Region:		Alaska
Commodity:		Au
Project Name & Location:		Tushtena
Target Deposit Type & Model:		>1 million ounce high grade vein hosted gold
Land Status:		40 State Prospecting sites
Ownership:		AusMF earning in to 85%

In April 2008 Australian Mineral Fields (“The Company”) signed an agreement with Tushtena Resources Inc (“TRI” a private Alaskan corporation with 100% ownership of the project) granting the Company the right to acquire up to an 85% equity in the Tushtena Project in Alaska. The Tushtena Project represents a project with bulk tonnage and/or high grade vein/shear hosted gold prospectivity and is located in an area that contains such major deposits as Pogo and Fort Knox (Figure 1).

Agreement Summary:

• The agreement allows the Company to earn 80% of the project by spending US$3M within 5 years of the execution of the agreement.
• The Company can earn a further 5% (to a total of 85%) by carrying TRI to completion of a Bankable Feasibility Study (“BFS”). At completion of a BFS, TRI can elect to contribute, or dilute to a 2% Net Smelter Royalty (“NSR”) if TRI dilute below 10%. At the Company’s sole discretion, the Company may elect to make a single payment of $4M to TRI to reduce the NSR to 1% at anytime up until the day prior to commencement of commercial production.
• If TRI elect to contribute, the balance of the carry will be re-payed from 85% of cash flow attributable to TRI on commencement of production.
• The Company has made cash payments to a total of CDN$100,000 to TRI as a result of the execution of the agreement and subsequent successful completion of due diligence.
• The company will complete a minimum of CDN$500,000 of exploration each year, except the first year, during which time the commitment will be CDN$100,000 (also being the minimum expenditure required before being able to exit the project).
• The Company will make annual payments of CDN$100,000 to TRI on the first, and any subsequent anniversaries of the execution of the agreement up until the Company earning 80% of the Project.
• The Company will have a first right of refusal to acquire TRI’s interest in the Project.

Project highlights:

Reports indicate the project contains high grade gold values and visible gold in vein zones, both at surface and depth (confirmed by drilling), and the Company considers that the project has strong potential for bulk tonnage and/or high grade vein/shear zone hosted gold deposits associated with a major carbonate altered shear zone.

Historic unverified reports document rock chip samples of up to 1450 g/t Au having been obtained from the veins (Figure 5). Other samples include 342 g/t, 105g/t, 118g/t and 163.5 g/t Au, and many other samples >0.5 g/t Au. Gold is reported to be often free and visible.
During 1986 and 1987, 10 Diamond drill holes have been reported to have been drilled at the Discovery Zone, in a variety of orientations and with an average depth of only 135m. Best reported results1 include:

• 7ft (2.1m)@ 14.3g/t Au (125ft (38m)) in Hole AR-4
• 3ft (0.9m) @ 9.4g/t Au (295ft (90m)) in Hole AR-3
• 5.7ft (1.76m) @ 7.01g/t Au (32.3ft (10m)) in Hole AR-9

Mineralization is reported to occur in dominantly east-northeast trending, steep northwest dipping quartz-arsenopyrite-carbonate veins, veinlets and shear veins up to 0.5m thick. Of the 10 drill holes, the Company interprets that only four holes, for a total of 528m were drilled in an orientation likely to intersect the mineralised veins. Three of those four holes intersected the significant mineralisation detailed above.

Since signing of the Tushtena Agreement the Company has become aware of additional drilling in the Discovery and RS zones area. In 2000 Inmet Mining Corporation (IMC) drilled 8 diamond holes (two of which were abandoned well before target depth) in the target area for a total of approximately 1500m. The holes were drilled broadly along a line trending in a north westerly direction across the western side of the target (Figure 5), and all but one of the holes were reported to have been drilled to the north east, which, as described above, is considered to be a sub-optimal drilling direction for targeting the mineralised veins.  While at present no hard data has been located in respect to the results returned from these holes, the Company is pursuing avenues in order to assess the significance of these drill holes. In 1998 IMC reportedly conducted further soil sampling, extending the sampling grid to the north of the RS target zone (Figures 3, 4 and 5). That data is currently being compiled and spatially located.

The Discovery zone, the most significant and advanced prospect to date, is co-incident with a reported 1 km long >250 ppb Au and >500 ppm As in soil anomaly (Figures 3, 4 and 5).

Project Location and access:

The project area comprises approximately 25 square kilometers in the Yukon Tanana Terrane in the east central Alaska portion of the Tintina Gold Belt, which is host to several world class gold districts (Figure 1). The project is located 20 miles west-southwest of Tok (the junction of Alaska Highway and Glen Highway) and the central parts of the property are only 13km south of the paved Alaska Highway. There is good access to the project by skidder or caterpillar trail 32km up the Tok River to central portions of the property along Com Creek. The property is also easily helicopter accessible, with a helicopter available at Delta Junction to the North West. Nearby accommodation can be found in Tok, or at Cathedral Rapids bed and breakfast only 10km north of the property on the Alaska Highway.

Figure 1: Location plan for Tushtena Project.

HIGHLY EXCITING NEW OPPORTUNITY WITH EXISTING EVIDENCE OF STRONG GOLD MINERALISATION

The shallow to moderate west-dipping Itra Fault (or Elting Creek Fault) passes through the centre of the property and separates upper greenschist grade metavolcanic and metasedimentary rocks of the Mississippian-Devonian Jarvis Belt (formerly the Delta Schist Belt) on the west from Devonian and older amphibolite grade quartzo-feldspathic gneisses and schists of the Macomb Belt to the east (Figure 2).

The Itra Fault is a major regional shear zone defined by a 150 to 300m thick high-strain zone which on the property is coincident with a broad zone of greenschist grade Fe-carbonate-sericite alteration and gold mineralization. Metamorphism and deformation are interpreted to be mid-Cretaceous in age, consistent with other districts in the region.

The principal area of gold prospects and showings defined to date occur along and adjacent to an approximately 5 km strike length of the Itra Fault where alteration is widest, and where the fault is discordant to lithologies in its hanging wall (Figure 2). Gold mineralization is reported to occur within both the hanging wall and footwall of the Itra Fault. The gold is reported as being associated with sets of quartz-arsenopyrite +/- based metal +/- stibnite veins, stockworks, and breccias.
The Company believes that strong potential exists for:

• A bulk tonnage gold resource comprised of the cumulative influence of high grade veins and veinlets
• Individual high grade vein targets
• Associated high grade shear veins developed along strands of the Itra Fault and its splays, such as the Discovery Fault

The subsurface intersection of the Itra fault with the favourable quartz-sericite-chlorite-Fe-carbonate schist may be particularly prospective. The Company will be aggressively exploring the Project area, with planned initial exploration including:

• Project-wide rock chip sampling for lithogeochemical and hyperspectral analysis, combined with geological mapping of the project.
• Extension of the soil grid
• Construction of a first pass 3D geological model for the project
• First pass Diamond drilling to test gold anomalies and geological target areas

work completed to date by Australian Mineral Fields

During a recent field visit to the Tushtena Project the company completed a program of due diligence sampling of diamond core drilled in 1986, 1987 and 2000. The sampling was undertaken to verify reported results from this drilling which had formed part of the basis on which the Company made its decision to enter into the Joint Venture.  In addition to re-sampling reported intersections the Company also undertook sampling of sections of drill core that appear not to have been previously sampled.

Due diligence repeat sampling results:

Results from the re-sampling program have been returned from three of the diamond holes (AR-4, AR-7 and AR-9). These assays have demonstrated good correlation with the high grade results reported previously, and in some cases an increase in grade was returned. Table 1 below defines the original reported intersections² in comparison with the newly received re-sample results³.  

Table 1: Comparison of previously quoted historical intercepts with re-sample results received to date

The historically reported interval of 116ft @ 1.064g/t Au from 125ft in AR-4 was not repeated as a consistently mineralised interval.   Additional data recently made available to the Company shows that the interval includes several high grade intercepts and most other intervals are less than 1g/t Au.  The 2008 re-sampling shows a similar pattern.   All intercepts of greater than 1g/t Au are reported in Table 2 below.

Table 2: All results received to date >1g/t Au with comparable assay results from 1986 sampling where available

Notes: UTM coordinates are Zone 7 (NAD83)4, all widths are down hole widths, true thicknesses unknown. For details of sampling and analysis techniques see footnotes 2 and 3.

New sampling and intersections:

On review of the drill core from the 1986, 1987 and 2000 programs, some of which has been located in a storage facility in Fairbanks, Alaska, and some at the 1986/1987 exploration camp near the project, the Company has become aware of a substantial amount of previously un-sampled material. Significant portions of this un-sampled core are visually strongly to intensely altered. As such, in addition to the due diligence re-sampling program, the Company initiated a program to sample this core. Although holes AR-4, AR-7 and AR-9 were some of the historically more completely sampled holes, of note is the intercept from 168ft to 172ft in AR-7 shown above in Table 2, which had not been previously sampled, but returned gold values of 4ft @ 2.19g/t Au.

Figure 2: Tushtena Discovery Zone 1986/1987 Drill location plan (UTM Zone 7 (NAD83))

Impact on Project: The Company considers that these results provide both strong confidence as to the validity of the historically reported results, and suggest that the tenor of mineralisation may be better than previously thought. In particular the return of a new intersection where sampling had not been previously completed indicates that mineralisation may not be as constrained as historically thought.

HISTORIC EXPLORATION RESULTS

The Tushtena Project area was first explored for antimony with the discovery of Tok Antimony vein prospect on Stibnite Creek in the 1960’s. Intermittent production is reported to have occurred until the early 1970’s, and federal claims covering the prospect are believed to have lapsed in the 1980’s.

The Company will be examining the economic potential of the antimony occurrences within the project area. Antimony is used in lead batteries, lead and copper alloys, flame retardants, and in the production of semiconductors.

The area was explored in the late 1970’s to 1990’s for VMS deposits of the Delta district by Resource Associates of Alaska (RAA), Gulf Minerals, Anaconda, and Inco.

In 1985, stream sediment surveys and regional reconnaissance prospecting by RAA located auriferous Au-As bearing vein systems on the AR and Discovery ridges within the property. Follow-up mapping and rock-chip sampling were initiated. In 1986 the AR Joint Venture was formed between RAA and Meridian Minerals to explore (1) several surface showings containing high-grade gold-bearing veins and structures, and (2) the area of the current property for additional gold occurrences.

Exploration in 1986 comprised further prospecting, geological mapping, VLF-EM and ground magnetometer surveys, and 6,697ft (2,041m) of diamond drilling in 17 diamond drill holes, the latter focused in the Discovery Zone area. In 1987, a further 4534 ft (1,381m) of drilling completed in 9 diamond drill holes in trail-accessible prospects in the south-central part of the property along Com Creek south of the Discovery Zone. Between 1998 and 2000 Inmet Mining Corporation conducted soil sampling north of the RS Zone target and diamond drilling in the Discovery Zone target area as described above.

The core of the original AR property containing the principal showings was re-staked in 2007 by Tushtena Resources.

Figure 3: Geological interpretation of the Tushtena Project from TRI report.

Figure 4: Tushtena Project gold in soils results from TRI report (grid is in feet).

Figure 5: Tushtena Project arsenic in soils results from TRI report.

Figure 6: Plan of Discovery and RS Zones area showing soil anomaly outlines drill collar positions and significant intersections. Black text refers to original 1986 intersections, red text refers to 2008 re-sampling program. Abn refers to abandoned holes.

Why Alaska

The Company has previously indicated that the main area of focus would be Western Australia, due to the high degree of prospectivity, mining friendly legislation and good infrastructure. These criteria continue to be true within Western Australia and, as such, the Company continues to have a strong focus within this area. However, in developing the exploration model for the projects which the Company holds in the Albany-Fraser province of Western Australia (Salmon Gums, Fraser Range North and Cundeelee) the Company recognized that this model could be applied elsewhere in the world. Two areas in which the Company believes this to be true include the Grenville Province of eastern Canada (hence the Laurentian Goldfields Alliance) and Alaska, from which some of the aspects of the Albany-Fraser model were adapted. Alaska enjoys similar pro-exploration and mining legislation, with the area of the project in particular subject to reasonable permitting conditions. As such, the Company feels that this opportunity remains within the overall business strategy of the Company and was ultimately of sufficient quality to cause the Company to divert from its geocentric business model. The Company is also able to utilize personnel experienced in Alaska, meaning that there should only be minimal diversion of focus from Australian projects.

¹ All intercepts quoted are down hole depths, true widths are either not known or not defined.

² The majority of the 1986 samples from were 5 foot or 2 foot, split core (halved) composites. However, veins were frequently sampled separately resulting in some very narrow, high-grade samples. The 1986 samples were analysed at Chemical and Mineralogical Services Inc in Salt Lake City, Utah and all samples which returned greater than 3000 ppb Au were resubmitted for metallic screen fire assay with multiple burns at Rocky Mountain Geochemical in Colorado.

³ Where possible the 2008 sampling program replicated the 1986 samples quartering the remaining core. Where there were no historical samples, the core was sampled as 9 to 10 foot, split core (halved) composites. The 2008 samples were analysed at Alaska Analytical Laboratories in Fairbanks by 30 gram fire assay with AA finish.

⁴ While all reasonable efforts have been made to correlate local grid with UTM Zone 7 (NAD83), the exact transformation between the two coordinate systems is not defined.