St George off to flying start at Mt Alexander
THE INSIDE STORY: St George Mining (ASX: SGQ) has taken the name of a famous Christian saint – one usually pictured as an armoured knight slaying a mythical dragon from the saddle of his trusty steed. By Stephen Bell
After a flying start at an exciting exploration program, St George seems to be living up to its gallant identity by hunting down a hidden nickel-copper deposit south-west of the Agnew-Wiluna belt in outback Western Australia.
One of WA’s most heavily-backed junior nickel explorers courtesy of its high-grade Mt Alexander prospect, St George has just begun lancing the beast with an 11-hole diamond drilling program and has already scored some very promising hits.
The successful beginning reinforces the quality of Mt Alexander, a former BHP Billiton prospect that St George acquired 75 per cent of in late January.
The project’s rich potential has helped fuel a doubling of the company’s share price since the deal was finalised, in a tough market for juniors.
Investors also like the pedigree of St George’s management, led by executive chairman John Prineas and executive director Tim Hronsky, alongside a strong technical team led by two prominent ex-BHP geologists: exploration manager Matthew McCarthy and consultant Dr Jon Hronksy, a globally-recognised nickel expert.
The team has worked out a solid, methodical work program to test the best electromagnetic conductor targets at Mt Alexander – a proven high-grade nickel and copper discovery by BHP in 2008 at the Cathedrals prospect.
“Nickel is generally not flavour of the month, but we have high-quality assets that are attracting attention, particularly because we have high-grade nickel values of five per cent to eight per cent and copper of three per cent,” Prineas told The Resources Roadhouse.
The other critical feature of Mt Alexander is the shallow depth of the targets, making for inexpensive drilling and the potential for cheap open cut mining methods down the track.
“All the mineral occurrences that we’re seeing are from 30 metres below surface down to about 100 metres – open pittable for mining and very different to the underground mines that you often see with nickel,” Prineas said.
“We don’t have to drill 500 metre-deep diamond holes, or dig declines to mine the stuff.”
But the proof is always in the assays – in the case of St George the 1,425m drilling campaign at Mt Alexander that began in mid-March.
The program is testing eleven EM conductors at the Cathedrals and Stricklands prospects that coincide with magnetic anomalies for massive nickel‐copper sulphide mineralisation.
It has got off to a strong start – the dragon is not tamed yet but the knight in shining armour is closing in.
Nine days after the commencement of drilling, St George reported high-grade intervals of nickel-copper sulphide mineralisation in two of the EM targets at Cathedrals, with massive nickel-copper sulphides discovered 30m below surface.
Drill-hole MAD15 intersected approximately 9m of sulphide mineralisation from 22.4m to 31.34m, including 2.17m of heavy disseminated and stringer sulphides and 1.17m of massive nickel-copper sulphides.
Based on analysis of the drill core at 10 centimetre-spaced readings using a portable X-ray fluorescence (XRF) device, the nickel values in the massive sulphide interval ranged from 6.7 per cent nickel to 10.9 per cent nickel for an average 8.9 per cent nickel.
Copper values ranged from 1.24 per cent to 5.85 per cent for an average of 3.2 per cent over the interval.
MAD16, meanwhile, intersected 9.5m of sulphide mineralisation from 51.7m to 61.25m, including 2.25m of moderate-heavy disseminated and blebby (bubbly-textured) sulphides with multiple massive sulphide stringers from 59m.
The stringer and blebby sulphides have nickel and copper values up to 10 to 15 per cent nickel and 10 to 15 per cent copper based on the XRF analysis.
Portable XRF analysis is able to detect base metals, like nickel and copper, and is regarded as a reliable tool for estimating metal grades in massive sulphides.
St George cautioned that the XRF values are indicative only and need to be confirmed by laboratory assays, due out in a couple of weeks.
Nevertheless, Prineas was excited about the early progress and the outlook for more positive hits over the next month or so.
“With multiple EM conductors still to drill, the potential for more discoveries is high,” he said.
“We are completing a hole roughly every three days so hopefully we’ll have some more news very soon.
“There are still seven holes to go so there is quite a bit of news-flow left in this program.
“And, depending on results of the assays and computer modelling, the drilling may turn into an ‘ongoing’ exercise.
“We need to finish the current range of targets and process the results.
“If one of them deserves an immediate continuation of drilling, we’ll do that, otherwise we’ll pause and design another drill program to test further conductors that we are identifying.”
At present the focus is Cathedrals where a rig is drilling a separate, much deeper, EM conductor target at 160m.
“If this one hits the goods it will prove another sort of mineralised zone in the area,” Prineas said.
After the current hole, St George plans to move to the Stricklands prospect, about 600m west of Cathedrals, where the company will target six untested conductors in a virgin area.
“It will be the first ever drilling so we have a good chance to make a new discovery at Stricklands,” Prineas said.
The company is also excited by several new EM targets identified at the Investigators area, to the west of Stricklands, especially Anomaly 2 – regarded as a standout target for massive nickel-copper sulphides.
“Anomaly 2 is three-times stronger than anything else found out there, so it is extremely interesting and could represent a higher-grade and/or larger mineral body,” Prineas said.
Drilling of the target may begin in June.
St George’s 25 per cent Joint Venture partner at Mt Alexander is major WA nickel producer Western Areas, which is currently looking for new production sources outside its core Forrestania operations.
As yet Western Areas has made no public statements about the Mt Alexander, drilling, but there is little doubt that Western Australia’s biggest locally owned nickel producer is keeping a close eye on proceedings.
Notably, the company included St George’s latest update on its ASX news feed to keep shareholders in the picture.
Western Areas is also a shareholder in St George, as a result of it being granted 3.5 million shares in January for agreeing to not exercise its right of pre‐emption over BHP’s interest in Mt Alexander.
Moreover, Terry Streeter – former chairman of Western Areas and regarded as an astute nickel investor – also owns shares in St George.
But it is not only nickel and copper that are attracting some heavyweight investors to the company.
Drilling is due to start at St George’s East Laverton gold project in either late May or early June.
“It is a good target in the right neck of the woods,” Prineas said, referring to the project’s location in a broader region boasting two recent world-class discoveries: Tropicana (at 8 million ounces-plus gold) and Gruyere (5 million ounces-plus).
“Our ground is under-explored and with some structures that are very favourable for gold mineralisation,” Prineas declared.
“So anything is possible there.”
St George Mining Ltd. (ASX: SGQ)
… The Short Story
HEAD OFFICE
Level 1
115 Cambridge Street
West Leederville WA 6901
Ph: + 61 8 9322 6600
Fax: + 61 8 9322 6610
Email: info@stgm.com.au
Web: www.stgm.com.au
DIRECTORS
John Prineas, Tim Hronsky, Sarah Shipway
MAJOR SHAREHOLDERS
Impulzive Pty Ltd: 7.03%
John Prineas: 6.38%
Oceanic Capital: 4.73%