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EPC789JUANDAH WEST, QUEENSLAND

RELINQUISHMENT REPORTFOR PERIOD ENDING 24TH FEBRUARY 2005

for

XSTRATA COAL QUEENSLAND PTY LTD

David R. Green & Keelin Chestnutt

24th April 2005GREEN EXPLORATION & MINING SERVICES PTY LTD 90 ROMEA STTHE GAP QLD 4061PH (07) 3300 1379FAX (07) 3300 1879

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TABLE OF CONTENTSPage

1.0 Summary 3

2.0 Introduction 4

3.0 Regional Geology 6

3.1 Location 6

3.2 Stratigraphy and Sedimentation 8

3.3 Structure 13

4.0 Previous Work 14

5.0 Work in Relinquished Areas 16

5.1 Data Compilation 16

5.2 Native Title Status 16

5.3 Photogeology 17

5.4 2004 Drilling Program 17

5.5 Review of 2004 Drilling Program 19

5.6 Stratigraphic Correlation 19

6.0 Conclusions 23

7.0 References 24

LIST OF FIGURES

1. Location and Sub-Block Details attachment

2. Surat Basin Structural Geology 7

3. Interpretive Geology of the Northern Surat Basin 12

4. Borehole Locations - Previous Drilling attachment

5. Photogeology Interpretation attachment

6. Borehole Locations - 2004 Drilling attachment

7. Stratigraphic Correlation attachment

LIST OF TABLES

1. EPC789 Sub-blocks Relinquished 5

2. Stratigraphy of Wandoan Area 11

3. Progression of Wandoan Exploration Tenure 15

4. 2004 Drilling - Summary 18

5. 2004 Drilling - Gas/Water Data 19

6. Stratigraphy of the Walloon Subgroup 21

7. Summary of Variation within SBSG 22

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LIST OF APPENDICES

A. Photogeological Interpretation Report

B. 2004 Drilling - English Language Logs

C. 2004 Drilling - Stratigraphic Columns and Geophysical Logs

D. 2004 Drilling - las files

0 SummaryThis report summarises the work undertaken on the areas relinquished from Exploration

Permit for Coal (EPC) 789 at 24 th February 2005. Evaluation of the available data suggests

that the areas relinquished are in barren sections of the Walloon Coal Measures or contain

seams that are too thin and/or deep to be considered prospective for mineable coal deposits.

Copies of company reports were obtained from the Department of Natural Resources and

Mines (DNRM) and borehole data was extracted. All data was validated and entered to a

digital database. A photogeological study was completed and GIS files provided. All

available data was utilised to evaluate the correlation of stratigraphic units across the project

area. Field activities which occurred during this period included a drilling program of which

fifteen rotary chip boreholes were in the area relinquished. Results of this drilling were

incorporated into the existing database and reviewed.

0 IntroductionEPC789 (Juandah West) is located some 85km west of the town of Wandoan on the

Leichhardt Highway. Wandoan is 70km north of Miles which is 340km west of Brisbane. The

regional location of the Wandoan coal area is shown on Figure 1 which also describes the 125

sub-blocks which are relinquished from the original 300 of the Permit. The relinquished sub-

blocks are also presented as Table 1.

The western margin of this EPC is marked by longitude 149° 00’ and contained in the east by

149°15’. It extends north-eastwards to 25°45’ and 149°22’.

EPC789 was granted to Mount Isa Mines Coal Pty Ltd (MIMC) from 25 th February 2003 for a

period of 3 years. In June 2003 MIM Holdings Ltd (MIM) was acquired by Xstrata PLC

(Xstrata) and MIMC was renamed to Xstrata Coal Queensland (XCQ). In November 2004

XCQ sold 12.5% of its interest in this project to ICRA RPW PL and 12.5% to Sumisho Coal

Australia PL. Mineral Development Licences (MDL)’s 221, 222, 223, 224 are also held by

XCQ (75%), ICRA RPW PL (12.5%), and Sumisho Coal Australia PL (12.5%).

The coal resources of the Juandah West area occur in the Jurassic Walloon Coal Measures

of the central-north part of the Surat Basin in South East Queensland.

This report describes the known geology of the area and the work undertaken in the EPC in

the areas relinquished from the EPC at 24th February 2005.

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Table 1: EPC789 Sub-blocks Relinquished

BLOCK

IDENTIFICATIONMAP

BLOCK SUB-BLOCKS NUMBER

Charleville 1576 d, e, j, k, o, p, t, u, y, z 10

Charleville 1577 a, b, c, f, g, h, l, m, n, q, r, s, v, w, x 15

Charleville 1647 p, u, z 3

Charleville 1648 d, e, g, h, j, l, m, n, o, q, r, s, v, w, x 15

Charleville 1719 e, j, k, o, p, t, u, y, z 9

Charleville 1720 a, b, c, f, g, h, l, m, n, q, r, s 12

Charleville 1789 a, b, c, d, e, f, g, h, j, k, l, m, n, o, p 15

Charleville 1790 a, b, c, d, e, f, g, h, j, k, l, m, n, o, p 15

Charleville 1791 a, b, c, d, e, f, g, h, j, k, l 11

Charleville 1861 p, u, z 3

Charleville 1862 l, m, q, v 4

Charleville 1863 m, n 2

Charleville 1933 v, w, x 3

Charleville 1935 p, t, u, v, w, x, y, z 8

TOTAL 125

0 Regional Geology3.1 Location

The Surat Basin lies west of the Clarence-Moreton Basin and extends from southern

Queensland into northern New South Wales. It extends over an area of 270,000km2 with a

length of 800km and a width of 450km. It forms an eastern lobe of the Mesozoic Great

Artesian Basin, containing up to 2,500m of Jurassic clastic continental sediments and Early

Cretaceous marine beds.

These sediments accumulated in the slowly subsiding Taroom Trough, a basement half-

graben, bounded on the east by the north-south trending Leichhardt-Burunga Fault zone (a

line of thrust faults initiated by uplift of the eastern block associated with Permo-Triassic

plutonism) and on the west by the Comet Platform (Figure 2). They are relatively undisturbed

and conformable throughout the basin with regional dips of no more than two degrees WSW.

The Taroom Trough extends over some 50,000km2 and contains up to 9,000m of sediments.

The basin is bounded in the north by the Auburn Arch, whilst in the south the western edges

of the New England fold belt limit its extent. Surat Basin sediments extend eastward into the

Moreton Basin across the Kumbarilla Ridge and in the west interfinger with those of the

Eromanga Basin over the Nebine Ridge. These two basement ridges mark the outer limits of

the Surat Basin. The basin has been eroded in its northern reaches.

The Wandoan coalfields are located within the North West portion of the Surat Basin, south-

eastern Queensland, approximately 400km west-north-west of Brisbane.

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Figure 2: Surat Basin Structural Geology

2 Stratigraphy and Sedimentation

The evolution of the Surat Basin as well as the Eromanga and Moreton Basins, followed the

Late Triassic (Norian) orogeny. Uplift at the end of the orogeny exposed the newly stabilised

craton to erosion resulting in the deposition of sediments in relatively small, nucleated

intermontane depressions. By the beginning of the early Jurassic, sedimentation was well

established with deposition of fluvial sands and silts. Cyclic fluvial and lacustrine conditions

prevailed throughout the Middle Jurassic, probably in response to eustatic changes in sea

level or epeirogenic movements varying the gradient of the major drainage systems. The

economically significant Walloon Coal Measures of the northern Surat were deposited at this

time. Volcanic debris, common in the middle Jurassic sediments, indicates

penecontemporaneous volcanism not far from the source. However no intrusives (plugs, sills

or dykes) have been mapped within the Walloon Coal Measures. Non-marine sedimentation

continued throughout the Late Jurassic with the formation of thin lenticular coal seams in the

Westbourne Formation.

The stratigraphic record of the Surat Basin reveals at least six cyclothems where conditions

were favourable to coal formation (Exon, 1976). In each case, the coal horizon occurs at the

top of an upward-fining non-marine sequence representing a progression from a low energy

fluvial to a paludal, and in places paralic environment. These Jurassic–Cretaceous fluvial

cycles were generally transgressive, each comprising a range of environments, interrupted

by changes in base level, probably due to minor basement movements or eustatic changes.

The coal seams of the Walloon Coal Measures developed towards the end of Exon’s second

cycle and are typically interbedded with mudstone and siltstone and occasional thin bands of

laminated shale. Two sub-cycles within the Walloon Sub Group were recognised by Jones &

Patrick (1981). These were the Taroom Coal Measures (lower) and the Juandah Coal

Measures (upper) separated by the Tangalooma Sandstone. The new subdivision was

related to Swarbrick’s 1973 intervals.

Deposition of the Walloon Coal Measures occurred in warm, relatively humid climatic

conditions where coniferous gymnosperms dominated the landscape. There is no evidence

of marine or marginal-marine deposition. Instead the coals are a freshwater succession of

medium-grained channel sands, finer grained levee and crevasse-splay sands and silts, and

backswamp facies sediments (Ward et al, 1995).

The coal measures were most likely deposited under low energy fluvial conditions on wide

flood plains associated with highly braided, sinuous river systems. Extensive shallow water

backswamps developed on the lower-lying portions of the floodplains, incorporating areas of

deeper water in abandoned channels and oxbow lakes. Coniferous gymnosperms,

particularly the Araucarians generated acidic, reducing conditions in the deeper water lakes

into which there was a continuous supply of vegetation from the surrounding dense flora.

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This would have provided excellent conditions for lignin and exinite preservation and for the

subsequent conversion to peat.

Floods periodically invaded the levees bordering active river channels, depositing coarser

clastic material on or near the levees fanning outwards to the floodplains and backswamps.

Subsequent minor reworking of the fine layers of silt and mud localised their distribution to

shallow depressions on the floodplains giving rise to the lenticular mudstone partings seen

throughout the seams.

Less frequent major flooding generated crevasse splay deposits across the floodplains and

backswamps by reworking the levee bank sediments and carrying a heavier load of coarser

grained material in the higher velocity flood waters. These floods were severe enough to

carry the arenaceous sediments across the back swamps and into the lakes, breaking the

continuity of the accumulating peat deposits. Maintenance of the backswamp environment

close to the water table, through the effects of differential compaction combined with either

slow regional epeirogenic downwarp or eustatic sea level changes maximised coal

development. Thus the thicker coal intervals are thought to have developed at the site of

lakes. Much of their accumulated sediment was derived from fringing forest vegetation by

wind rather than water thus preserving their lignin as well as the more resilient sub-inertinitic

and exinitic material. Fungal and bacterial degradation was minimised by rapid submersion

into acidic reducing waters at the bottom of lakes producing perhydrous vitrinite/liptinite rich

coals.

Since the late Jurassic the Surat Basin has been stable. The last sedimentary episode was

marked by a marine transgression in the Early Cretaceous. The sea withdrew again in the

Late Cretaceous giving way to deep weathering in the Tertiary. Subsequent erosion has

since stripped this profile from the northern areas of the Basin. To the south of Wandoan,

extensive areas of deeply weathered material form plateaux along major divides.

The sequence of economic interest in the Wandoan coalfields lies within the Jurassic

sediments, which span the Hutton Sandstone through to the conformable Injune Creek Group

which ranges from the Eurombah Formation to the Westbourne Formation. The Injune Creek

Group sediments are readily traceable across the basin from Chinchilla in the south-east to

Injune in the north-west. Deep weathering and/or Tertiary and Quaternary cover has

obscured outcrops of this Group. Some scattered outcrops occur in creeks on the western

flank of the Mimosa Syncline of the region exposed by recent erosion. In contrast, outcrops

on the eastern side are obscured by deep weathering. Lithologies within the Injune Creek

Group are dominated by lithic and feldspathic sandstones (which are often calcareous

cemented), siltstones, mudstones, and coal. The relevant Injune Creek Group has been

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summarised by Swarbrick (1973) dividing it into 11 intervals based on stratigraphic drilling

carried out between 1967 and 1972 by the Geological Survey of Queensland.

The Walloon Coal Measures occur between a regressive stage of deposition represented by

the Hutton Sandstone and a transgressive phase resulting in the Gubberamunda

sandstones. These sediments dip gently south-east with minimal syn or post depositional

deformation. Two major coal horizons occur at the top of the Taroom Coal Measures (lower)

and the Juandah Coal Measures (upper). The coals occur within a belt of sub-contiguous

deposits which subcrop in an arc from the south of the Wandoan township to north-west of

Taroom then to the south-west towards Roma.

Descriptions of the main stratigraphic units are given in Table 2 and are shown in Figure 3.

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Table 2: Stratigraphy of the Surat Basin – Wandoan area(after Jones & Patrick, 1981)

AGE FORMATION DESCRIPTION

Late

Jurassic

Gubberamunda

Sandstone

Fine to coarse and pebbly, poorly sorted, friable,

cross-bedded, quartzose to sub-labile sandstone.

Minor interbedded siltstone and mudstone. Upper

fluvial depositional environment

Middle

to

Late

Jurassic

Westbourne

Formation

Finely interbedded lithic sandstone, mudstone and

coal in lower part. Interbedded siltstone and lithic

sandstone in upper part. Lacustrine deposition

grading to point bar at the top

Springbok

Sandstone

Litho-feldspathic sandstone, medium to coarse,

porous and friable, some calcareous and cemented

beds, minor siltstone, mudstone and coal seams.

Lower part trough cross-stratified with authigenic

matrix, upper part poorly cemented, exhibiting point

bar depositional features

Middle

Jurassic Wal

loon

Sub

-Gro

up

Juandah

Coal

Measures

Lithic, labile sandstone, interbedded with siltstone,

mudstone and coal, with coal deposition more

frequent towards top. Argillaceous component of

sandstone is mainly authigenic

Tangalooma

Sandstone

Lithic, labile sandstone, medium grained with

argillaceous matrix. Numerous intraformational

conglomerate beds. Sedimentary structures suggest

channel deposition grading to point bar deposition

Taroom

Coal

Measures

Sub-labile, medium grained sandstone grading

upwards to interbedded sandstone, siltstone,

mudstone and coal

Eurombah

Formation

Lithic to sub-labile, poorly sorted, medium grained

sandstone with argillaceous matrix. Minor

siltstone and mudstone in basal section, more

argillaceous

towards topEarly

Jurassic

Hutton

Sandstone

Interbedded labile to quartzose sandstone, siltstone

and mudstone and intraformational conglomerate

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Figure 3: Interpretive Geology of the Northern Surat Basin

3 Structure

The Surat Basin has not been subjected to compressional folding and faulting.

The major structural element in the Wandoan coalfields is the north-south trending,

southwardly plunging Mimosa Syncline, the axis of which passes 15km west of Taroom and

22km west of Wandoan (see Figure 2). It formed over an actively subsiding basement trough

(Taroom Trough) which initiated as a result of Permian sediment infill in the depression

formed between the Burunga Fault and the Nebine Ridge to the west. It is a relatively simple

structure with its western and eastern flanks dipping gently SSE and SSW respectively. The

eastern limb of the syncline proper coincides with a line of meridional faulting downthrown

some 70m on the western side. Sediments here exhibit a steeper south-westerly dip. Various

stratigraphic units crop out in a broad arcuate belt around the synclinal axis.

The Burunga Fault is a north-south trending basement thrust passing between Miles and

Taroom and having a displacement of 1000-2000m. It is the most important tectonic structure

within the area.

A complimentary NE-SW trending, SSE plunging anticline, corresponding to the southerly

extension of the Comet Ridge exists, passing midway between the Mimosa Syncline axis and

the town of Injune. This alters the strike pattern of strata in the area.

A small anticline striking ENE-WSW and plunging WSW possibly exists south of the Taroom

airport suggested by the change in strike direction of the Hutton Sandstone and the Walloon

Coal Measures. This may well be due to small structural anomalies in the eastern flank of the

Mimosa Syncline.

Folding, for the most part, is absent with the exception of large drape folding over basement

ridges and large scale synclinal downwarping. Thicker accumulation of sediments on the

downthrown side was controlled by basinal downwarping with compaction and movement

along basement faults. Sedimentation is thickest in the central Mimosa Syncline. To the west

of the Mimosa Syncline is the Arcadia Anticline.

Complex subsurface block faulting south of Giligulgul defines the eastern boundary of the

Taroom Trough.

0 Previous WorkBrigalow Mines Pty Ltd and a number of other companies did a large amount of work in the

Wandoan – Taroom area in the 1970’s and ‘80’s. A comprehensive understanding of the

geology of the area was gained from various studies including photogeological mapping,

resistivity surveys, and numerous boreholes. Large deposits of shallow, thick, high volatile,

sub-bituminous thermal coal were defined. The total resource of these deposits was

determined to be approximately 2,000 million tonnes. The coal was also considered suitable

for liquefaction and gasification due to high hydrogen content.

EPC789 partially or fully covers the following former Authorities:

AP124C (Burton Springs)

AP126C (Durham Downs)

AP139C (Aberdeen)

AP149C (Taroom)

AP174C (Kooringa)

AP194C (Wandoan)

AP265C (Kooringa)

AP345C (Orallo)

AP348C (Hornet Bank)

AP410C (Slatehill)

The progression of previous tenures is shown in Table 3.

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Table 3: Progression of Wandoan Exploration Tenure

Brigalow Mines PL / XCQ

Pre 1985 1985 - 1988 1988 - 1990 1990 -1994 1994 - 1996

AP157C AP157C AP157C EPC157 EPC563

AP431C AP450C EPC450

AP139C

AP149C

AP152C

AP230C

AP229C/267C

AP432C

AP105C/182C

AP138C/231C

AP139C

AP149C

AP433C

Other companies

(no dates specified)

AP124C AP194C AP265C AP345C AP410C

AP126C AP174C

AP241C

AP256C

AP305C AP419C

0 Work in Relinquished AreasEPC789 was granted to MIMC in February 2003 and later transferred to XCQ. Work

undertaken during the first two years to 24th February 2005 has included;

the retrieval of digital borehole data from previous work and extraction of borehole data

from company reports obtained from the Department of Natural Resources and Mines

(DNRM)

a review of the regional geology

a photogeological study

a desktop study of the Native Title status of properties in the area

an interpretation of the regional stratigraphy compiled from available data

a drilling program.

5.1 Data Compilation

Data was compiled from digital files held by MIMC and scanned company reports (six month,

twelve month, or relinquishment reports) obtained from the DNRM.

Abbreviated lithological logs from both chipped and partially cored boreholes were entered

into spreadsheets. In some cases isopach information was used to create incomplete

lithological profiles where logs were missing. Some reports contained illegible information

whilst others were incomplete. Consequently a complete record of all previous drilling cannot

be obtained. Where surveyed coordinates were available these were entered whilst the

remainder were digitised from plans.

All available header and lithological data has now been entered to a Vulcan database. The

location of these boreholes is shown on Figure 4. As the borehole data has not been

identified by its current EPC it is not possible at this time to report the data. Evaluation of this

database has identified the areas where low ratio coal exists. The areas relinquished indicate

high ratios for any coal intersected in boreholes in these areas.

Hard copies of geophysical logs were produced from the scanned reports provided by the

DNRM to provide as complete a data set as possible for ongoing evaluation. These were

utilised for the stratigraphic correlation work described in Section 5.6.

5.2 Native Title Status

Before any field exploration could be undertaken it was necessary to determine the Native

Title status of the properties to be accessed. Under the Native Title Act 1993, for any

property which is Freehold or has a Lands Lease title which grants a previous exclusive

possession prior to 23 December 1996, then Native Title on that property is considered to

have been extinguished. As there are various types of Lands Lease, and they have been

granted at different dates for different properties, it is necessary to examine the actual title for

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each property in this category. The result of this investigation is that all Freehold and Lands

Lease properties covered by the relinquished sub-blocks have had native title extinguished.

5.3 Photogeology

Previous workers in the area undertook photogeological interpretation of the area in order to

define the surface geological stratigraphy and structure and to assist determination of drilling

targets. As the resultant identification of deposits shows some anomalies in their distribution

it was considered worthwhile to verify and re-examine the information available from a new

photogeological study.

It was intended to use photography from the 1960’s as this had provided excellent results in

the Bowen Basin as in many areas it was prior to land clearing. However the thicker

vegetation in the Surat Basin photos tended to mask rather than enhance the interpretable

detail. Consequently 1987/1989 1:80,000 scale black and white, stereoscopic

Commonwealth photography has been used. The new photogeological study was

undertaken in 2003-4.

Preliminary interpretation was very difficult due to the amorphous landform and uniform tone,

shallow dips, and poorly defined bedding traces. The lack of significant variation within the

Jurassic strata has made subdivision of the sequence very difficult. Some assistance was

provided by a field trip which helped define some useful landform – geology relationships,

however the gradational changes make definition of the base of the coal measures very

difficult. This is in contrast to the earlier work which appears to have interpolated these

boundaries from scant evidence.

The boundary between the Springbok Sandstone and the Juandah Coal Measures is

reasonably well defined as is the contact between the Tangalooma Sandstone and the

Taroom Coal Measures. The subdued relief and gradational nature of other stratigraphic

boundaries hindered further subdivision. A major alignment coincident with the Dawson River

was recognised as well as some north-block-down faulting.

A plot of the photogeology for the relinquished sub-blocks is presented in Figure 5 and the

report is included as Appendix A.

5.4 2004 Drilling Program

A drilling program was conducted in the Wandoan project area from July to September 2004.

This was preceded by planning and preparation which included identifying sites, contacting

landholders, and determining access. An evaluation of the potential for disturbance of cultural

heritage was undertaken under duty of care guidelines. As all sites were located on or adjacent

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to existing tracks or in previously disturbed ground (most of the area has been cleared and

ploughed in the past) it was not considered necessary to undertake a cultural heritage survey.

As the EPC is within the Taroom Shire which is in the parthenium buffer zone a management

plan was put in place. This included undertaking a certified washdown on all vehicles used on

the program to reduce the likelihood of transporting parthenium weed seed or other weeds into

the buffer zone. Properties with known infestations were not entered.

At the completion of drilling all sites were rehabilitated. This consisted of:

digging approximately 1.5m around borehole collar

cutting PVC collar off approximately 1.5m from surface with hacksaw

cementing borehole to approx 50m below surface where coal seam at >100m depth

backfilling drilled chips down borehole until approximately 1.6m from surface

plugging cut off section of borehole collar with si foam plug and back filling remaining

cavity

removing all remaining drill material from site by truck.

Fifteen open boreholes were drilled in the relinquished area. All boreholes were

geophysically logged and surveyed. Lithological logs of all boreholes are provided in

Appendix B with stratigraphic columns and geophysical log plots provided in Appendix C,

whilst las files of all geophysical logs are available as Appendix D.

A summary of the total amount of coal intersected in each borehole is also shown in Table 4.

Table 4: 2004 Drilling - Summary

Hole Name

EastingMGA

NorthingMGA

Collarm

Coredm

TDm

Total Coal/m

Date Completed

Geophys

R6089 733225.90 7148839.20 247.83 0.00 102.00 0.20 23/08/2004 YR6091 730796.00 7143264.40 263.79 0.00 102.00 0.41 24/08/2004 YR6093 736056.99 7145905.30 250.21 0.00 102.00 0.00 24/08/2004 YR6095 735370.40 7141911.50 264.52 0.00 102.00 0.10 24/08/2004 YR6097 731124.80 7137875.60 298.73 0.00 102.00 0.20 25/08/2004 YR6099 732384.40 7137679.40 284.88 0.00 102.00 0.82 25/08/2004 YR6100 724489.50 7121576.30 242.94 0.00 60.00 0.00 19/09/2004 YR6101 729082.10 7138884.60 316.37 0.00 102.00 0.00 25/08/2004 YR6102 719527.69 7120840.50 297.80 0.00 66.00 0.00 19/09/2004 YR6105 729205.80 7130090.50 294.00 0.00 42.00 0.00 26/08/2004 YR6106 713029.80 7119109.40 316.01 0.00 72.00 1.94 20/09/2004 YR6107 728877.30 7126215.00 266.42 0.00 72.00 0.00 26/08/2004 YR6108 712527.60 7120750.90 279.06 0.00 66.00 0.00 21/09/2004 YR6110 708657.70 7118961.20 284.75 0.00 36.00 0.00 21/09/2004 YR6111 722370.10 7118951.60 261.67 0.00 72.00 0.50 27/08/2004 YR6113 716658.10 7118894.60 300.54 0.00 90.00 0.27 27/08/2004 Y

Total 15 Holes 0.00 1188.00

5 Review of 2004 Drilling Program

An independent assessment was made by Runge Limited of the data acquired from the 2004

drilling program. This included:

preliminary correlation of coal intersections with existing boreholes in the area

independent correlation where no previous work done

identify high water and high gas flow areas

evaluation of the resource potential of each area

comparison of the coal quality with previous work

The results of this evaluation are reported in Runge Limited, 2005. The correlations determined

in this study have not yet been incorporated into the database and are therefore not shown in

the borehole logs (Appendices B & C).

No significant coal was intersected in the relinquished portions of this EPC. A number of

boreholes in this area had significant water flows due to intersection of the Hutton Sandstone

which is a known aquifer. High water flow (>1000 gallons per hour) and significant gas flows are

reported in Table 5. The coal resource potential for this area is very low

Table 5: 2004 Drilling - Gas/Water Data

Hole Depth Lithology Description

R6091 102.00 SS V.Notch Test 80mm, >2000 gal / hr.

R6095 102.00 SS V.Notch water test @ 102m, 95mm. ( approx 3000 gal/hr )

R6097 102.00 SS V.Notch Test @ 102m, approx 1700 gal / hr. (75mm). Water

sample taken. Nice tasting water.

R6100 60.00 SS Hit flowing water in last meter. Flows at 600/gal/hr. Hole

cemented following day.

R6102 66.00 SS Water, approx 1500gal/hr, stop drilling.

5.6 Stratigraphic Correlation

It has been recognised since the earliest work done in the Surat Basin by Swarbrick (1973) and

Exon (1976, 1980) that there are a number of recognisable sequences within the Walloon Sub

Group. Initial coal exploration in the Wandoan - Taroom area utilised this work in conjunction

with photogeological interpretation and resistivity surveys to locate large, shallow coal deposits

at the top of the Juandah and Taroom Coal Measures. As work progressed on defining these

deposits the relationship between them was ignored and they were considered as independent

isolated deposits.

More recent work in the Surat Basin by seam gas explorers (Scott et al, 2004) has determined

that the sequences (and the coal seams they contain) identified by Swarbrick and Exon can be

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recognised over large distances, and potentially over the whole Basin. These sequences and

their seam groups have been named and are shown in Table 6.

In order to assess the continuity of seam groups in the Wandoan - Taroom area and determine

if any other ‘deposits’ exist a study was undertaken to utilise all data collected to date to

correlate these stratigraphic units. This work has been reported by Mackie (2005) who has

referred to the stratigraphic units as the Surat Basin Seam Groups (SBSG).

Whilst over 4000 boreholes have been drilled in the area they were not all useful for

stratigraphic correlation as they lacked useful geophysical logs or were only shallow (<100m).

Consequently only about 700 boreholes were useful and the photogeology used as a guide.

The result of the study has been the definition of subcrop zones for each of the SBSG which

are shown on Figure 7 for the relinquished sub-blocks. Estimation of thicknesses and coal

content of each unit have also been determined and are shown in Table 7.

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Table 6: Stratigraphy of the Walloon Subgroup (after Scott et al, 2004)

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Table 7: Summary of Variation within SBSG

Unit/Seam Group Thickness Range Coal Content Type Holes

Macalister Upper 2-5m (Average 4m) Coal plies up to 2m usually

0.5-1m thick, <70% total coal

R1745

Macalister Lower 2-10m (Average 7m) Coal plies usually 0.2-1m thick,

<60% total coal

R1745

Wambo 5-20m (Average 10m) Coal plies up to 1m usually

<0.5m thick, <40% total coal

R1763

Iona 2-10m (Average 5m) Minor poorly developed coal

plies <0.2m thick, <20% total

coal

TM007

Argyle 10-25m (Average 15m) Coal plies <1m thick, <50%

total coal

R6058

Tangalooma

Sandstone

30-90m (Average 50m) Rare coal plies, <5% total coal R6068,

R6056

Auburn 5-15m (Average 12m) Minor coal plies <0.5m thick,

<20% total coal

R2513

Bulwer Upper 10-20m (Average 15m) Coal plies <1m thick, <40%

total coal

R2055

Bulwer Lower

Condamine 20-40m (Average 30m) Frequent thin plies <0.2m

thick, <30% total coal

N/A

0 ConclusionsWork undertaken in the last two years has included compilation of old borehole data, a

photogeological study, a study of the regional stratigraphy, and a drilling program. This has

provided a better understanding of the regional geology of the Wandoan -Taroom area. The

relationship between stratigraphy and isolated coal deposits is better understood and areas for

further investigation determined. The 125 sub-blocks relinquished from EPC789 are not

currently considered prospective for mineable coal deposits as they are:

in the Durabilla or Eurombah Formations

in the Tangalooma Sandstone

in barren sections of the Juandah or Taroom Coal Measures

contain seams that are too thin and/or deep (>150m)

in areas with potentially high costs for mining

0 ReferencesEXON, N.F., 1976. Geology of the Surat Basin in Queensland. BMR Bulletin, 166.

EXON, N.F., 1980. The Stratigraphy of the Surat Basin, with special reference to coal deposits. Coal Geology, 1(3).

GREEN, D.R., & CHESTNUTT, K., 2004. EPC789 Juandah West. Twelve Month Progress report for Period ending 24 th February 2004. Confidential unpublished

company report.

JOSE, P., 2005. Wandoan Drilling Program July - October 2004. Environmental Report. Confidential unpublished company report.

JONES, G.D., & PATRICK, R.B., 1981. Stratigraphy and coal exploration geology of the north-eastern Surat Basin. Coal Geology, 1(4).

MACKIE, S., 2005. Evaluation and Interpretation of Stratigraphy in the Wandoan Tenements. Confidential unpublished company report.

RUNGE LIMITED, 2005. Wandoan - Review of the 2004 Drilling Program. Confidential unpublished company report.

SCOTT, S.G., ANDERSON, B., CROSDALE, P., DINGWALL, J., & LEBLANG, G., 2004.

Revised Geology and Coal Seam Gas Characteristics of the Walloon Subgroup – Surat Basin Qld. In: Boult, P.J., Johns, D.R. and Lang, S.C. (Eds), Eastern

Australasian Basins Symposium II, Petroleum Exploration Society of Australia, Special Publication, 345-355.

SNODIN, S., 2004. Photogeological Interpretation of the Wandoan Area, Queensland. Confidential unpublished company report.

SWARBRICK, C.F.J., 1973. Stratigraphy and economic potential of the Injune Creek Group in the Surat Basin. Geological Survey of Queensland Report, 79.

WARD, C.R., HARRINGTON, H.J., MALLETT, C.W. and BEESTON, J.W., 1995. Geology of

Australian Coal Basins. Geological Society of Australia Inc. Coal Geology Group. Special Publication No.1.

Page

(CRACOW

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50km Drill Hole Locations

XSTRATA COAL QUEENSLAND

WANDOAN PROJECT

EPC 789BOREHOLE LOCATIONS

PREVIOUS DRILLINGRelinquished Area 2005

FIGURE 41:250000 : SG55-08 Author : D.G. Scale : 1:250000

1:100000 : 8746 Original Date : Date : 18/4/2005

Region : Figure No : Office: BrisbaneProjection: Longitude / Latitude (GDA

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Page

Jo

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Ts

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JKmk

Jh

INTERPRETED LITHOSTRATIGRAPHY

Orallo Formation; sandstone, siltstone, mudstone

Quaternary Modern drainage alluvium and minor associated colluvium

Upper Jurassic

Gubberamunda Sandstone; sandstone, some conglomerate, siltstone, mudstone

Tertiary/ Quaternary Older sand/gravel deposits

Tertiary

Sandstone, siltstone with duricrust capping. May also include remnant deep weathering profile on older rocks.

Middle to Upper Jurassic Jsw

JtjBasalt, tuff, agglomerate Middle

JurassicJurassic/ Cretaceous

Mooga Sandstone (Cretaceous); sandstone, some siltstone, mudstone. In southeast includes Kumbarilla Beds (M. Jurassic-U. Cretaceous); sandstone, siltstone, mudstone, conglomerate.

Jet

Westbourne Formation; siltstone, mudstone, fine-grained sandstoneSpringbok Sandstone; sandstone, minor siltstone, mudstone and coalJuandah Coal Measures; sandstone, siltstone, mudstone, coalTangalooma Sandstone; clayey sandstone, minor siltstone, mudstone and coalTaroom Coal Measures; sandstone, siltstone, mudstone, coalEurombah Formation; clayey sandstone, some conglomerate, siltstone, mudstone

Lower Jurassic Hutton Sandstone; clayey and quartzose sandstone


WANDOAN PROJECT

EPC 789PHOTO GEOLOGY INTERPRETATION

Relinquished Area 2005

Photo Geology Interpretation by:Stephen Snodin

PhD FGS

Consulting Services in Geological Image Interpretation

36 Custance Street Phone/Fax: 61 (0)2 6286 2957 ABN 86 954 127 880 Farrer Email: [email protected] 2607Australia

April 2004

700000 mE 720000 mE 740000 mE148º55' 149º 149º05' 149º10' 149º15' 149º20' 149º25'

149º30'

Geological contact

Surface traces of bedding

Interpreted dip❖ Sub-horizontal

Very shallow ShallowShallow to moderate

Interpreted fault with sense of movement; box on downthrow side

Other interpreted fault, fracture, lineament

Dashed line= poorly defined

Major lineament over inferred sub-surface structure. Arrow on downwarp side

Fold axis with plunge; anticline, syncline

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Property boundary


WANDOAN PROJECT

EPC 789BOREHOLE LOCATIONS - 2004

Relinquished Area 2005FIGURE 6

1:250000 : SG55-08 Author : D.G. Scale : 1:250000


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Stratigraphic Column

Springbok Sandstone MacalisterWambo

Iona ArgyleTangalooma Sandstone Taroom Coal Measures


WANDOAN PROJECT

EPC 789STRATIGRAPHIC CORRELATION

Relinquished Area 2005FIGURE 7

1:250000 : SG55-08 Author : D.G. Scale : 1:250000


Region : Figure No : Office: Brisbane

Projection: Longitude / Latitude (GDA 94)

Drg No : XCQ168

0 2.5 5 10 km

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Page

Stephen Snodin PhD FGS

PHOTOGEOLOGICAL INTERPRETATION OF THE

WANDOAN AREA, QUEENSLAND FOR

XSTRATA COAL QUEENSLAND PTY LTD May 2004

Consulting Services in Geological Image Interpretation ABN 86 954 127 880

36 Custance Street Phone/Fax: 61 (0) 2 6286 2957Farrer Email: [email protected] 2607Australia

Page

Summary

Photogeological interpretation was carried out over the 6,800 sq km Wandoan area in the Surat Basin. Stereoscopic air-photos at 1:76,000 and 1:82,000 scales were used for interpretation and the results were recompiled to geocoded Landsat imagery at 1:100,000 scale. Two days of field orientation were undertaken during the interpretation phase.

Final products comprise a Photogeological Interpretation Map in MapInfo format plus a colour plot of the map at 1:100,000 scale together with this report.

Seven subdivisions of the Lower Jurassic to Cretaceous sequence were delineated in addition to locally developed Tertiary sediments, very minor volcanics, and two surficial cover units. The Middle to Upper Jurassic Injune Creek Group was difficult to subdivide photogeologically because of the subdued/monotonous relief it displays and the gradational nature of the contained formation contacts. It was however possible to interpret a threefold subdivision of the group defined by two subtly expressed geological boundaries. These comprise the contact between the Taroom Coal Measures and overlying Tangalooma Sandstone and between the Juandah Coal Measures and overlying Springbok Sandstone. Regionally, both describe arcuate traces reflecting the shape of the very gentle Mimosa Syncline. In the southwest a bend in strike occurs around the nose of the Arcadia Anticline developed beyond the project area. In the northern part of the project area the Mimosa Syncline is modified by the 75km long, northeasterly trending Dawson Alignment. This is inferred to follow a possible subsurface structure across which there appears to be sequence downwarping to the southeast.

Most of the known coal deposit/prospect zones in the project lie just beneath or straddle the outcropping Taroom Coal Measures/Tangalooma Sandstone and Juandah Coal Measures/ Springbok Sandstone contacts. Why they straddle the contacts (i.e. extend significantly into the overlying base of cycle sandstone unit) is unclear. It could be that the drilling which defines the coal areas (not sighted in the current work) records a partial sandstone cover.

Local offsets in the pattern of coal deposit/prospect areas appear to be related to the influence of the Dawson Alignment and, in one case, to north-block-down faulting.

A few coal deposits/prospects do not appear to be related to the above outcropping coal measure/ sandstone contacts. One of these appears to be a local coal depocentre in the Tangalooma Sandstone and a second is related to the Juandah Coal Measures/Springbok Sandstone contact but is concealed down-dip from it. In the north, two others occur in the Tangalooma Sandstone outcrop area but form an alignment with others related to the exposed Taroom Coal Measures/ Tangalooma Sandstone contact.

If they are concealed deposits it may indicate some NE- orientated palaeogeographical control which modifies the stratigraphic control on coal formation.

There are significant sectors of the interpreted exposed Taroom Coal Measures/Tangalooma Sandstone and Juandah Coal Measures/Springbok Sandstone contacts along which no coal deposits/prospects are recorded. The sequences just beneath them warrant attention, if they have not already been tested.

Page

CONTENTS

Page

1. INTRODUCTION 1

1.1 Project area 11.2 Objectives 11.3 Project data 11.4 Final products 31.5 Physiography and general geology 3

2. METHODOLOGY 4

3. SUMMARY OF RESULTS 53.1 Lithostratigraphy 53.2 Structure 7

4. CONCLUSIONS 8

REFERENCES 9

Figure 1 Project area and generalised coal 2deposit/prospect areas

Figure 2 Lower Jurassic to Cretaceous 4stratigraphy in the project area

INTRODUCTION

This report summarises the results of a photogeological interpretation of the Wandoan area in the Surat Basin, Queensland. Stereoscopic aerial photography was used for interpretation and the result was recompiled to a geocoded Landsat image base at 1:100,000 scale. Two days of field orientation were also undertaken during the course of the project.

1.1 Project area

The project area is approximately 6,800sq km in size. It lies 370km WNW of Brisbane and includes the townships of Wandoan and Taroom (Figure 1).

1.2 Objectives

Xstrata holds extensive coal exploration permits, applications and mining leases over the area. The objective of the current project was to provide new lithostructural information which, when integrated with other exploration data, will be used to further assess the coal potential in these tenements.

1.3 Project data

Air-photos

These comprised 121 black and white prints with 60% overlap at nominal scales between 1:76,000 and 1:82,000 and flown in 1987 and 1989. They were purchased for the project, but in addition some extra photos from the same series were borrowed from the Geoscience Australia library in order to provide 80% stereo-overlap. This aided interpretation by increasing vertical exaggeration.

Landsat imagery

This formed an accurate base for recompiling the air-photo interpretation to correct for stereoscopic scale variation and distortion. It comprised a 1:100,000 scale colour inkjet plot of geocoded Landsat data with bands 147 in BGR merged with the higher resolution (15m) panchromatic band.

Other data

Geological publications consulted for the work included the 1:250,000 geological maps (TAROOM, ROMA, CHINCHILLA, MUNDUBBERA) and relevant survey bulletins/ reports (Swarbrick, 1973, Exon, 1976). Others related more specifically to the coal potential were Jones and Patrick (1981), Coxhead and Brandt (1981) and Leblang et al., (1981).

Unpublished data supplied by Xstrata comprised the results of a previous photogeological study (Loxton Hunting, 1978) and small-scale in-house maps showing generalised locations of coal deposit/prospect areas.

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These are as follows:

• Final photogeological map in digital GIS (MapInfo) form on CD-ROM.

• A colour plot of the above map at 1:100,000 scale (Wall Map).

• Summary report

• Air-photos and Landsat imagery purchased for the project.

In addition, an interim colour map of the provisional interpretation was emailed to Xstrata in advance of the final digital product.

1.5 Physiography and general geology

Drainage in the area forms part of the Dawson system north and east of the Great Dividing Range. The east to northeast flowing Dawson River itself, with an associated broad belt of alluvial flats, crosses the northern half and tributaries flow northwards and southeast into it.

Relief is generally low with gently undulating topography and weak drainage incision over the extensive zone of soft-weathering Middle to Upper Jurassic sequence of friable sandstones and finer grained sediments. Relief is more pronounced where the Lower Jurassic Hutton Sandstone crops out at the western margin of the project area and, in the southeast, where more resistant Upper Jurassic/Cretaceous sandstone-dominant sequences also occur. In the far north and southeast of the area, remnants of a duricrusted palaeosurface on Tertiary sediments produces prominent scarped mesas and plateaux.

The project area lies in the northeastern part of the Mesozoic Surat Basin where the principal structural element is the meridional Taroom Trough. This partly fault-bounded basement feature formed a narrow depocentre for the (now concealed) Permian Bowen Basin sequence. Compaction subsidence of the latter resulted in a co-axial but broader and shallower depocentre for Lower to Middle Jurassic Surat Basin continental sediments including coal measures. At surface this basin is now expressed as the broad south-plunging Mimosa Syncline defined by very shallow regional dips. After the Middle Jurassic the influence of the Taroom trough on Surat Basin sedimentation declined (Exon, 1976).

Mesozoic sedimentation was essentially cyclic. Each cycle, when fully developed, commenced with coarse sands grading upwards to finer grained sediments and at the top, some coal. It reflects a changing depositional environment from braided and meandering streams to ultimately swamps, lakes and deltas. The cycles developed in the project area are shown in Figure 2.

Cycle Interpreted Units Current Project

CretaceousMooga Sandstone

U. Jurassic

Orallo Formation Gubberamunda Sandstone Westbourne FormationSpringbok Sandstone

M. Jurassic

L. Jurassic

Juandah Coal Measures Tangalooma SandstoneTaroom Coal MeasuresEurombah Formation Hutton Sandstone

Figure 2. Lower Jurassic to Cretaceous stratigraphy in the project area

Page

The Juandah and Taroom Coal Measures are the target formations in the project area and their geology and that of some individual deposits are well described in Jones and Patrick (1981), Leblang et al., (1981) and Coxhead and Brandt (1981). This previous work indicates that major coal seam development occurs in laterally persistent horizons near the tops of the two coal measure sequences. Along these horizons loci of thick seam development are separated by zones where the seams are too thin to be of economic interest. Transition to the latter occurs rapidly by seam splitting and deterioration to carbonaceous mudstones. Generalised known coal deposit/prospect areas derived from small-scale, in- house maps supplied by Xstrata are included in Figure 1.

2. METHODOLOGY

The air-photos were examined under a mirror stereoscope with x3 and x6 magnification, and interpreted detail was annotated on clear overlays to alternate prints. Features annotated include the surface traces of bedding, estimated dips, geological contacts, faults with interpreted sense of movement and other fault/fractures and more subtly expressed lineaments. Several interpretation passes were made to complete the annotation.

The finalised annotation on the overlays was then recompiled to the geocoded 1:100,000- scale Landsat plot using features common to both datasets for control. On completion a coloured paper copy of the compilation was prepared and the result re-examined in overview to identify and insert more regional inferred structural features related to

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basin geometry.

The digital product was prepared from the final compiled sheets by Ausmec Geoscience in Brisbane under a separate purchase order.

Fieldwork involved 2 days of vehicle traversing across the area about midway through the project. The objective was to gain an understanding of the relationships between landforms/geology viewed on the ground and what is expressed on the air-photos. It was especially useful on this project because of the very subtle photoexpression of the geology.

3. SUMMARY OF RESULTS

3.1 Lithostratigraphy

Interpreted litho-units are described below in order of decreasing age.

1) The Lower Jurassic Hutton Sandstone (Jh) has an extensive arcuate outcrop which impinges only locally on the project area itself, intermittently straddling its western and eastern margins. On the air-photos the unit is fairly well expressed as zones of tree-covered moderate relief with a relatively deeply incised dendritic drainage pattern and scarped valley sides. Its upper contact is marked by a change to more subdued relief, rounded discontinuous bedding-related breakaways and extensive clearing of the natural vegetation.

2) The Middle to Upper Jurassic Injune Creek Group (Jet, Jtj, Jsw)

This sequence from the Eurombah Formation to the Westbourne Formation encompasses both coal measure units (Figure 2). Gentle bedding-related breakaways backed by subtly expressed dip slopes do allow formation attitude to be determined in the sequence.However because of the subdued relief, the similar photoexpression of the contained units and the gradational nature of the many of the contacts, the Injune Creek Group is very difficult to subdivide photogeologically. Notwithstanding what is shown in the previous photogeological mapping (Loxton Hunting, 1978), in our view the only contacts which can be delineated with reasonable reliability are the tops of the Taroom and Juandah Coal Measures. They are important because coal formation was favoured just below them (Jones and Patrick, 1981). They are interpretable because there is subtle photogeological contrast between the lower relief of the coal measures and the slightly more elevated topography with bedding-related rounded scarps and breakaways of the overlying Tangalooma and Springbok sandstones. The contacts form the bases of successive cycles (Figure 2) and hence are relatively sharp in contrast to intra-cycle contacts (e.g. the bases of the two coal measure sequences) which appear very gradational and not consistently interpretable.

The interpreted Taroom Coal Measures/Tangalooma Sandstone contact forms an arcuate trace parallelling the project area boundary and reflecting well the geometry of the south- plunging Mimosa Syncline. In more detail the contact is irregular due to weak drainage dissection of the very shallow dipping sequence. This results in spurs and occasional outliers of Tangalooma Sandstone outcrop on interfluves and re-entrants of Taroom Coal Measures in valley sides. In the Scott/Eurombah Creek area the contact has a straight northeasterly strike and may be structurally controlled (3.2, below).

Page

The Juandah Coal Measures/Springbok Sandstone contact extends across the southern half of the project area. It is also broadly arcuate but less so than is the case for the Taroom Coal Measures/Tangalooma Sandstone one. It is also similarly irregular in detail and in places includes clustered outliers of Springbok Sandstone, for example in a zone west of Horse Creek.

3) The Upper Jurassic Gubberamunda Sandstone (Jg) crops out mainly in the southeast and further west it occurs as smaller zones including outliers near and straddling the project area southern margin. The unit forms low hill topography with moderate dissection by fracture controlled drainage. The base of the unit is defined by a rounded patchily pale-toned scarp or more gentle break in slope, and similar geomorphology defines sandstone-related bedding within the unit itself.

4) The Upper Jurassic Orallo Formation (Jo) is present in the southeast, both as a main outcrop near the project area southern margin and as outliers to the north. As currently interpreted it overlies the Gubberamunda Sandstone except in the east (near Juandah Creek) where it appears to overstep the latter and rest directly on the Springbok Sandstone/ Westbourne Formation sequence (Jsw). Its photoexpression is similar to that of the Gubberamunda Sandstone although published mapping shows it to contain an argillaceous component in addition to sandstone. Its basal contact is a well-defined ragged to rounded scarp.

5) The Cretaceous Mooga Sandstone(JKmk) outcrop intermittently straddles the project area southern boundary in the southeast. Its base is well defined by an irregular scarp, and the unit itself exhibits moderate relief with a stepped landform of bedding-related scarps and scarplets. In the extreme southeast corner (south of the Juandah Creek headwaters) the photoexpression is different with slightly elevated undulating landform and no geomorphic evidence for bedding. On the published geological mapping this area is shown as Kumbarilla Beds, a stratigraphically more extensive (Middle Jurassic to Upper Cretaceous) unit within which the Mooga Sandstone occurs (Exon, 1976).

6) Tertiary sandstone/siltstone (Ts) is interpreted to underlie prominent scarped mesas and plateaux in the north and southeast of the project area. The sequence is markedly unconformable on various older units from the Mooga Sandstone to Tangalooma Sandstone/ Juandah Coal Measures unit. On the air-photos bedding is sometimes visible in the scarp faces and the duricrust capping to the unit (1.5, above) is smooth textured and subhorizontal to very gently tilted. It is possible that some areas interpreted as Tertiary sediments are not a separate unit, but are instead duricrust-capped remnant deep weathering profiles of the surrounding older sequence. This is how they are shown on the TAROOM published geological map. CHINCHILLA however shows them as Tertiary sediments.

7) Tertiary volcanics (Tb) in the form of three small outliers are interpreted resting on the Tangalooma Sandstone/Juandah Coal Measure unit in the southeast corner of the project area. Their identification as a volcanics (basalt, tuff, agglomerate) is guided by the published mapping (CHINCHILLA) which shows one of the occurrences. They form slightly elevated relief. One is scarp-bounded and the other two have a dense tree cover.

8) Older sand/gravel deposits (QTa) occur as erosional remnants along the Dawson River and further south around the Gubberamunda Sandstone outcrop area between Horse and Woleebee Creeks. On the air-photos the deposits are

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expressed as slightly elevated relief

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with patchy pale tones and discontinuous marginal breakaways. The Dawson River occurrences are presumably older drainage valley alluvium and those in the south, older outwash deposits eroded from the Gubberamunda Sandstone scarp.

9) Modern drainage alluvium (Qa) occurs as ribbon developments along many of the drainage courses and includes slightly raised terraces in the case of the larger ones. Some slope colluvium is also included in the unit, particularly in the drainage headwaters.

3.2 Structure

1) Interpreted regional sequence dips are subhorizontal to very shallow (< 20) and define the shape of the south-plunging Mimosa Syncline. The eastern limb of this broad structure strikes northwest and is relatively straight. The western limb strike is ENE and bends westwards to an E-W orientation. This gentle strike inflection reflects its position around the nose of the broad Arcadia Anticline to the northwest of the project area (Swarbrick, 1973). The interpreted traces of the basal contacts of the Tangalooma and Springbok Sandstones show that the fold shape of the Mimosa Syncline is more open in the south, indicating decreasing structural influence southwards and up-section of the concealed Taroom Trough.

2) The Dawson Alignment is a 75 km long northeasterly trending lineament over a possible concealed structure. In the northeast it is defined by a straight section of the Dawson River valley. Southwestwards it is defined by an anomalously straight Tangalooma Sandstone basal contact, and beyond this by similarly orientated sectors of the adjacent Eurombah and coincident Slatehill Creeks. Southeasterly dipping sequence strike is generally parallel/sub- parallel to the alignment, and the axial zone of the Mimosa Syncline appears to be offset across it. Inflection of the base of the Tangalooma Sandstone across part of the feature suggests associated gentle downwarping of the sequence to the southeast.

3) A number of faults with an interpreted sense of movement have been delineated. They are up to 10km long and the throw is inferred from significant offset of mapped formation contacts that they intersect. Adjacent to the faults, formation strike sometimes rotates to parallel them and the dips steepen; an example occurs close to the area southern margin along and near Barton Creek. The faults are widely distributed and their strike is variable including northerly, northwesterly and E-W to northeasterly. Between Canal and Horse Creeks a long E-W trending north-block-down fault significantly modifies the outcrop pattern of the Springbok Sandstone/Westbourne Formation unit (Jsw).

Numerous other faults/fractures/lineaments have been interpreted on which no sense of movement could be interpreted. They are defined mostly by anomalously straight drainage and rarely by other subtle linear geomorphic or tonal features. Their length can be up to 15km but is generally less than 5km. Their orientation is variable but commonly it is northeasterly or northwesterly. Many examples in the zone up to about 12km on either side of the Dawson Alignment have a similar northeasterly strike to the latter.

CONCLUSIONS

1) Lithostratigraphic units interpreted include the Lower Jurassic Hutton Sandstone, a threefold subdivision of the Middle to Upper Jurassic Injune Creek Group and the Upper Jurassic/Cretaceous Gubberamunda and Mooga Sandstones and Orallo Formation. A mesa/ plateau-forming unit is interpreted as Tertiary sandstone/siltstone, but in some instances this could also include remnant duricrust-capped deep weathering profiles on older surrounding rocks. Small outliers of Tertiary volcanics were interpreted in the southeast, and mapped surficial cover comprises extensive alluvium along drainage courses and occasional erosional remnants of older drainage valley and outwash deposits.

2) The coal-prospective Injune Creek Group is difficult to subdivide photogeologically because of the subdued landforms and gradational formation contacts. The three-fold subdivision hinged on being able to interpret the subtly expressed contacts between the Taroom and Juandah Coal Measures and their respective capping (base of cycle) sandstones (Tangalooma and Springbok Sandstones respectively). These are important because coal deposits are favoured just below them.

3) The interpreted formation contacts and bedding dip/strike define the very gentle Mimosa Syncline and, in the west, a bend in strike reflects the presence of the Arcadia Anticline beyond the project area. The syncline is modified by the subtly expressed NE-orientated Dawson Alignment across which there appears to be downwarping to the southeast over an inferred subsurface structure, possibly a major fault.

4) Distribution of coal deposits

a) Most of the coal deposit/prospect areas shown in Figure 1 lie just beneath and/or straddling the Taroom Coal Measure/Tangalooma Sandstone and Juandah Coal Measure/Springbok Sandstone contacts. In the many cases where these areas straddle the contacts the reason why they extend significantly into the overlying sandstone unit is unclear. To resolve this would require information about whether the drill data defining the areas records a partial sandstone cover.

b) The current interpretation of the contacts in (a) above explains some apparent anomalies in the pattern of coal areas. For example the apparent offset of Areas 1 and 2 relative to Areas 3 to 10 appears related to the downwarping across the Dawson Alignment. The same could apply to Areas 11 and 12 near Taroom. The northerly position of Areas 26 and 27 relative to others forming the Areas 19 to 31 arcuate pattern appears due to north-block-down faulting of the Juandah Coal Measures/ Springbok Sandstone contact.

c) Some deposit areas do not appear to be related to the contacts in (a) above.

Area 17 lies stratigraphically in the middle of the Tangalooma Sandstone/Juandah Coal Measures unit (Jtj). From its photoexpression the sequence appears here to be sandstone-dominant, suggesting it is Tangalooma Sandstone and there is a local coal depocentre within it.

Areas 6 and 7, form an alignment with others related to the Taroom Coal Measure/ Tangalooma

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Sandstone contact, but themselves lie within the Tangalooma Sandstone

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itself as currently interpreted. To explain this requires firstly information about whether the drilling which defines the two deposit areas recor

ds a sandstone cover .

Area 22 lies well within the interpreted Springbok Sandstone/Westbourne Formation (Jsw) outcrop area. This is a concealed deposit area down-dip from the exposed deposits of Area 21 (David Green, personal communication).

d)The straight NE alignment of Areas 3 to 10 may be significant. In detail it is not wholly related to the more irregular interpreted Taroom Coal Measure/Tangalooma Sandstone contact (c, above). Possibly there is some additional NE-orientated palaeogeographical control which modifies the stratigraphic control on coal formation. It may be significant that the NE orientation is parallel to that of the Dawson Align- ment furthersouth.

e)There are significant sectors along the two contacts in (a) above where no coal deposits/prospects are recorded. They warrant attention if not already explored. They include the Taroom Coal Measures/Tangalooma Sandstone contact between Areas 2 and 3 and southwest from Area 1, and the Juandah/Springbok Sandstone contact between areas 29 and 30.

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Borehole StratigraphicColumn & Geophysical Logs

Date:21-Apr-2005 Project:Drawn By:DA Checked: Approved: DG Drawing No.

R6093

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