12 - Directors’ Statements 

This Prospectus is issued by the Company and its issue has been 

authorised by a resolution of the Directors. 

In accordance with Section 720 of the Corporations Act, each Director 

has consented to the lodgement of this Prospectus with the ASIC and 

has not withdrawn that consent. 

Dated: 26 October 2009 


Chairman 

For and on behalf of 

General Mining Corporation Limited

Glossary 

The following defined terms apply throughout this Prospectus unless the context requires otherwise: 

“$” means Australian dollars unless otherwise specified; 

“ACH Clearing Rules” means the operating rules of Australian Clearing House Pty Limited ACN 

001 314 503; 

“Applicant” means a person who completes and lodges an Application Form; 

“Application” means an application for Shares pursuant to this Prospectus; 

“Application Form” means the application form attached to this Prospectus; 

“ASIC” means the Australian Securities & Investments Commission; 

“ASTC Rules” means the settlement rules of Australian Settlement and Transfer 

Corporation Pty Ltd; 

“ASX” means ASX Limited (ACN 008 624 691); 

“ASX Listing Rules” means the Listing Rules of ASX as amended from time to time; 

“Closing Date” means the last date on which Application Forms may be submitted; 

“Company” or “GMM” means General Mining Corporation Limited 

(ABN 95 125 721 075); 

“Constitution” means the Constitution of the Company; 

“Corporations Act” means the Corporations Act 2001 (Cth); 

“Directors” or “Board” means the directors of the Company as at the date of this Prospectus; 

“Exposure Period” means the period of seven days after the date of lodgment of this 

Prospectus with the ASIC, which period may be extended by the ASIC by 

not more than seven days pursuant to Section 727(3) of the Corporations 

Act; 

“Issue” means the issue of up to 40,000,000 Shares under this Prospectus; 

“Offer” means the offer of Shares pursuant to this Prospectus; 

“Official List” means the official list of ASX; 

“Opening Date” means the first date on which Application Forms can be received; 

“Priority Offer” means an offer of Shares made to Galaxy shareholders as at 5.00 p.m. 

WST on 26 October, 2009 with a registered address in Australia; 

“Prospectus” means this prospectus dated 26 October 2009; 

“Option” means an option to be issued a Share; 

“Shares” means fully paid ordinary shares in the capital of the Company; 

“Shareholder” means a holder of a Share(s); 

“Share Registry” means Advanced Share Registry Ltd; 

“Shoemaker Sale 

Agreement” 

“Shoemaker Joint 

Venture Agreement” 

means the tenement sale agreement entered into between General Mining 

Corporation Ltd and Galaxy Resources Ltd dated 30 June 2009; 

means the joint venture agreement entered into between General Mining 

Corporation Ltd and Galaxy Resources Ltd dated dated 30 June 2009; 

“Stategic Alliance” means the Strategic Alliance Agreement entered into between General 

Mining Corporation Ltd and Galaxy Resources Ltd dated 26 October, 

2009; and 

“WST” means Western Standard Time. 


103

104

Offer Application Form 

This Application Form relates to a prospectus dated 26 October 2009 (“the 

Prospectus”) and the instructions overleaf. No shares will be issued pursuant 

to the Prospectus later than 13 months after the date of the Prospectus. 

A 

C 

D 

E 

F 

Before completing this Application Form, you should carefully read the Prospectus dated 26 October 2009 and the instructions overleaf. 

No applications will be accepted later than 5.00pm (WST) 4 December 2009 (subject to the Company’s right to vary this date). 

PLEASE READ ALL INSTRUCTIONS ON THE REVERSE OF THIS FORM 

I/we apply for 

Shares in General Mining Corporation Limited at $0.20 per Share or 

(minimum application is 10,000 shares) or such lesser number of Shares 

which may be allocated to me/us by the Directors. 

Full Name 

Title, Given Name(s) & Surname or Company Name 

Joint Applicant #2 

Joint Applicant #3 

, 

Postal address 

Unit Street Number Street Name or PO Box /Other Information 

ACN / ARBN 

(For Companies only) 

, 

Broker/Dealer Stamp 

I/we lodge full Application Money 

A$ . 0 0 

(Cheques to be payable to 

“General Mining Corporation Limited – Application Account”) 

Payment details - cheques to be payable to “General Mining Corporation Limited - Application Account” 

I Drawer Bank 

BSB Number Account Number 

Amount of cheque 

B 

Adviser Code 

Share Registrar Use Only 

Broker Code (office use) 

City / Suburb / Town State Postcode 

Contact Name Home Telephone Number 

G CHESS Participant: 

Holder Identification Number (HIN) 

H 

X 

Galaxy Shareholder Priority Offer 

The Company has agreed to set aside 40% of the Shares to be issued under the Offer to Galaxy shareholders as at 26 

October 2009 with a registered address in Australia (“Priority Offer”). Shares will be allocated at the Directors’ discretion. 

Please enter your Galaxy HIN/SRN in the box below if you qualify for the Priority Offer and would like Shares to be 

allocated to you under the Priority Offer. 

Holder Identification Number (HIN) or Securityholder Identification Number (SRN) 

E-mail address 

Tax File Number or exemption Applicant #2 Applicant #3 

DECLARATION 

1. I/We declare that by lodging this Application Form, I/we represent and acknowledge that I/we have received, read and understood the Prospectus to which this Application Form relates. 

I/We hereby authorise the Company to complete and execute any document necessary to effect the allotment and issue of any Shares to me/us. 

2. By lodging this Application Form, I/we declare that this application is completed and lodged according to the Prospectus and that all statements made by me/us are complete and accurate. 

3. I/We also declare that this Application Form is completed according to this declaration and agree to be bound by the terms and conditions set out in the Prospectus and the Constitution of 

General Mining Corporation Limited. 

4. I/We acknowledge that returning the Application Form with the application monies will constitute my/our offer to subscribe for Shares in General Mining Corporation Limited and that no 

notice of acceptance of the application will be provided. 

5. The accompanying Prospectus should be read carefully. An application made using this Application Form will not be valid if another name is substituted for the name printed on the form. 

NO SIGNATURE IS REQUIRED 

TO MEET THE REQUIREMENTS OF THE CORPORATIONS ACT, THIS FORM MUST NOT BE HANDED TO ANY PERSON UNLESS IT IS ATTACHED TO OR ACCOMPANIED 

BY THE PROSPECTUS DATED 26 OCTOBER 2009. 

A$ 

Work Telephone Number 

Please note that if you supply a CHESS HIN but the name and address details on your form do not correspond 

exactly with the registration details held at CHESS, your application will be deemed to be made without the CHESS 

HIN, and any securities issued as a result of the IPO will be held on the Issuer Sponsored subregister.

TREATMENT OF APPLICATION 

The return of an Application Form with your cheque for the application money will constitute your offer to purchase or subscribe for Shares. 

If your Application Form is not completed correctly, or if the accompanying payment is for the wrong amount, it may still be treated as valid. 

The decision of the Company as to whether to treat your application as valid, and how to construe, amend or complete it, shall be final. The decision on the number of 

Shares to be allocated to you shall also be final. You will not, however, be treated as having offered to purchase more Shares than is indicated on the Application Form. 

Investors whose application are not accepted, or are Accepted in respect of a lower number of Shares than the number applied for, will receive a refund of all or part of 

their application money without interest, as applicable. 

CORRECT FORMS OF REGISTRABLE NAMES 

Only legal entities may be registered as holders of the Shares. Applications must be in the full name(s) of natural persons, companies or other legal entities. Shares 

cannot be registered in the name of a trust and no trust can be implied. The name of a beneficiary or any other registrable name may be included by way of account 

description if completed exactly as described in the examples of correct forms of registrable names below. 

Type of Investor Correct 

Form 

of 

Registration 

Incorrect 

Form 

of 

Registration 

Individual 

- Use given name(s) in full, not initials 

Persons under the age of 18 

- Do not use the name of the minor, use name(s) of parent(s)/guardian(s) 

Companies 

- Use company title, not abbreviations 

Trusts 

- Do not use the name of the trust, use name(s) of trustee(s) 

Deceased Estates 

- Do not use the name of deceased, use personal names of executor(s) 

Partnerships 

- Do not use the name of partnership, use personal names of partners 

Clubs/Unincorporated Bodies 

- Do not use name of clubs etc, use personal names of office bearer(s) 

Superannuation Funds 

- Do not use name of fund use name(s) of trustee(s) 

How to complete this form 

A 

B 

C 

D 

E 

JOHN FRED WILLIAMS 

MICHAEL JOHN WILSON & 

SARAH JANE WILSON 

 

JOHN WILLIAMS PTY LTD 


 

JANE MARY MCDONALD 

 

SARAH JANE WILSON & 

MICHAEL JOHN WILSON 

 


 

SARAH WILSON PTY LTD 

 

Please complete all relevant sections of the Application Form in BLOCK LETTERS. 

These instructions are cross-referenced to each section of the Form. 

Shares Applied for 

Insert the Number of Shares you wish to apply for in Section A. The 

application must be for a minimum of 10,000 Shares and thereafter 

must be in multiples of 2,500 Shares. 

Application Monies 

Insert your application money be multiplying the number of Shares 

by 20 cents per share in Section B. 

Applicant Name(s) 

Enter the Full Name(s) and Title(s) of all legal entities that are to be 

recorded as the registered holder(s) of the Shares. You should refer 

to the back of the Application Form for the correct forms of name 

which can be registered. Applications using the wrong form of name 

may be rejected. 

Up to three joint Applicants may register. An account designation 

may be entered on the last line of this section. It should be contained 

within brackets with A/C at the end eg . 

Postal Address 

Enter your Postal Address for all correspondence. All communications 

to you from General Mining Corporation Limited will be mailed to the 

person(s) and address as shown. For joint applications, only one 

address can be entered. 

Contact Name 

Please insert your Telephone Number(s) and contact name in case 

there are irregularities with your application. 

GALAXY SHAREHOLDER PRIORITY OFFER 

As part of the Priority Offer, the Company will set aside 40% of 

the Shares to be issued under the Offer to Galaxy shareholders 

as at 5.00 p.m. WST 26 October 2009 with a registered address 

in Australia (“Priority Offer”). Shares will be allocated under the 

Priority Offer at the Directors’ discretion. 

Please enter your Galaxy HIN / SRN in the grey box on the 

Application form if you qualify for the Priority Offer. 

F 

G 

H 

I 

J.F Williams 

Andrew Wilson I 

J. Williams Co. 

John Williams P/L 

John Williams Family Trust 

Estate of the Late John Smith 

Sarah Wilson & Son 

ABC Tennis Association 

Sarah Wilson Pty Ltd 

Superannuation Fund 

ACN/ARBN 

If the applicant is a company, insert A.C.N. or A.R.B.N 

CHESS 

General Mining Corporation Ltd (the Company) will apply to the ASX to 

participate in CHESS, operated by ASX Settlement and Transfer 

Corporation Pty Ltd, a wholly owned subsidiary of Australian Securities 

Exchange Limited. In CHESS, the company will operate an electronic 

CHESS Subregister of security holdings and an electronic Issuer 

Sponsored Subregister of security holdings. Together the two Subregisters 

will make up the Company’s principal register of securities. The Company 

will not be issuing certificates to applicants in respect of shares allotted. If 

you are a CHESS participant (or are sponsored by a CHESS participant) 

and you wish to hold shares allotted to you under this Application on the 

CHESS Subregister, enter your CHESS HIN. Otherwise, leave this section 

blank and on allotment, you will be sponsored by the Company and 

allocated a Securityholder Reference Number (SRN). 

Tax File Number or Exemption 

Enter the tax file number(s) of the applicants. With a joint holding, only the 

tax file number of two holders are required. 

Cheque Details 

• Make your cheque(s) or bank draft(s) payable to 

“General Mining Corporation Limited - Subscription Account” 

in Australian currency. Your cheque(s) or bank draft(s) must be drawn 

on an Australian bank. 

• Attach your cheque(s) or bank draft(s) to the Application Form where 

indicated. Complete the details of your cheque(s) or bank draft(s) in this 

section 

LODGEMENT OF APPLICATIONS 

Return your completed Application Form and cheque(s) or bank draft(s) to: 


Perth: PO Box 7625 

Cloisters Square WA 6850 

Tel: (08) 9288 3388 

Fax: (08) 9321 6998 

Sydney: PO Box R1931 

Royal Exchange NSW 1225 

Tel: (02) 9024 9118 

Applications must be received at the above address by 5.00pm (WST) 

on 4 December 2009 (subject to the right of the Company to vary this date) 


P O 

13817-GMM-TISG 

G M M


107

108 

Summary 


Perth WA 6000 

Tel: (61 8) 9227 1186 

Fax: (61 8) 9227 8178

Mongolia - General Mining

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