PINANG-PINANG PROJECT:  Gold-copper

LOCATION

The Pinang-Pinang Project is located in the Aceh province and is easily accessible, 20 kilometres south-southeast of the town of Tapaktuan and five kilometres inland from the Indian Ocean.

GEOLOGY

The license geology forms part of a late Jurassic to early Cretaceous age andesite-volcanic dominated island arc. Mid to late Tertiary island arc-related magmatism led to the emplacement of diorite and granodiorite intrusives along the belt, which host the ore mineralisation.

PROJECT BACKGROUND

Siliceous stockwork and alteration

The project was explored by CRA Limited and Meekatharra Minerals /Teck Exploration Limited in the 1990s with excellent trench results. The financial crisis in Asia combined with the low gold price in the late 1990s meant the project was left without further exploration. Previous work identified:  broad intervals of breccia, stockwork quartz vein-hosted and disseminated gold-copper mineralisation in largely intrusive host-rocks, intrusive-hosted gold-copper mineralisation spatially and temporally-related to secondary magnetite alteration which often associates with a magnetite and gold-rich porphyry systems at depth.

EXPLORATION BY PROSPERITY

Prosperity started field work on the Pinang–Pinang project in April 2009 completing a ground magnetic survey and soil sampling over a two by two kilometre grid, complemented by mapping work over an extended area. The original target area containing the historic trenches is called the Pala Prospect and the mapping work discovered a new prospect eight hundred metres to the northwest called Nilam.

Ground magnetic crew at Pinang-Pinang

Auger soils sampling at Pinang-Pinang

The geochemical soil survey has defined a ‘bulls-eye’ of coincident gold, copper and molybdenum in soil anomaly with coincident magnetic high over 350 metres x 150 metres at the main Pala Prospect with a second body of mineralisation recently delineated from soil sampling and mapping occurring between some 300 to 900 metres to the north to north-northwest at the Nilam Prospect. The anomaly remains open off the north western edge of the soil grid within a well-defined structural corridor.

Soil sampling at Pala has defined a + 1g/t gold soil anomaly with gold values up to 10.1g/t gold.  A broader gold anomaly (>100 ppb gold) surrounds the +1g/t soils values and closely mimics the areas of anomalous copper and molybdenum. The Pala anomaly is contained within and/or largely restricted to intrusive andesitic porphyry and microdiorite host-rocks proximal to (or between) the replacement silica-magnetite-sulphide bodies.

Soil sampling and mapping at the Nilam prospect has reported soil values up to 5.18g/t gold. This anomaly also has strong coincident copper and molybdenum anomalism.
 
Prosperity is continuing its work on this exciting project with trench and channel sampling including the re-opening and extension of the historic trenches, digging new trenches, channel sampling and additional soil sampling over a larger grid area of the 2,000 hectare exploitation KP.

PINANG-PINANG AGREEMENT

Prosperity reached agreement to secure the Pinang-Pinang Project from PT Multi Mineral Utama (“PT MMU”), an Indonesian company in April 2009.

Prosperity, through its 90% owned Indonesian subsidiary, PT Prospindo, has signed a formal Joint Venture Agreement with PT MMU. This agreement allows for the subscription for 80% of the shares in PT MMU by the Joint Venture holding company created under the October 2008 Cooperation Agreement with PT Dana Mitra Utama (“PT Dana”).

The Joint Venture holding company will earn an 80% shareholding interest in PT MMU through total exploration expenditure of US$1,250,000. Upon delineation of a JORC Code compliant resource, the Joint Venture holding company will have the option to pay PT MMU a further US$1,250,000 in cash and US$250,000 in Prosperity shares (based on the closing price at 31 March 2010) to acquire the top thirty metres of the oxide material. All material below thirty metres and from surface outside the initial target area will be owned by the Joint Venture holding company.

The Joint Venture holding company has been established in Indonesia as a 10% : 90% venture between PT Dana and PT Prospindo with PT Dana having the option to buy back to 40% at the scoping study stage, or alternatively buy back to 20% at the completion of a feasibility study. PT Dana will be required to contribute pro rata to expenditure should it elect to buy back at either stage.

PINANG-PINANG ANNOUNCEMENTS