What the Analysts Say
WHAT THE ANALYSTS SAY: Interesting news and views from across the Resource Analyst universe.
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Company: Orion Gold NL (ASX: ORN)
Orion Gold NL (ASX:ORN) has significant land packages at the Connors Arc project, located northwest of Rockhampton, Queensland and lying between the active mining operations of Cracow (+2Moz produced) and the relatively newly-developed Mt Carlton mine, and in the Albany Fraser Belt in Western Australia.
Significant Exploration Progress at Connors Arc Au-Ag Epithermal Project
All three lines of a high resolution IP/resistivity survey conducted at the Aurora Flats project detected significant resistivity and chargeability anomalies.
Anomalies are located either immediately below mapped vertical/steep dipping epithermal veins or down-dip from mapped/sampled quartz veining.
The chargeability anomalies appear to reach their strongest expression below depths of 200-300m below surface.
A maiden drilling program at Aurora Flats located multiple epithermal veins and stockwork zones; both below veins mapped at surface and also veins without surface expressions.
The vein textures and geochemical signatures of these veins are important indicators for precious metal-rich intermediate sulphidation epithermal deposits.
One of the ten holes drilled at Aurora Flats intersected a 20m wide highly altered zone with strong epithermal veining, vein breccia and quartz stockworks approximately 200m below surface.
This zone returned an intersection of 9 metres at 0.45 grams per tonne gold and 27.7g/t silver, with peak values of 1.92g/t gold and 91.5g/t silver over 1m.
Additional porphyry-style mineralisation potential
Drilling at Veinglorious, the second prospect at Connors Arc, not only detected similar epithermal veining and alteration as Aurora Flats, but two of the deeper holes intersected wide zones of pervasive hematite alteration in the volcanic host rocks.
This indicates the potential for a porphyry intrusive body close to Veinglorious and adds another dimension to the prospectivity of the project.
Importantly, strong, zoned alteration of surrounding country rock has been encountered in drilling at both Aurora Flats and Veinglorious – the prophylitic, pyrite rich alteration and haematitic alteration are alteration styles typically associated with epithermal porphyries.
Orion’s exploration team, with the assistance of external consultants, is currently analysing available data to establish a model on which to base future exploration.
Steady Progress at the Fraser Range Ni-Cu-PGE + Gold Project
Systematic exploration work continues at the Pennor prospect and surrounds, following up mafic/ultramafic intrusions identified by earlier first-pass shallow drilling.
The high powered moving loop ground EM survey conducted in late 2014 detected several bedrock conductors.
These are being followed up by a fixed loop ground EM survey to confirm and refine channel anomalies.
It must be stressed the area currently being explored represents only a very small part of the 5,000 square kilometre tenement area which is not only prospective for Ni-Cu-PGEs but also for gold.
Still Early Days – Exploration Risk
The company is still at the early exploration stage and therefore faces the same risks as all exploration companies, namely a potential lack of economic grade intersections and difficulties in raising sufficient funding to continue with meaningful exploration programs.
Partly mitigating these risks are the experience of the directors, and the significant acreage and prospectivity in two separate projects, providing both can be managed simultaneously, which appears to be the case.
Company: Manas Resources Limited (ASX: MSR)
Manas Resources is an ASX-listed gold development and exploration company with assets in the Kyrgyz Republic, Central Asia.
The company is currently focused on advancing its wholly-owned Shambesai gold project, in the southwest of the country, towards production.
Shambesai is a Carlin-style, near-surface and highly oxidised gold deposit with JORC-compliant Measured, Indicated and Inferred Resources of 697,000 ounces of gold and Reserves of 279,000 ounces of gold.
In May 2013, Manas completed a BFS for the Shambesai project, which outlined a low-cost, high-margin open pit operation with a NPV of US$105.4 million and an IRR of 67 per cent over a 4.5 year LoM.
Recently, Manas has updated the BFS to account for changes to the production schedule, LoM operating costs, LoM capital costs, revenue tax rate, and has assumed a US$1,300 per ounce price to better reflect the current market.
As a result, the Shambesai gold mine now has an estimated post-tax NPV of US$103 million and IRR of 106 per cent and will process approx. 2.35 million tonnes of ore at an average grade of 3.7g/t gold to recover approx. 241,000 ounces of gold over a 4.5 year LoM.
This is based on treating all oxide and high-grade sulphide Reserves within the designed open pit via a vat and heap leaching route, with an overall recovery rate of 85.9 per cent.
Average production will be approx. 55,000 ounces of gold per year with estimated LoM C3 cash costs of US$720 per ounce.
CAPEX to initial gold pour is forecast at US$40.7 million with payback over approx. 10 months.
Manas has achieved a number of key development milestones. These include the award of a Land Permit in September 2013, the issue of a Government decree in December 2013 for project development, approval of the Kyrgyz OVOS in May 2014, and the approval of the SPZ in September 2014.
In addition, the company recently completed a non-renounceable rights issue comprising approx. 73.61 million ordinary shares for gross proceeds of approx. $1.1 million.
Manas is now working to obtain final site design approval and the infrastructure permits required to begin construction.
It is understood that financing discussions are ongoing, with the company also evaluating opportunities for an outright sale of the Shambesai project.
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