S2 Resources achieving early exploration success

The Mineral Resource at Baloo came in at 2,170,000 tonnes at 1.8 grams per tonne gold for 123,000 ounces of contained gold at a lower cut-off grade of 0.8g/t gold.

“Being able to define a Resource so early at Baloo is an important part of our strategy for the Polar Bear project,” S2 Resources managing director Mark Bennett told The Resources Roadhouse.

“It’s not a massive deposit, it’s modest at 120,000 ounces, but it does remain open down dip and down plunge.

“The important thing about Baloo is that it starts just two metres below surface and it has a high ounce-per-vertical-metre metric of between 1000 to 1500 ounces per-vertical-metre from two metres down.

“So it is all about quality not quantity in this scenario with two gram dirt being very valuable.”

S2 envisage early monetisation of the Baloo deposit in some shape or form, with possible developments involving toll treatment, a heap leach operation or possibly even the sale of the currently defined part of the deposit.

“The reason for monetising Baloo would be to make it a source of revenue for the company, rather than a cost, with the intention for cash generated to top up our current bank balance of $18 million to fully-fund exploration in our search for bigger things,” Bennett explained.

When announcing the Baloo Resource, S2 indicated it would be carrying out exploration drilling at the two other main Polar Bear targets of Monsoon, four kilometres away, and Nanook, a further six kilometres south, which also yielded early success.

Following up an earlier intersection at Monsoon of 32m at 2.5 grams per tonne gold, S2 intersected 12m at 26g/t gold.

Subsequent drilling at the Nanook deposit encountered:

SPBA3817
16m at 51.3g/t gold from 44m to end of hole (EOH), including 4m at 203 g/t gold from 48m and 1m at 1.56 g/t gold from 59m to EOH; and

SPBA3810
16m at 1.63g/t gold from 40m, including 4m at 4.69g/t gold from 44m.

These results were quickly followed by the announcement of a Mineral Resource estimate for in the Nanook channel (excluding any bedrock potential) of 2.2 million tonnes at 1.2g/t gold for 84,000 ounces of gold.

“The Nanook deposit appears to be an accumulation of alluvial gold in a paleo channel,” Bennett said.
 
“We have quantified that and emerged with a Resource of 84,000 ounces of gold, but more important now is to answer the question where is it coming from?
 
“One important result from the recent drilling came from outside the paleo channel, in the bedrock, where we encountered four metres at 50 grams per tonne gold.

“So we certainly have a high-grade source of gold and again we have the grade – now it is just a question of whether the dots connect and we have substantial tonnage.

“The next step is to find the source of this gold and if so, determine how much of it remains intact.

“In this sense the paleo channel resource represents a very big geochemical anomaly.”

S2 believes it has now defined three gold hotspots over a 10 kilometre distance on a single trend at Polar Bear.
 
The company is set to commence a RC drill program to search for the source of this gold, which will be co-funded by the Government of Western Australia as part of its Exploration Incentive Scheme (EIS).

As encouraging as the results from Polar Bear are, Bennett described it – in culinary terms – as the ‘entrée’ to what S2 considers to be its main course – the Swedish casserole if you will – the company’s 100 per cent-owned Skellefte project in Sweden.

The project sits in the middle of a 100 year old mining district peppered with mining infrastructure and culture in the district where Swedish mining giant Boliden made its start.

This area contains a number of substantial copper-zinc-silver-gold sulphide deposits, including the Boliden mine, the Kristineberg mine, and the Storliden mine, and also contains the Bjorkdal gold deposit.

“When we arrived here the ground surrounding all of Boliden’s operating mines was available, unlike what you would typically find in Australia,” Bennett explained.

“We basically blanket-pegged the ground and we now own more ground in Boliden’s home territory than they do, immediately along strike from some of their mines.”

To announce its arrival S2 flew a VTEM geophysical survey, which turned out to be the first such survey carried out over this historic mining region.

The survey identified 67 EM conductors many along strike from the operating mines lying under around five metres of cover and, until now, apparently unexplored.

“It all looked too good to be true, so when we were able to access a drill rig we thought we should check one of these EM anomalies out to make sure they are real,” Bennett said.

Reality set in fairly rapidly with the first two of three diamond-core holes drilled on a single section to test one of the EM anomalies confirming the presence of zinc mineralisation at the Svan Vit prospect.

The first hole (SSVA160001) clipped the top of the ground EM conductor model and intersected a narrow zone of mixed sulphide mineralisation, returning:

0.55m at 1.49 g/t gold, 45g/t silver from 25.3m; and
1.05m at 2.87 per cent zinc, 5g/t silver from 88.7m.

The second hole (SSVA160002) was drilled 90m down dip of the first through several zones of mixed sulphide mineralisation and intersected:

0.55m at 2.23 per cent zinc from 164m;
3.7m at 1.75 per cent zinc, 5.3g/t silver from 170.2m; and
5.05m at 3.15 per cent zinc, 6g/t silver, 0.2 per cent copper from 184.6m.

A follow-up downhole EM survey suggests the three holes S2 has drilled to date have only tested the margins of a potentially much more extensive zone.

Further drilling has been scheduled to adequately test the Svan Vit prospect on the back of the two holes intersecting low grade zinc and silver bearing VMS-style mineralisation on the margin of an upper conductor.

 “We are trying to maintain a cool approach, but the Svan Vit deposit has got us reasonably excited, Bennett said.

“We have hit VMS mineralisation with the first two drill holes into the first of the 67 EM anomalies we have identified to date, but from what we have seen in the results we have so far, it looks like we’re on the edge of something bigger.

“The tantalising thing about these results and this project is that the snow has melted so we now have to wait until October before we can start drilling again.

“I think it could be well worth the wait.”

S2 Resources LTD (ASX: S2R)
…The Short Story

HEAD OFFICE
North Wing, Level 2
1 Manning Street
Scarborough WA 6019

Phone: +61 8 6166 0240

Email: admin@s2resources.com.au
Web: www.s2resources.com.au

DIRECTORS
Jeff Dowling, Mark Bennett, Anna Neuling, Grey Egerton Warburton

MAJOR SHAREHOLDERS
Mark Creasy 34%
Board, Staff and Consultants 7.8%