The Poverty Reef has been extensively explored to a depth of 300m by Central Victorian Gold Mines, Western Mining Corp. (WMC) and Reef Mining N.L. between 1987 and 2000. The high-grade (29 g/t) section of the Nick O' Time Shoot at the southern margin of the Poverty Reef was mined from 1996 - 2000 yielding 53,000 ozs of gold from 57,400 tonnes. Below mRL965, (-250m from surface) drilling results indicated an overall drop in grade.

Oblique view of the Tarnagulla drill program relative to the modelled Poverty Line of Reefs and Bonanza and Nick O' Time reef-margin ore deposits.

A combination of the short strike length (70m - 100m) and consequently relatively low tonnes per vertical metre, increasing costs of decline development at these depths, decrease in gold grade, low rate of production (around 1500t / month which was tailored to the milling capacity), 70km haulage to the old Wattle Gully Mill, combined with a historic low gold price (A$ 450/oz) all meant that the lower part of the Nick O' Time Shoot was uneconomic at the time. The Nick O' Time Shoot is still open below 365m as a high potential exploration target.

Poverty Reef, Tarnagulla; Bonanza Shoot (north) and Nick O' Time Shoot (view towards East)

Extract from VIMP Report 71, Krokowski, Cuffley & Evans, 2001

A conventional (non-geostatistical) estimate for the lower part of the Shoot was performed by mine staff at the end of mining around year 1999 and published within a government technical report of September 2001 (VIMP Report 71). This estimate covers the Nick O' Time shoot for 115m below mRL965, which was the last mined level, to a total depth  from surface of 365m (see figure left). This historical estimate is unclassified and thus not reported in accordance with the JORC Code and not reported here. It is uncertain that following evaluation and/or further exploration the resource will ever be able to be reported in accordance with the JORC Code. This is primarily because the gold mineralisation at Nick O' Time is as many Victorian gold systems very nuggetty in grade distribution which causes high uncertainty.

The estimate is relevant to the exploration at Tarnagulla as this block (2E) of mineralisation was considered uneconomic when the mine was operating with gold prices under US$300 per ounce. The block has a decline access into it (currently flooded) which could be readily re-started under the existing mining lease, and high quality geological and gold grade data exists immediately above the lower block with which to correlate mined grades against drill core grades. Because of the substantial rise of the gold price since then, the lower grade portion of the shoot could be economic.

It is also relevant to note that the upper portion of the Nick O' Time resource was mined without a JORC Code resource estimation having been conducted although estimates were produced during mining for in-house use (mine design, grade control and ore allocation etc.)

The drill holes used in the lower block estimate are of the same quality and era of work as those used in assessing the mineral potential of the upper mined portion, although the data used has not been fully verified by a Competent Person under the JORC Code standards.

Exploration at Tarnagulla intends to explore and assess gold-bearing quartz reefs within reach of the Crystal Hill Decline. The "gap" between the Poverty Reef and the Stoney Reef, to the north of the Crystal Hill Decline will be drilled and also deeper areas under the Nick O' Time Shoot aimed at extending the remaining shoot. 

Consequently, a detailed verification study of existing drilling data below the mined portion, from a vertical depth of 260m to 370m, will be carried out. In addition, results from the proposed deep drilling program from vertical depths of 370m to 470m will be added which if successful will prompt work to prepare a JORC Code standard of resource estimate to replace that performed previously.

If such studies result in a significant JORC compliant resource, the mine will be taken off "care & Maintenance" and the Crystal Hill Decline will be re-opened for mining to resume.

The Poverty line of reefs have high potential to extend to depths greater than 1000m as those at Bendigo, Ballarat and St Arnaud are known to occur. In fact it is postulated by those working in the Tarnagulla goldfield that the Poverty Reef could be just the tip of a gold system more structurally similar to that known at Wattle Gully or Ballarat with large west dipping faults at depths >400m from surface containing gold bearing reefs. Successful exploration using such a geological model could provide a much larger resource potential (deposit size) than currently known for the goldfield.

Further information about the Nick O' Time mining, mineralisation and remnant resource can be found in the following links;

• Krokowski de Vickerod, J., Cuffley, B., Evans, T., 2001. Tarnagulla Goldfield, Central Victoria, 1:10 000 Map Geological Report. Victorian Initiative for Minerals and Petroleum Report 71. Department of Natural Resources and Environment. (can be downloaded for free from the Victorian Dept of Primary Industries, Earth Resources Online Store; http://www.new.dpi.vic.gov.au/earth-resources)
  
• McCarthy, P. and Faulkner, L., 2008. Tarnagulla Gold Mine, in AusIMM Narrow Vein Mining Conference 2008 proceedings. (can be downloaded from the AusIMM Online Store; http://www.ausimm.com.au/publications/epublication.aspx?ID=4330)