What the Brokers Say
WHAT THE BROKERS SAY: Interesting news and views from across the Resource Analyst universe.
Sirius Resources NL (ASX: SIR)
Exploration Appeal on Multiple Fronts
Sirius Resources NL, while continuing with its Nova-Bollinger development studies, is looking to replicate its exploration success with the discovery of more base and precious metal mines.
The company continues to report significant exploration results from the Fraser Range JV project (SIR 70 per cent), and from the Polar Bear gold project (SIR 100 per cent), south of Kalgoorlie.
Fraser Range – New nickel-copper mineralisation outside the Eye
Recently completed drilling at Fraser Range has identified a new intrusive complex approx. 3km to the west of Nova, with nickel and copper mineralisation intersected in Nova-style host rocks.
This new prospect (Western Trend) forms one of three new targets outside the Eye Intrusion (but within the mining lease application) which could provide the next discovery.
The intersection of nickel and copper mineralisation to the west of Nova is the first time nickel and copper mineralisation has been found outside the ‘Eye’ intrusive structure.
The ‘Western Trend’ was originally outlined by elevated nickel and copper bedrock geochemistry with the first diamond hole (436) into this feature intersecting shallow nickel-copper sulphides.
Follow-up exploration including DHEM and more detailed bedrock drilling is underway with the next diamond hole to be drilled.
In addition to the Western Trend, Sirius has another two near-Nova targets outside the Eye.
All three of these targets are planned to be drill-tested in the coming months.
Polar Bear – New gold bearing palaeochannel and ridge
At Polar Bear, three new supergene gold anomalies have been confirmed over the Lake Cowan salt lake.
Recently completed geochemical drilling at the Nanook prospect has returned some of the highest grade gold intercepts yet with 13m at 23.9g/t gold from 44m (incl. 4m at 74.7g/t gold) reported from quartz gravels within a palaeochannel.
Just to the west of this channel, drilling has also defined a buried ridge which contains quartz-veined altered bedrock, which could potentially be the primary source of the gold.
Further drilling is planned, with another five gold targets to test.
We have a nominal value for Polar Bear of approx. $20 million, included within our exploration value; this will be revisited as results come to hand.
Exploration remains a key value driver
We currently assign an exploration value of approx. $100 million in our Sirius NAV which we see as conservative given the proven prospectivity of the Fraser Range ground and potential now being demonstrated at Polar Bear.
A recently completed equity raise, positions Sirius in a very strong cash position (around $110 million) to accelerate exploration and/or fund some project development costs.
The cash could also be used as a component to partly fund the Nova-Bollinger project acquisition (should JV partner Creasy be a seller).
Sirius already has a proven track record of exploration success and with further encouragement in 100 per cent-owned ground increases the likelihood that more scrip could potentially be used when negotiating the purchase of the remaining 30 per cent project interest.
White Rock Minerals Limited (ASX: WRM)
Key Points
– 100 per cent owned tenements over the prospective Mount Carrington area in northern New South Wales;
– Current JORC compliant resources of 23.5 million ounces of silver and 338,000 ounces of gold;
– Excellent exploration potential for additional gold and silver resources within a large alteration system;
– Additional untested porphyry copper potential;
– Exploration model invokes a volcanic caldera model – worldwide these host major precious and base metal mineralisation; and
– Ongoing drilling encountering broad intervals of shallow gold and silver mineralisation.
White Rock Minerals is a northern New South Wales precious and base-metals emerging developer/producer, with 100 per cent ownership of the highly prospective Mt Carrington area.
The tenements cover the Permian Drake Volcanics, including the interpreted Drake Volcanic Caldera, a 20km diameter feature that hosts the majority of the mineralisation and contains appreciable alteration.
White Rock Minerals continues to intersect precious metal mineralisation in drilling at the Mt Carrington Project in northern NSW.
The company has already established a resource base of 700,000 ounce (at 1.4g/t gold equivalent) and the strategy is to increase this through further exploration on a large number of targets within the volcanic complex.
In parallel the current resources are proposed to be developed, with an operation helping fund further exploration.
To date most drilling has been relatively shallow and there is good potential for additional discoveries at depth.
The mineralisation intersected to date is largely low-sulphidation epithermal gold and silver; our view is that there is significant potential to expand this, as well as for the discovery of porphyry copper mineralisation deeper in the system.
The copper potential is reinforced by the presence of a number of zones of supergene copper enrichment – very little work has been done to identify the primary source.
We believe that White Rock represents excellent value as a junior explorer. It has solid cash backing, highly prospective tenements that could be one drill hole away from a ‘company making’ discovery and a high quality team with a track record of discovery.
Disclaimer: The above is intended as a guide only. The Roadhouse accepts no responsibility for investments made from this advice, successful or otherwise.