RECURRING REVENUE

PRODUCTION

Sustaining the organisation

ORE RETRIEVAL AND PROGRESSIVE REHABILITATION STRATEGY

Transition’s tenements offer a one‐off opportunity to retrieve mineralised waste piles from hundreds of historically disturbed sites across its tenements that were mined in the early 1900s. This is a period when 5% copper was considered low grade and often stockpiled.

These sites are individually too small to offer an economical path to rehabilitation by the private sector, so they remain in an uncontrolled state (some for over 120 years) and continue to contaminate their immediate environments.

Operational modelling indicates that if undertaken concurrently with exploration at each location, mineralised waste piles can be retrieved for sale, and each historical site rehabilitated in concert with the exploration rehabilitation programme.

Costs would be recovered through the mechanical upgrading of the mineralised waste piles at one of Transition’s mining leases to a saleable final end‐product specification.

Buyers have been sourced and, subject to specification, options for the final product include local copper producers (lower‐grade specification); interstate (higher‐grade specification); or oversees parties (highest grade specification).

The end result of this programme would be a win for all stakeholders with the rehabilitation of hundreds of contaminated and dangerous sites that include pits, shafts and mining waste, local jobs and stimulus, excess revenue to Transition and royalties to the State.

METALLURGICAL TEST WORK

Preliminary test-work has been completed on an initial 8 mineralised waste samples (~10kg each) that were obtained from various stockpiles and different rock types, with pleasing results.

The program was designed to measure the suitability of various ores for third-party processing via heap leach and, in so doing, attempt to replicate the grade of each pile. The grade of the 8 samples ranged from 0.40% to 4.38% Cu, with an average grade of 1.97% Cu. High-grade samples were avoided to ensure results of the programme reflected the likely average performance of available material.

The grades correlated very closely to the visual estimate from Transition’s geologists, which was a pleasing confirmation of the estimation process being employed.

Each sample was jaw crushed and riffle split to generate a representative sample of 500g before pulverising with a ring mill. These smaller samples were then assayed by XRF for total copper and underwent a bottle roll test with 200g/L sulfuric acid solution.

Results were favourable, achieving reasonable average copper recovery (75%) with acceptable acid consumption (45.67kg acid/t ore) when considering the average Cu grade of the samples. When converted to acid consumption per kilogram of Cu metal, the result is a pleasing 3.49kg acid/kg Cu.

Whilst preliminary in nature, Transition is very pleased with these results and plans to undertake an expanded programme across many more stockpiles.

OPERATIONS

The Company proposes to reclaim mineralised waste from historical dumps that are located within ML90088 and as sourced from surrounding areas, which would be upgraded into a saleable copper ore end-product for toll treatment or sale to third parties.

Mineralised waste would be upgraded using mechanical methods including a combination of dry crushing and gravity or screen separation, with locally sourced water (including from the existing Chinaman Mine pit) used for dust suppression. Options exist to produce a higher-grade pre-concentrate product with the use of cyclone, inline pressure jigs or similar gravity method. If adopted this may require additional water to be sourced. Options include new bores at or proximal to ML90088 or via diversion of a small fraction of the seasonal river flow from the adjacent Duck Creek into the historical Chinaman Mine pit for temporary storage.

Non-saleable material from the upgrading process would be returned to the waste dumps with environmental improvements including a net reduction in metal content and appropriate dump pile management including surface sculpting and water run-off management.

No chemicals would be used in the ore upgrading process.

ORE RETRIEVAL AND REHABILITATION STRATEGY

Transition is considering a 3-phase production strategy:

Phase 1 – retrieval, sale and progressive rehabilitation:

Retrieval of the high-grade sub-set of the identified historical mineralised waste piles from ML90088 and elsewhere throughout Transition’s tenements, where they would be crushed at ML90088 to produce a medium grade saleable ore material.

Phase 2 – retrieval, upgrade, sale and progressive rehabilitation:

Retrieval of historical mineralised waste piles from ML90088 and elsewhere throughout Transition’s tenements, where they would be crushed and upgraded at ML90088 using cyclones or similar methods, to produce a medium or high-grade saleable ore material.

Phase 3 – small-scale mining, retrieval, sale and progressive rehabilitation:

Retrieval of ore from small-scale mining operations at ML90088 and elsewhere throughout Transition’s tenements, and from historical mineralised waste piles from Transition’s tenements, where they would be crushed and upgraded at ML90088 to produce a medium or high-grade saleable ore material.

ONGOING PRODUCTION

Should the mineralised waste upgrading, and ore-sales operation commence as anticipated, Transition will prioritise the identification of additional ore from existing EPM’s and MLs.

The natural progression from a mineralised waste upgrading and ore-sales operation is to commence small-scale mining operations. In this regard, the identification and assessment of suitable shallow oxide deposits (by drilling if required) would remain an ongoing focus both within ML90088 and throughout Transition’s other tenements.

Small-scale mining would require considerable administrative effort and alignment with various departments and as such its viability would be fully dependent on the scale and nature of possible ore sources. Most orebodies in the Duck Creek region are small scale (though reasonable grades), so the viability of such a venture would be entirely dependent on the amendment of the eligibility criteria of the Small-scale Mining Code, to include the mining of base metals such as copper within the constraints of the code.

A small-scale mining strategy on Transition’s tenements would enjoy many operational and commercial synergies from the prior establishment of a successful mineralised waste upgrading and ore-sales operation, not to mention the benefits of being able to extend the life of an operation that would contribute to;

  • the local community, including through permanent jobs;
  • the State of Queensland through the ongoing payment of royalties;
  • the Kalkadoon People through payment of royalties;
  • Transition’s shareholders through self-funding exploration activities and ongoing dividends; and
  • perhaps most importantly, the environment through the ongoing private funding of progressive rehabilitation activity.

Transition may also look to upgrading third-party ore that would be delivered to ML90088 from surrounding areas. This ore would be predominately, if not entirely, of similar characteristics to ore from the original Chinaman Mine that now dominates the surface profile of ML90088.

It is anticipated the operations at ML90088 (including upgrading of third-party ore), would result in improved environmental amenity and a net reduction of the current area of disturbance at ML90088.