Aruma Resources Pitches New Gold Camp

THE CONFERENCE CALLER: Gold explorer Aruma Resources (ASX: AAJ) is living proof the market doesn’t always respond appropriately to the release of a promising set of drill results. By Mark Fraser

On the day the company’s managing director Peter Schwann spoke at the RIU Explorers Conference in Western Australia, Aruma had just published the initial assay results from 37 of a 40 hole 4,518 metre maiden RC drilling program at its Saltwater gold project in WA’s Pilbara.

On face value this all should have generated some investor interest for the company.

For a start 14 out of 37 holes hit anomalous gold (over 0.2 grams per tonne), while the results extended over a 4 kilometre strike length (which was open in all directions), indicating the presence of a possible new gold camp.

Furthermore, according to Schwann, a supergene gold blanket in excess of 200m in width was identified.

In addition, the results confirmed the Saltwater anomaly, returned assays of up to 1.26 grams per tonne and validated the outcropping Saltwater ring structure, which in turn highlighted a target area of 65 square kilometres.

The market, however, did not seem bullish, with Aruma’s share price dropping from 0.094 to 0.074 cents – a fall of 21.28 per cent.

“Now the question I have to ask is: why do we want to do greenfields exploration?” a seemingly perplexed Schwann asked RIU delegates.

“We put out good results this morning and bang – down we go.

“But the rewards are great. They’re there, De Grey and Chalice prove it.

“So that’s the rant – the rant is over.”

Aruma’s close-spaced drilling targeted old workings at the historic Saltwater mining area within the recently identified and prospective Mt McGrath Formation, host of the Mt Olympus gold mine.

Meanwhile the wider-spaced holes aimed at the extension of the contact and structure under cover some 3km to the east.
Aruma told the ASX that the supergene blanket was located almost 4km from the Saltwater cluster and highlighted the potential for a significant system – with the intersection of 4m at 0.47g/t in hole SRC 32.

Saltwater has eight granted exploration licences covering 736 square km. It sits around 100km south west of Newman and enjoys a strike extent of more than 65km of the highly significant Nanjilgardy Fault, the same regional structure reported as the primary source of gold mineralisation at Northern Star Resources’ (ASX: NST) Paulsens gold mine and Mt Olympus.

Despite the confused reaction from the market regarding the Saltwater drill results, Schwann still made his case for Aruma being an investment destination just before he stood down from the RIU podium.

The company, he said, offered organic growth via project generation for large gold discoveries in Australia.

It also wholly-owns large prospective project areas near major gold deposits in underexplored areas in both WA (Saltwater, Melrose and Scotia South) and New South Wales (Capital) that combined cover 1,572sqkm.

In addition the junior is debt-free and has $3 million in cash and receivables.

Just as important, though, is the fact Aruma does not plan to idly sit around.

“We’re going to be drilling, drilling, drilling,” Schwann said.

“And the good thing about our money is that we spend our money one and a half times.

“These are the R and D returns that we have got back since I took over in 2011 ($9,570,754, or a 43.8% return, creating a tax benefit of $4,189,894), so you can see we’ve got about $4 million – about the same as a float.”