Eloise Project, Queensland

The highly prospective Eloise Project covers a well mineralised
portion of the Eastern Succession of the Mount Isa Inlier, some 70 kilometres southeast of the township of Cloncurry. 

Breakaway's interests at Eloise comprise:

Eloise Exploration Project

Breakaway's Eloise Exploration Project surrounds the Eloise Copper Mine and is regionally located approximately 75 kilometres north-east of the recent major copper and molybdenum discoveries recently announced by Ivanhoe Australia, including Merlin (13Mt @ 0.8% molybdenum and 14g/t rhenium - Identified Mineral Resources announced 21/4/08) and Mt Elliot (475Mt @ 0.5% copper, 0.38g/t gold - Measured, Indicated and Inferred Mineral Resources announced 09/09/08).

Re-commissioning of the Eloise Copper Mine in January 2011 together with a sustained increase in the copper price and robust market outlook provided a strong strategic imperative to ramp up copper exploration at the Eloise Exploration Project.

Following an initial major review of historical data for the Project, a host of bedrock copper targets were identified during early 2011 within a 20km radius of the Eloise Copper Mine. These targets are typically characterised by +1 per cent copper intercepts (up to 4 per cent copper), highly anomalous gold results, limited drilling and excellent extensional potential.

At that time, none of the targets had received meaningful exploration attention over the past 10-15 years, creating a significant opportunity for Breakaway in the current environment.

Drilling commenced at the Eloise Exploration Project in July 2011, initially with 5,000m of Reverse Circulation drilling being undertaken at four priority targets – Surprise Ridge, Roberts Creek, Sandy Creek and Coral Reef, with significant results received from two prospects, Surprise Ridge and Sandy Creek.

At Surprise Ridge, four holes were drilled to test the target with significant intercepts including:

·          1m @ 31.7g/t gold and 7.10g/t silver from 114 metres; and

·          11.0m @ 3.42%zinc, 0.97% lead and 13.90g/t silver from 188 metres, including 2.0m @ 7.40% zinc, 4.04% lead and 57.40g/t silver from 193 metres.

The mineralisation remains open down-dip and along strike to the north, and warrants follow-up drilling.

Of potentially greater importance, drilling at Sandy Creek has identified a significant new copper system which displays strong geological similarities to the nearby Eloise Copper Mine. Drilling on 50 metre – spaced sections has now intersected mineralisation over a strike length of 600 metres to 120 metres vertical with significant intercepts including:

·          10m @ 2.0% copper and 0.47g/t gold from 121 metres including 3m @ 3.0% copper and 0.92g/t gold from 128 metres;

·          3m @ 2.2% copper and 0.47g/t gold from 146 metres;

·          1m @ 6.23% copper and, 0.52g/t gold, from 65 metres; and

·          3m @ 3.68% copper and 0.57g/t gold from 47 metres.

The mineralisation remains open in all directions and given the prospect’s close proximity to the Eloise Copper Mine, we believe that there is excellent potential to quickly generate an economic resource at Sandy Creek.

This will be a strategic focus for the Company in the coming months and in late November 2011, diamond drilling to test the prospect’s depth potential was underway.  

Altia Joint Venture Project (BHP Billiton Minerals Pty Ltd earning 70%)

Breakaway announced on 11 November 2009 that it had entered into a farmin and joint venture with BHP Billiton Minerals Pty Ltd, termed the Altia Joint Venture Project, which covers an area of approximately 8km² within the Eloise Regional Exploration Project and hosts the Altia Silver-Lead-Zinc Deposit, where Breakaway has previously announced a JORC Code compliant Resource of 5.78Mt @ 3.96% Pb, 40.3g/t Ag, and 0.49% Zn (7.5Moz of contained silver and 229Kt of contained lead).

Under the agreement, BHP Billiton can earn a 70% interest in the silver-lead-zinc rights at Altia by completing expenditure of A$10 million over 5 years.  BHP Billiton must spend a minimum of A$1 million within the first year of the Joint Venture.  

BHP Billiton completed an initial deep diamond drilling program during 2010, enabling it to complete its Year 1 minimum expenditure requirement of $1 million. This drilling has established the broader geological setting of the deposit and identified a new zone of zinc mineralisation within the parallel-trending Dingo Trend.

Following a geological and commercial review of the 2010 drilling results, BHP Billiton commenced a 2,000 metre diamond drilling programme in late September 2011 and at the time of writing, was well underway.

Eloise Net Profit Royalty

The Eloise Copper Mine continues to perform strongly following recommencement of mining activities in January 2011 and a successful mill recommisioning in May 2011.

Breakaway holds a 30% Net Profit Interest in the mine (after adjusting for prior year losses) and while the Company doesn’t factor in any royalty receipts going forward, the re-opening of Eloise coupled with strong copper prices and the robust outlook for the copper market reinforces the Company’s decision to focus its future exploration activities at the Eloise Exploration Project.