Kalman Project

(Molybdenum-rhenium-copper-gold)

See also our 16 May ASX announcement - Syndicated and Cerro in agreement to unlock value and expedite development of Kalman Project with JV restructure.

In May 2011 Syndicated signed a restructured Joint Venture and Farm-in Agreement with Cerro Resources NL (formerly Kings Minerals NL) over the total Kalman project area replacing the existing Pelican Joint Venture at Kalman South (EPM13870). The new agreement provides a mechanism to unlock the value and expedite the development of the Kalman molybdenum-rhenium-copper-gold deposit and surrounding tenement package.

The Kalman project is located around 60 kilometres southeast of of Mount Isa in Northwest Queensland and covers around 700km². The area is located close to existing infrastructure including the Barkly Highway, the Townsville-Mount Isa railway, and a natural gas pipeline to Mount Isa. It comprises 19 Exploration Permits for Minerals (EPMs) including Syndicated's 49% owned EPM13870.

Mineral Resource Estimate

The Kalman polymetallic molybdenum-rhenium-copper-gold deposit is hosted in a steeply dipping shear zone adjacent to the regional-scale Pilgrim Fault. The mineralisation comprises chalcopyrite, molybdenite and pyrite within the altered calc-silicates (sediments) of the Corella Formation now comprised dominantly of alkali feldspar, actinolite and chlorite.

The mineralisation at Kalman has been traced continuously over a strike length of 1,000 kilometres, a depth of 900 metres below surface and consistently averages 80 - 90 metres in width. Copper grades are consistently elevated, although variable, over broad widths and molybdenite-rhenium grades are often highly elevated over lesser widths. A higher grade mineralised core in the centre of the system averages between 10 - 30 metres in width.

The most recent Inferred Mineral Resource estimate for the Kalman deposit was released by Cerro to the ASX on September 10^th, 2008. The total mineral resource estimate as announced was 60.8 million tonnes grading 0.32% Cu, 0.05% Mo, 1.19g/t Re and 0.15g/t Au. A copper domain and an internal molybdenum domain were modeled, with a further breakdown into mineralisation potentially mineable by open pit methods above the -100m RL and mineralisation potentially mineable by underground methods below the -100m RL. The deposit has been drilled on a nominal 100 metre by 100 metre spacing.

Table 4: Kalman Inferred Mineral Resource Estimate within EPM13870 - September 2008

Domain	Cut-off Grade	Tonnes millions	Cu %	Mo %	Re g/t	Au g/t	Tonnes Cu	Tonnes Mo	Ounces Re	Ounces Au
Copper	0.2%Cu	15.3	0.35	0.002	-	0.15	53,600	400	-	76,100
Molybdenum	0.02%Mo	17.5	0.22	0.11	2.88	0.11	38,700	18,400	1,623,700	61,400
Open Pit		32.9	0.28	0.06	1.54	0.13	92,300	18,800	1,623,700	137,500
Copper	0.5%Cu	2.4	0.66	0.004	-	0.38	16,100	100	-	29,300
Molybdenum	0.05%Mo	1.3	0.29	0.12	2.15	0.14	3,900	1,500	93,300	6,200
Underground		3.8	0.53	0.04	0.77	0.29	20,000	1,600	93,300	35,500
Total		36.7	0.31	0.06	1.46	0.15	112,400	20,400	1,717,000	173,000

The molybdenum domain which averages 0.11% Mo is considered as one of the higher grade molybdenum deposits with the added advantages of credits of copper, gold and rhenium.

Of particular note are the significant copper, gold, molybdenum and rhenium values intercepted by K106 and daughter holes K106A, K106B and K106C, some of the last holes drilled at the southern end of the deposit.This zone of high copper-gold values over significant widths is open down-plunge to the south and it is considered that it may represent the commencement of a copper-rich portion of the Kalman mineralised zone.

Results include:

Selected significant drilling results from K106, K106A, K106B and K106C

Hole number	Intercept
K106A	242m @ 1.28% Cu, 0,48g/t Au and 0.06% MoS2 from 535m
including	7.65m @ 23.4% Cu, 0.51g/t Au and 20g/t Ag from 581.65m
including	54m @ 1.09% Cu, 0.69g/t Au, 0.24% MoS2 and 4.5g/t Re from 666m
including	4m @ 2.27% Cu, 0.56g/t Au, 0.83% MoS2 and 22.3g/t Re
including	55m @ 1.12% Cu, 1.29g/t Au from 720m
K106	185m @ 0.23% Cu, 0.04g/t Au, 0.01% MoS2 from 497m
including	11m @ 1.1% Cu, 0.10g/t Au from 520m
Including	7m @ 1.34% Cu, 0.19g/t Au from 554m
K106B	213m @ 0.16% Cu, 0.13g/t Au, 0.03% MoS2 from 527m
including	19m @ 0.52% Cu, 0.24g/t Au from 612m
including	13m @ 0.51% Cu, 1.50g/t Au, 0.43% MoS2 and 7.9g/t Re from 631m
K106C	293m @ 0.47% Cu, 0.12g/t Au, 0.01% MoS2 from 543m
including	48m @ 2.24% Cu, 0.56g/t Au, 0.03% MoS2 from 698m
and	5m @ 0.72% Cu, 0.39g/t Au, 0.23% MoS2 and 7.4g/t Re from 707m
and	27m @ 3.56% Cu, 0.89g/t Au from 710m

Metallurgy

Cerro announced results of preliminary metallurgical testwork carried out on the Kalman ore in late October 2008. Excellent recoveries of all valuable metals were achieved in the preliminary flotation test work on samples from the two mineralised domains (copper rich and molybdenum rich) in the deposit.

The flotation response and copper and gold recoveries from the copper zone material indicate favourable and conventional process conditions for this material. Copper and gold recoveries to rougher concentrate were 95% and 82% respectively.

The flotation of the molybdenum zone material also produced excellent recovery of the molybdenum and included rhenium into a low mass concentrate. The recoveries of copper and gold were also high. Recoveries of molybdenum, copper and gold to rougher concentrate were 88%, 95% and 78% respectively. Rhenium is contained within the lattice of molybdenite and is recovered during roasting of the molybdenum concentrate. Rhenium shows a strong positive correlation with the molybdenum grades.

Further testing has been carried out to investigate cleaning of the rougher concentrate at various regrind size distributions and to establish communition characteristics of the material.

Quantitative mineralogical analysis on six samples indicated that the most common copper species was chalcopyrite (>90%) with chalcocite and bornite present in trace amounts. The only molybdenum bearing mineral was molybdenite.