Explorers Conference propels sector into 2015

The 2015 RIU Explorer Conference, held at the Esplanade Hotel in Fremantle, Western Australia, provided the ideal launching pad for an optimistic year ahead for the junior resources mining/exploration sector.

Three things were obvious: the number of delegates present showed there is still, if not renewed, interest in the sector; investors do want to engage with company management and recognise such forums provide the best opportunity to do so; and companies that do present, or have booths, at these conferences are generally those with genuine stories, and investment opportunities, to talk about.

That final point is important with many of the 600-plus small-cap resources companies listed on the Australian Securities Exchange more likely to be investigated by the RSPCA for flogging a near-dead horse than by ASIC for corporate shenanigans.

Another indication of the interest shown in the companies presenting was the near capacity crowds filling the lecture hall right up to final presentation of the final day.

Of late it hasn’t been unusual to see people slip away after swimming through the lunchtime buffet, however the strong program of presenting companies kept them in their seats until the end of proceedings.

For our New South Wales-based chums, your opportunity is not too far away with the Sydney Resources Round-up scheduled to kick off at the Sofitel Sydney Wentworth Hotel on 13 & 14 May.

To enquire about attending just follow the link on the ad below. We look forward to seeing you there.

 


THE CONFERENCE NEWS

Will 2015 be the year of the Resources Turnaround?

THE CONFERENCE CALLER: There is probably no great surprise that the two worst performing sectors for 2014 were Energy and Resources.


Doray Minerals wins Craig Oliver Award

THE CONFERENCE CALLER: The fifth annual presentation of the Craig Oliver Award took place at this year’s RIU Explorers Conference in Fremantle.



THE INSIDE STORY

ABX puts final shine on Bald Hill

THE INSIDE STORY: Australian Bauxite Limited (ASX: ABX) recently commenced mining activity at the company’s Bald Hill bauxite mine in northern Tasmania.



ONE OFF THE WOOD

 

Richard Shemesian – Apollo Minerals

ONE OFF THE WOOD: Apollo Minerals (ASX: AON) has acquired a 70 per cent interest in the Orpheus base metals JV project with Enterprise Metals (ASX: ENT) in the Fraser Range minerals province in Western Australia with the intention to explore for major nickel and base metal deposits in the project area.


COMPANY NEWS

MacPhersons adds more ounces at Nimbus-Boorara

THE DRILL SERGEANT: MacPhersons Resources (ASX: MRP) has increased the Boorara deposit at the company’s Nimbus-Boorara silver-gold-zinc project near Kalgoorlie by 47 per cent, taking it to 10.8 million tonnes at one gram per tonne gold for 340,000 ounces of gold.


Northern Star outbids Metals X for Tanami project

THE BOURSE WHISPERER: Northern Star Resources (ASX: NST) has trumped Metals X (ASX: MLX) to win the backing of the Board of Tanami Gold (ASX: TAM) for the acquisition of Tanami’s Central Tanami project (CTP).


Doray includes Suzie to increase Andy Well Resource

THE DRILL SERGEANT: Doray Minerals (ASX: DRM) has released a maiden high-grade Resource for the Suzie Zone, situated within the company’s Andy Well gold project in the northern Murchison region of Western Australia.


Kin Mining secures $1M funding deal

THE BOURSE WHISPERER: Kin Mining (ASX: KIN) has signed a Binding Term Sheet for an investment of up to $1 million to take advantage of an early stage mining opportunity at the Lewis prospect, located within the company’s Cardinia project area.


Dacian increases underground Resources at Westralia

THE DRILL SERGEANT: Dacian Gold (ASX: DCN) announced a Mineral Resource increase for the Westralia gold deposit at the company’s Mt Morgan project, located in the Laverton District of Western Australia’s North Eastern Goldfields.


Mithril intersects Stark disseminated and massive sulphides

THE DRILL SERGEANT: Mithril Resources (ASX: MTH) released results of two follow-up diamond drill holes (NRD15001 and 002) recently completed at the company’s Stark copper-nickel-PGE prospect near Meekatharra in Western Australia.

 

UPCOMING CONFERENCES

 

 

 

 

ABX puts final shine on Bald Hill

THE INSIDE STORY: Australian Bauxite Limited (ASX: ABX) recently commenced mining activity at the company’s Bald Hill bauxite mine in northern Tasmania.

Reaching such a stage for any mining company from the small end of town in the present environment is no small feat, especially when you throw achieving such a significant milestone on schedule and below budget into the mix.

Bald Hill is the company’s first of its ‘Eastern Australian Bauxite Province’ projects to be commissioned.

 

Some people may be surprised to learn that the Bald Hill mine is the first bauxite mine to be developed on the Apple Isle.

The same people will be just as surprised to learn that Bald Hill is, in fact, the first bauxite mine to be developed in Australia in over 35 years.

With operations kicking off at Bald Hill in December 2014, ABX has seamlessly made the transition from mine developer to producer.

“In 2006 our exploration efforts led us to the discovery of gibbsite-rich bauxite in Eastern Australia – similar to bauxite exported from Indonesia,” Australian Bauxite CEO and managing director Ian Levy told The Resources Roadhouse.

“We embarked on our Initial Public Offering to list on the ASX in 2009 only 3 weeks after Indonesia passed laws banning bauxite exports from 2014.  

“Throughout this entire time our aim was to start a project by the second half of 2014, which we managed to achieve with the project starting 9 December 2014.”

Mining of two bauxite pits at Bald Hill carried out by ABX during January 2015 has already stockpiled thousands of tonnes of ore.

“We are now producing final product bauxite and from the get go we were ahead of schedule,” Levy said.

“We are making good progress and our shipping schedule commences in the second quarter 2015, as we build up large product stockpiles, sufficient for daily rail deliveries and monthly shipments.

“From there we will enlarge the daily rail shipments down to the port to build-up large enough tonnages for the largest ships we will be using at about 60,000 tonnes.

“Our plan is to bring into Tasmania – through Bell Bay Port north of Launceston – the largest ships that have ever been used in the state – initially on a monthly basis, then twice-monthly.”

 

ABX plans to ship around 0.5 million tonnes of bauxite in its 1st year and increase that figure to two million tonnes per annum in 2017-2018 by opening up additional bauxite operations at Fingal Rail and DL-130.

The company is determined to contribute to Australia’s well-deserved reputation as the world’s largest miner of bauxite.

The wide brown land has produced a great deal of the bright red commodity, pumping out 32 per cent of global production in 2011 alone.

In its Australia’s Identified Mineral Resources 2012 report, Geoscience Australia said bauxite resources at Weipa in Queensland and Gove in the Northern Territory rank amongst the world’s highest grade deposits.

The report also named major deposits located in Western Australia – being in the Darling Range, the Mitchell Plateau and at Cape Bougainville, of which the latter two have not been developed.

According to Geoscience Australia the bauxite mines in the Darling Range have the world’s lowest grade bauxite ore mined on a commercial scale (around 27 to 30 per cent aluminium oxide), which despite the low grades, accounted for 23 per cent of 2011 global alumina production and is amongst the lowest cost producer of alumina, mainly because it is gibbsite-bauxite, like ABX’s.

Historically all of this bauxite had been used in vertically integrated business strategies all the way through from the mining of the bauxite through to it refined by in-house alumina plants.  There was no market price for bauxite and no possibility of seaborne bauxite trade.
 
Then, China emerged as a dominant player in the aluminium industry moving from zero percentage of the world’s production to 55 per cent in the space of 16 years.

To expedite this, China built facilities based on imported gibbsite-bauxite – mainly from Indonesia, which worked well enough until Indonesia banned bauxite exports on 12 January 2014.

“China used its own domestic bauxite for just over half of its production, but the coastal producers, particularly in Shandong and Henan Province, built low temperature alumina plants similar to those in Western Australia,” Levy said.

“To feed these plants China relied on imported low-temperature gibbsite type bauxite from Indonesia.”

In anticipation of the ban China has reportedly stockpiled 12 month’s supply of bauxite, which is thought to be mostly low-quality and lower than official figures suggest, however pundits suggest it should be able to last for most of 2015.

The bauxite ABX is producing from Bald Hill in Tasmania is similar to that sold by traditional bauxite suppliers, Indonesia and India, in that it is gibbsite-rich bauxite.

This places it in the premium-priced category, as ‘low-temperature’ gibbsite-rich bauxite, often called THA or trihydrate bauxite, and enables the Chinese plants to fully-benefit from the cost benefits of the low-temperature refining process.

ABX bauxite is also valued for its low silica content, which is a major contaminant problem for bauxite suppliers.

“At the moment it appears everything seems to be going our way,” Levy said.

“When we published our business plan in 2012, we had built into it a weakening Australian exchange rate – to as low as US85 cents – and an increasing bauxite price in the order of $70 per tonne CIF China, both are currently better than that estimate.

“So overall we picked the market pretty much right and we’re even getting an unexpected added benefit from all-time low shipping costs nowadays.

“Now we need to ramp up production as fast as we can to capitalise on this once-in-a-lifetime market opportunity.”

ABX’s Australian bauxite vision reaches far beyond the shores of Tasmania to encapsulate, what the company describes as its Eastern Australian Bauxite Province.

ABX’s portfolio consists of 37 fully-owned bauxite tenements in Queensland, New South Wales and Tasmania covering 5,029 square kilometres.

The company’s selection criteria includes: good quality, gibbsite-rich, low silica bauxite; near infrastructure connected to export ports (eg. ABX’s DL 130 deposits in northern Tasmania are within 75km of the Bell Bay Export Port); and free of socio-environmental constraints.

As well as Bald Hill, the company has also reported Mineral Resources at Inverell and Guyra in northern NSW, Taralga in southern NSW, Binjour in central QLD with total JORC resources exceeding 116 million tonnes.

All of these bauxite deposits are favourably located for direct shipping of bauxite to both local and export customers.

“The Binjour project in Queensland is still the company’s flagship,” Levy stressed.

“It is probably the best bauxite investment in the Pacific Basin that isn’t already owned by one of the major mining companies.

“However it does have a much higher capital cost at $150 million and we will be exploring there around the middle of the year.

“All I can say at this stage is – watch this space – it is a major project.

“We completed a raising in November 2014 of $3.75 million, much of which was specifically designated for the exploration at Binjour – it’s all looking good.”

Australian Bauxite Limited (ASX: ABZ)
…The Short Story

HEAD OFFICE
Level 2
131 Macquarie Street
Sydney NSW 2000

Ph: +61 2 9251 7177
Fax: +61 2 9251 7500

Email: corporate@australianbauxite.com.au
Web: www.australianbauxite.com.au

DIRECTORS
Ian Levy, Paul Lennon, Ken Boundy

Corazon takes Victory at Lynn Lake

THE INSIDE STORY: They say the grass is always greener on the other side of the fence so why not remove the fence?

This may be a hackneyed phrase for some, however the current investor-shy environment the junior sector is weathering means it would be wise for companies to find ways of improving the assets they currently own.

Corazon Mining (ASX: CZN) has recently taken advantage of such an opportunity by finalising terms for the acquisition of the Victory nickel project in the Lynn Lake nickel-copper field, in the province of Manitoba – Canada’s third largest nickel producing region, from TSX-listed Victory Nickel.

The Victory project is located immediately adjacent to Corazon’s Lynn Lake nickel copper sulphide project, which contains the EL Deposit where Corazon made its 2011 discovery of a high-grade sulphide breccia at depth.

By acquiring the Victory project, Corazon has reunited the Lynn Lake nickel-copper field for the first time since its closure in 1976.

 

To reprise our metaphor – the company now has a lawn large and green enough to be the envy of its peers in the currently white-hot nickel space.

“We have always had the intention of revamping this project, it has been a long-term goal of the company,” Corazon Mining managing director Brett Smith told The Resources Roadhouse.

“Joining these two projects together just had to be done – it was just a matter of how it would be structured and how we would go about doing that.

“Victory Nickel was very quick to realise the potential of the entire project area as being one project and were happy to do the deal and let us lead.”

Amalgamating the Lynn Lake and Victory projects provides Corazon with a potentially much longer mine life and logistically a more robust mining operation.

Previous mining studies at Lynn Lake have focussed on the deep mineralisation at the Victory project.

By combining this with mineralisation from surface at the EL Deposit, there is potential to significantly reduce up-front capital costs and provide earlier cash flow, hence improved project benefit.

“This is a low-grade deposit and development is dependent on an improved nickel metal price,” Smith explained.

“However, it’s a big tonnage low-cost mining proposition and the costs of mining in Canada are significantly cheaper when compared to those in Australia.”

The Lynn Lake mining centre operated from 1953 until 1976, producing 22.2 million tonnes at one per cent nickel and half a per cent copper at a rate of approximately one million tons per annum.

Lynn Lake is Canada’s third largest nickel mining region and, following completion of the Victory project acquisition, will be controlled entirely by Corazon.

“It’s a mature mining area, however as supported by recent exploration results, we are confident we will discover more mineralisation at Lynn Lake,” Smith said.

Since moving into the Lynn Lake neighbourhood in 2010, Corazon’s key target has been the EL Deposit, which was the highest grade mine at Lynn Lake, producing 1.9 million tonnes at 2.5 per cent nickel and 1.15 per cent copper.

The company’s confidence in Lynn Lake was rewarded in 2011, when it discovered a new high-grade sulphide breccia at depth below the EL Mine, which confirmed prospectivity was still part of the of the Lynn Lake field story, despite the camp’s extensive past mine life.

The discovery drill hole (XND001W1) intersected:

23.75 metres at 3.34 per cent nickel, 1.54 per cent copper and 0.079 per cent cobalt from 731.25m.

The celebration of the EL Deposit discovery in 2011 was unfortunately short-lived as a global slump in the nickel price dictated a temporary halt to further exploration in 2012.

“We stopped exploring and reviewed what forecasters were saying at the time about the nickel price, which was that by the end of 2015 the nickel price would be improving and the market would be much more positive,” Smith said.

It would seem the company’s crystal ball was well-tuned with nickel enjoying a strong run last year on the back of the decision taken by the Indonesian Government to ban the export of unprocessed ores.

Although the initial excitement behind the gains weakened somewhat, the recent revival has analysts predicting happy days ahead for the metal.

Corazon has always considered there to be a great deal of potential at the EL Deposit, where the company has identified encouraging mineralisation from surface surrounding the historical mine.

This mineralisation is not included in the current interim Inferred Resource, but is defined by the ‘Upper-Zone Exploration Target’, which Corazon feels may be exploitable by open-pit mining methods.

The company is convinced this mineralisation is critical to the recommencement of mining at Lynn Lake and has highlighted it as a priority resource definition target.

Defining a new resource, including the most recent drilling, is high on the company’s current agenda, which it expects to commence as soon as it can.

The Victory project brings with it a Canadian (NI 43-101) Measured, Indicated and Inferred Resource totalling 17 million tonnes at 0.66 per cent nickel and 0.33 per cent copper, and an alphabet of deposits situated in close proximity to Corazon’s EL Deposit.

Exploration and mining/processing studies have been carried out on the Victory project by previous operators, with the N and O deposits situated within the A Plug are considered to host the largest resource potential.

“We hope to generate 10 to 15 years of mine life on the know areas of mineralisation,” Smith said.

“We think an active exploration program will extend the mine life estimate a lot further than that.”

The Victory project has been the subject of a continuous stream of work by previous owners, including resource and reserve models completed in 2005 and 2007 with the most recent carried out 2009-2010 by Prophecy Resources Corp.

This work was incorporated in a pre-feasibility study during 2007, which predominantly focused on the N and O deposits within the A Plug.

What Corazon now has is a brownfields project with a Canadian NI-104 Resource it can readily merge with its own Resource and drill-defined mineralisation to achieve JORC-2012 compliance.

With all that work already under its belt the company is poised to commence the necessary Scoping Study work.

“Our aim is to have the Resource work completed by early 2015, and have a good understanding of past mining and processing studies,” Smith continued.

“Modern development work has been carried out – a pre-feasibility study completed in 2007- 2008 – which means it should be a matter of picking that up, dusting it off and bringing it up to the required level.”

The combined project stands up as a significant asset.

Corazon is targeting plus 150,000 tonnes of nickel metal, plus copper and cobalt credits, so in terms of size, it is quite substantial.

“The time line for bringing this into production is a lot shorter than if we had to develop a greenfield discovery,” Smith said.

“We have created a company with a significant resource with potential for a long-life mining operation in an environment where the experts are forecasting very positive things for the nickel metal price.

“Our timing is right as the economic conditions throughout the world, particularly in Canada, means we can stretch our dollar a lot further.

“Basically we think we have got a significant resource in a very good mining environment in a premier Canadian mining province.”

Corazon Mining Limited (ASX: CZN)
…The Short Story


HEAD OFFICE

Level 1
350 Hay Street
Subiaco WA  6008

Ph: +61 8 6364 0518   
Fax: +61 8 6210 1872

Email: info@corazon.com.au
Web: www.corazon.com.au

DIRECTORS and MANAGEMENT

Clive Jones, Brett Smith, Jonathon Downes, Adrian Byass

MAJOR SHAREHOLDERS

Top 20             23.8%
Board            3.5%
Graeme Wallis        3.2%

Ironbark anticipates big zinc payday

THE INSIDE STORY: Ironbark Zinc (ASX: IBG) is focused on the zinc component of the company’s wholly-owned Citronen base metal deposit located in Greenland.

The Citronen project currently hosts in excess of 13 billion pounds of zinc and lead with a JORC-compliant resource of 55.8 million tonnes at 6.1 per cent zinc and lead, including an Indicated resource of 29.9 million tonnes at 5.8 per cent zinc and 0.6 per cent lead, and an Inferred resource of 25.9 million tonnes at 5 per cent zinc and 0.7 per cent lead.

This includes a higher grade resource of 22.6 million tonnes at 8.2 per cent zinc and lead with an Indicated resource of 14.3 million tonnes at 7.8 per cent zinc and 0.7 per cent lead and an Inferred resource of 8.2 million tonnes at 7.1 per cent zinc and 0.7 per cent lead.

 

The company recently lodged a formal application for an Exploitation Licence (Mining Licence) for Citronen with the Greenland Government authorities.

“Being able to lodge the Mining Licence application is a defining step forward, not just for the Citronen project but for Ironbark as a company,” Ironbark Zinc managing director Jonathan Downes told The Resources Roadhouse.

“Defining because it is an important step that enables us to progress the project that much closer to towards developing a globally significant zinc mining operation, which will ultimately rank as the fifth largest in the world.

“The thing that defines the Citronen project, as far as being ASX-listed junior exploration play goes, is that zinc has, in recent times, been a neglected commodity.

“There is no other ASX-listed company that has dedicatedly focused on a zinc project right through such a long period of negativity and taken it as far as we have.

“We have followed it through. We purchased a world-class asset and have spent over $50 million taking it through a BFS to now having just lodged our Mining Licence permit.”

It is true that zinc has not been high on the commodity hit-list as investors and developers have concentrated their collective attention on the traditional market favourites of gold and iron ore.

So much so, one could say this has resulted in zinc being under-invested for far too long, however, this looks likely to change with a serious shortage about to hit the market.

Zinc is probably the one commodity that is the most resource-constrained and there is very limited, potential new supply to come on to fill the gap.

The key to this supply issue is the depletion and upcoming closure of great producing zinc mines, such as the 500 tonnes per annum Century mine of MMG and the 215,000tpa Lisheen mine of Vedanta Resources, which are both scheduled to close in early 2015.

Zinc prices are on the rise. While this is not any great phenomenon it is to be expected according to mining engineering economists AME Group, which suggests zinc price forecasts are being driven by impending mine closures.

These closures of Lisheen and Century are not inconsequential with the zinc market experiencing a 200,000 tonnes deficit from the first half of 2014, and MMG facing delays with its proposed 215,000tpa Dugald River operation in Queensland.

All this conspires to indicate the zinc market faces a deficit of over 4300,000 tonnes in the full year 2014.

In June the LME zinc spot settlement price rose by a healthy 7.7 per cent taking it to US$2,214 per tonne.

AME Group said zinc prices reached three-year record highs during June this year as LME stocks tumbled to four year lows.

“In June, LME warehouse stocks continued their falling trend from December 2012 and fell another 43,000 tonnes, or 6.5 per cent, to 668,000 tonnes, a level not seen since November 2010,” AME Group said.

Another contributing factor to the rise in zinc’s fortunes has been a slow rise in production of refined zinc, only four per cent during May to 461,000 tonnes, in China.

AME explained Chinese production of zinc is broadly cyclical, which has its analysts expecting refined zinc production to fall further.

“In May, Chinese imports of finished zinc were down month on month by 24 per cent to 49,000 tonnes; however, year-to-date quantities are still 27 per cent higher year on year compared to 2013,” AME said.

“Chinese imports of zinc concentrates, whilst down 21 per cent year on year in April, are still showing a 21 per cent increase for the first third of the year compared to 2013.

“The influx of imported concentrates into China have seen treatment charges (TCs) climb to US$140-155 per tonne, up from US$135-145 per tonne.

“This has been the second consecutive month of increases with rises in April attributed to ample local supply.”

No matter which way you approach it, the result will be a serious lack from the supply side of the global zinc equation.

The situation is underlined by the fact there have been very few companies with the vision to explore new deposits or develop new mines for a very long time.

“The serious supply issues are going to bite and they’re going to bite hard. There will be a classic zinc run, like the one we saw back in 2007, where zinc ran all the way up to hit US$2.20 per pound,” Downes said.

“At the moment the long-term tenure average for zinc is around US$1.30 per pound, and at present the price is sitting around US$1.02 per pound.

“Even if it gets back to long-term average we are looking at developing a very healthy mine, which means that should we see a real tightness in the market, which many analysts are forecasting, we anticipate seeing an extraordinary zinc run.

“We are on the starting blocks. We have done everything – the granting of the Mining Licence Application was the final piece of the puzzle – so when the zinc run comes we will be ready for it.”

 

A recent capital raising of $2.5 million ensures the company can continue to progress permitting and pre-development preparation works at Citronen.

The placement was strongly supported by Ironbark’s loyal shareholder base to the point where it was more than four times oversubscribed.

“Our shareholder base, which includes strategic partners China Nonferrous, Nyrstar and Glencore, has a strong attachment to and understanding of the global zinc industry,” Downes said.

As part of the Mining Licence application, Ironbark will undertake a full Feasibility Study covering the Process Plant, Infrastructure Works, Mine Development-Underground and Open Pit, Tailings Disposal, Power Generation, Accommodation and Emergency Services, Ship-Loading and Shipping and Execution Planning.

“We look forward to making significant progress on permitting and development as we progress the project to the next stage,” Downes continued.

“This is a fantastic project, in a supportive mining jurisdiction that will be producing a much sought-after commodity.

“How can we not be excited by what the future may hold?”

Ironbark Zinc Limited (ASX: IBG)
…The Short Story

HEAD OFFICE
Level 1
350 Hay Street
Subiaco WA  6008

Ph: +61 8 6461 6350
Fax: +61 8 6210 1872

Email: info@ironbark.gl
Web: www.ironbark.gl

DIRECTORS and MANAGEMENT
Jonathon Downes, Adrian Byass, Gregory Campbell, Chris James, Peter Duncombe Bennetto, John McConnell, David Kelly, Gary Comb

MAJOR SHAREHOLDERS
Nyrstar NV             23.62%
Glencore Xstrata         10.66%
L1 Capital             8.16%
Board and Mgt         5.9%

Impact drilling towards success

THE INSIDE STORY: While a lot of juniors have put the drill bit on the shelf, Perth-based Impact Minerals (ASX: IPT) has maintained the exploration rage on the company’s diverse exploration projects.

A recent Explorer Quarterly Cash Update report from accounting and advisory firm BDO identified one in 10 ASX-listed exploration companies did not carry out any exploration during the 2014 June quarter.

“This is a very telling statistic, showing that a material portion of the ASX-listed explorers are not doing what their ‘mum and dad investors’ would be expecting them to do,” the BDO report noted.

“Investing in exploration companies has always been a more risky use of capital than investing in more stable businesses, but for companies that are not exploring at all, there is no possibility of any reward to investors for that risk.

“If this situation continues, finding investors for companies classified as ‘explorers’ will become more and more difficult.”

In July this year Impact Minerals overcame that perceived difficulty to announce an oversubscribed $2.59 million capital raising through a placement of approximately 78.4 million shares at an issue price of 3.3 cents per share.

The funds raised were earmarked to fund drilling at the company’s high-grade precious and base metal Commonwealth and Broken Hill projects in New South Wales.

“This was an important result for us and our shareholders,” Impact Minerals managing director Dr Mike Jones told The Resources Roadhouse.

“In this very difficult time for junior exploration companies we were looking to raise between $2 million and $2.5 million so to close oversubscribed was an indication of the faith our shareholders have in our New South Wales projects.

“The Board’s decision was that we had to cut costs where we could with the intention of keeping up the momentum with our exploration programs, because that’s what we’re about.

“We have been rewarded for this by being able to raise sufficient funds to carry out some serious exploration activities.”

The raising ensured Impact was fully-funded for the maiden drill program at its 100 per cent-owned Commonwealth gold, silver and base metals project, located 100 kilometres north of Orange in NSW.

The program tested a number of targets identified by Impact for high-grade gold-silver base metal mineralisation at the project’s Main Shaft, Commonwealth South and Silica Hill prospects as well as the Coronation Trend and has provided a great deal of encouraging results from the get go.

So much so Impact immediately extended the 2,500 metre program by 500m after initial assays confirmed extensions of the deposit at the Commonwealth South prospect.

As the program progressed results continued to extend the high-grade, near surface deposit.

Reverse circulation (RC) drill results include:

7 metres at 25.5 grams per tonne gold, 62g/t silver, 3.8 per cent zinc, 1.6 per cent lead and 0.1 per cent copper from 88m down hole; and

21m at 2.9g/t gold, 21.6g/t silver, 1.2 per cent zinc and 0.6 per cent lead from 53m.

 

“These are significant gold results and we continue to be very encouraged that we could be looking at the discovery of a major deposit at Commonwealth,” Jones said.

“This is the first systematic drill program we have conducted beneath the near surface high-grade mineralisation.

“Our intention was to define the orientation of the mineralisation in order to allow further step out drilling at depth and the results we have received have demonstrated this is being achieved.”

Needless to say Impact was excited by the first discovery of massive sulphide mineralisation at Commonwealth South, however what really has the company dancing on hot coals is the potential the deposit has shown for further extensions to the south and at depth.

The company has programmed further ground IP and soil geochemistry surveys to assist in the definition of follow up drill targets.

As far as maiden drilling programs go this one has delivered in spades so far, yet has only tested a very small part of the 20km long mineralised trend within Impact’s licences, which includes the recently-identified and undrilled Doughnut target 2km to the north, which has returned strong copper-in-soil responses and has subsequently been identified as a priority target for follow up work including IP surveys.

While all this has been going on Impact has been preparing another maiden drill program, this time at the Broken Hill nickel-copper-PGE project, also in NSW.

Impact recently earned a 51 per cent interest in the rights to nickel-copper-PGE mineralisation from Golden Cross Resources (ASX: GCR) at the Broken Hill Joint Venture project, which was recently awarded a grant of $125,000 under the NSW State Government’s Co-operative Drilling Funding Program.

The company is eager to complete earning 80 per cent of the metal rights by spending a further $200,000, which it has to complete by 2017, however it is anticipated this expenditure will be met during the forthcoming drill program to be conducted at the Red Hill prospect.

 

The Red Hill prospect occurs within an ultramafic intrusive unit, which outcrops over an area of about 500 square metres with a nickel-rich core and copper-precious metal-rich margins – a feature common in many major nickel-copper-precious metal sulphide deposits around the world.

“This is a priority area for drilling,” Jones said.

“Both the western and, in particular, the eastern margins of the unit are marked by copper-in-soil up to 200 metres wide and 600 metres long.

“Within these margins are a further three priority areas for follow up work covering several hundred square metres and which contain rock chip samples with high-grade nickel, copper and precious metal assays.”

Impact completed a soil geochemistry survey, which has been submitted for analysis by the MMI partial digest (nickel and copper) and fire assay (platinum, palladium, gold and silver), while follow up detailed mapping as well as further rock chip sampling have also recently been completed at Red Hill.

An Induced Polarisation ground geophysical has also commenced.

The results of all of this work will be integrated to define specific drill targets for the program scheduled to commence in November 2014 subject to statutory approvals, the documentation for which has been lodged with the relevant government department.

From the east coast Impact has still managed to keep a close eye on its Mulga Tank project, located on the Minigwal greenstone belt in the eastern part of the Yilgarn Craton in Western Australia.

The company has identified twelve new priority target areas for nickel-copper and copper-gold deposits at Mulga Tank following a review of a broad spaced ionic leach soil geochemistry survey covering the central part of the 425sqkm project area.

Six of the targets occur on the west side of the project area, along strike and adjacent to the Mulga Tank Dunite where Impact discovered nickel and copper mineralisation under about 50m of transported cover.

Impact considers the Mulga Tank project to be prospective for nickel and copper sulphide deposits similar to the Perseverance (45Mt at 2% nickel) and Rocky’s Reward (9.6 Mt at 2.4% Nickel) mines near Leinster.

Its belief stems from the Mulga Tank Dunite, which is similar to the host for the Perseverance nickel deposit as well as the host unit to the Mount Keith disseminated nickel deposit, which contains more than 2 million tonnes of nickel metal.


Impact Minerals Limited (ASX: IPT)
…The Short Story

HEAD OFFICE
26 Richardson Street
West Perth WA 6005

Phone: (61 8) 6454 6666
Facsimile: (61 8) 6454 6667

Email: info@impactminerals.com.au
Website: www.impactminerals.com.au

DIRECTORS and MANAGEMENT
Peter Unsworth, Dr Mike Jones, Paul Ingram, Dr Markus Elsasser, James Cooper-Jones, Leo Horn

MAJOR SHAREHOLDERS
Bunnenberg Family 30%
Directors 11%
Aviana Holdings 2.3%

Persistence the key to unlock Dunnsville

THE INSIDE STORY: Two attributes that regularly pay off for junior exploration companies are: the patience to let tenements reveal their spoils; and the tenacity to not let the opportunity to develop them slip away.

Parmelia Resources (ASX: PML) originally acquired the Jaurdi Hills project, located 50 kilometres north-west of Coolgardie in Western Australia, as a potential gold endeavour.

Because of its location close to Coolgardie, all the historic exploration had focused on gold.

In the days of the famous nickel boom CRA Exploration scored some nickel hits in the 1960s, however this was in a different geological horizon and ultra-mafic belt to where Parmelia is currently working.

The 100 per cent-owned project comprises 16 granted Mining Leases, 24 granted Prospecting Licences and one granted Exploration licence covering a total of 85.4 square kilometres.

A systematic review by Parmelia of historical exploration data has highlighted the Dunnsville nickel prospect, located in the north-east of the property, to be of considerable interest.

Parmelia has re-processed and analysed data from a GEOTEM survey conducted over the Jaurdi Hills project in 2004, cursorily mapped surface geology of the Northern and Southern high priority targets, re-interpreted geology of the Jaurdi Ultramafic Belt, collected surface samples from the prospect and digitised data from a rock chip sampling program conducted by CRA Exploration in 1968.

Basically, Parmelia has developed a project by conducting a multi-generational, historic data search that highlighted anomalous nickel in the right sort of geological setting.

Encouraged by early results, Parmelia rolled up its sleeves and went in search of data that could provide more detail about the project.

“Our success so far is due to the exceptionally diligent and detailed work of our geologist, Steve Burke,” Parmelia Resources executive chairman Nigel Gellard told The Resources Roadhouse.

“He has sat down and systematically worked through the historical data.

“It is credit to Steve’s competency he was able to recognise the significance of the smallest piece of information and then begin the long and arduous task of searching through available historical data.

“In some cases data was missing or only available through obscure sources, however he persevered and tracked it down.

“We were fortunate to have the support of the dedicated team at the archives division of the Department of Mines and Petroleum who were able to dig through a number of old boxes until they unearthed some crucial missing data.

“We found the geological setting to be right and thought that was an extremely interesting development.

“As we started to peel back the layers of the onion we found we had the right geological setting and the right nickel anomalism, however we knew we still needed more.

“Our persistence was duly rewarded with the identification of a coincident copper anomaly, a coincident cobalt anomaly, and a coincident platinum and palladium anomaly – all of the right elements an explorer wants to see when trying to identify a nickel-sulphide deposit.

“As we worked through the historical data and started to plot the historic rock chip sampling, soil sampling and programs from various generations of historic exploration work dating back to the 1960s and 1970s, we started to see anomalies for each of these key nickel sulphide pathfinder elements lighting up in exactly the same spot.

“This exciting area is what we refer to as our Southern High Priority Target.”

 

The historical rock chip sampling program conducted in 1968 by CRA collected 435 rock chip samples as part of a comprehensive nickel-sulphide exploration program over the Jaurdi Hills/Dunnsville area.

Analysis of the results from this program by Parmelia revealed three of the closest samples to the Southern High Priority Target comprise one of two anomaly clusters within the Jaurdi Hills project.

These returned co-incident results of greater than 1000ppm nickel and 300ppm copper.

Subsequent rock chip samples collected by Parmelia from an outcrop at the base of the Jaurdi Ultramafic Belt, 230m from the Southern Target conductivity anomaly, returned further highly anomalous nickel (1358ppm), copper (1849ppm), platinum (194ppb) and palladium (125ppb) results.

The results coincided with a soil geochemistry anomaly at the target and elevated nickel and copper results returned from nearby CRA rock chip results.

Core Geophysics analysed legacy GEOTEM airborne EM survey data, flown in 2004, which identified a late-time (18.6 millisecond) conductivity anomaly coincident with the Southern High Priority Target.

“The most interesting piece of the jigsaw puzzle was yet to come,” Gellard said.

“We discovered the peak historical nickel (1260ppm), copper (315ppm) and cobalt (150ppm) soil sample results returned from the Southern Target are located almost exactly up-dip of the centre of the conductor while elevated PGE (plus-60ppb platinum and palladium) results encircle the anomaly.”

The body is modelled as having a depth to top of 220m below surface, a strike extent of 300m and down-dip extent of 200m.

Early this year Parmelia completed reconnaissance mapping at the Northern High Priority Target, which confirmed the presence of cumulate-textured channel and spinifex-textured sheet-flow facies komatiitic sequence of the type that generally hosts Kambalda-type massive and disseminated nickel-sulphide deposits in the Yilgarn Craton.

As any junior explorer would, Parmelia has been greatly encouraged by its discovery of a possible bedrock conductor down-dip of anomalous nickel, copper, cobalt and PGE soil geochemistry at the Southern High Priority Target.

Its reassessment of historical data to date has been reinforced in terms of the exploration potential of the Dunnsville Nickel prospect with the occurrence of anomalous nickel and nickel-sulphide pathfinder geochemistry in the rock chip samples collected earlier by CRA and most recently by Parmelia near the Southern Target.

Adding further support is the Northern Target, located just outside the GEOTEM survey area offering Parmelia the allure of possibility detecting another conductivity anomaly.

Parmelia recently completed an over-subscribed placement to sophisticated investors to raise $1.1 million.

The funds will be used to progress upcoming exploration programs at Jaurdi Hills, the first of which will be a high-power, deep-penetrating, orientation moving-loop EM survey over the Southern Target conductivity anomaly in order to verify whether its source is bedrock or regolith.

The EM survey is expected to start in the next two to three weeks and if a prospective bedrock conductor is identified then the survey will be expanded to encompass the remainder of the Southern Target.

The Northern High Priority Target will also form part of the survey.

If the ground EM detects bedrock conductors at the Southern and Northern targets then these will be drill-tested immediately by a program of RC or RC pre-collar/diamond tail holes.

All holes will be downhole EM surveyed to test the surrounding rock mass for conductivity responses indicative of near-missed mineralisation regardless of whether nickel-sulphides are intersected.

The company will continue with its historical exploration data compilation, geological mapping and rock chip sampling at Dunnsville in parallel with the proposed ground EM and drilling program.

“We feel there is significant potential at our Dunnsville project and this merits further, more detailed investigation,” Gellard said.

“When you’re getting mineralisation, coincident with geophysical anomalies, coincident with the right geology and surface expression, all of a sudden it starts to look like something pretty interesting and all the arrows are pointing to the same spot.

“You start to get a little bit excited.”


Parmelia Resources Limited (ASX: PML)
…The Short Story

HEAD OFFICE
Level 4, 66 Kings Park Road
West Perth WA 6005

Ph: + 61 8 6141 3500
Fax: +61 8 6141 3599

Email: info@parmeliaresources.com

Website: www.parmeliaresources.com

DIRECTORS
Nigel Gellard (Exec Chairman), Peter Ellery, Jay Stephenson

MAJOR SHAREHOLDERS
Jolee Corporation Pty Ltd        6.64%
Everest Minerals Ltd        5.99%

Maincoast Pty Ltd            3.74%

 

Cassini buoyed by Nebo drill results

THE INSIDE STORY: Having raised $10 million on the back of a most audacious project acquisition, junior exploration play Cassini Resources (ASX: CZI) wasted no time in kicking off a comprehensive drilling campaign.

The company commenced its maiden drilling campaign at the 100 per cent-owned West Musgrave project in Western Australia just six months after acquiring it from BHP Billiton Nickel West and BHP Billiton Minerals, two subsidiaries of global mining powerhouse BHP Billiton (ASX: BHP).

The West Musgrave project contains the Nebo and Babel sister deposits, commonly referred to as Nebo‐Babel, the Succoth copper exploration prospect plus a number of prospective exploration targets.

Nebo‐Babel currently has an Inferred resource 446 million tonnes at 0.33 per cent nickel and 0.35 per cent copper (0.2 per cent nickel cut‐off) for 1.47 million tonnes of contained nickel and 1.56 million tonnes of contained copper.

“BHP originally approached the project with the intention it would become a large large‐scale, low‐grade production model,” Cassini Resources managing director Richard Bevan told The Resources Roadhouse.

“We have said from the start that, as a junior exploration company, we intend taking a different approach with the project differently, as a high-grade opportunity –a much smaller project than what BHP originally envisaged.

“That being the case we are now out there drilling with the expectation of being able to really get in there and define that high-grade ore body.”

Drilling commenced at the Nebo and Babel deposits on 2 September 2014 aiming to prove up continuity of massive nickel-copper sulphide lenses and high‐grade disseminated zones.

 

The drilling is also intended to upgrade a large portion of the current Inferred Resource to the Indicated category.

Cassini’s $10 million capital raising is being put to good use with the program to consist of approximately 25,000 metres of reverse circulation (RC) drilling and approximately 700m of diamond core drilling in a combination of infill and exploratory step‐out drilling.

At the time of writing the company had received assay results from the first four RC drill holes at Nebo, which provided it with a great deal of encouragement by intersecting anticipated high‐grade nickel and copper.

The drilling intersected – what is known as – the Marginal Breccia Zone (MBZ), which hosts the massive sulphides that have previously revealed higher‐grade nickel and copper.

The drilling also intersected wide zones of disseminated sulphide mineralisation beneath the MBZ, with grades of nickel and copper high enough to form a significant portion of the current estimated mineral resource.

Nebo-Babel is a shallow, large tonnage open pittable nickel sulphide orebody, and as such Cassini has determined a resource grade of greater than 0.7 per cent nickel and 0.6 per cent copper to be on the mark.

In light of this, the company is fairly chuffed with the assay results it received from the first four drill holes at the project, which included:

WMC0015
28m at 1.38 per cent nickel and 0.87 per cent copper from 63m, including 6m at 3.40 per cent nickel and 0.96 per cent copper from 84m;

WMC0004
29m at 1.00 per cent nickel and 0.61 per cent copper from 56m, including 2m at 3.12 per cent nickel and 1.07 per cent copper from 81m.

It is worth noting drill hole WMC0015 intersected the thickest and highest grade mineralisation to have been drilled to date on Section 371900E, easily clearing the previous best historical intercept of 16m at 0.84 per cent nickel and 0.56 per cent copper.

The result achieved by WMC0004 met the company’s expectations, having been drilled 50m down-dip from a further historical hole – WMN11, which returned 19m at 2.16 per cent nickel and 1.09 per cent copper.

The other two holes to be assayed so far, WMC0014 (11m at 0.19 per cent nickel and 0.45 per cent copper) and WMC0002 (broad anomalous zone less than 0.4 per cent nickel) returned intersections indicating the presence of broad, lower‐grade disseminated mineralisation beneath the MBZ.

Although they may not be as exciting as the results from the other two holes these are also in line with expectations as they were drilled on the periphery of the current high‐grade resource model.

“That we have intersected the best mineralisation so far supports the company’s belief that the previous drill spacing on nominal 200 metre centres was too broad to define a continuous core of higher ‐grade mineralisation,” Bevan said.

“These initial results support not only the existing resource model, but also demonstrates the potential of a higher‐grade core of mineralisation that could support an economic open pit mining operation.

“Any future results of this magnitude of nickel and copper mineralisation in both the MBZ and disseminated zones, will further demonstrate how close the company is to being able to deliver these objectives.”

Cassini is convinced further drilling at the Nebo deposit will demonstrate the continuity of higher‐grade mineralisation, at depths amenable to open pit mining methods.

The company remains confident it will deliver a maiden Indicated Resource at the end of the current drilling program.

The current higher grade Inferred Resource estimate for Nebo stands at 33.2 million tonnes at 0.73 per cent nickel and 0.59 per cent copper using a 0.5 per cent nickel cut‐off grade.

Since Cassini last visited The Roadhouse it has added some expertise to its management team.

Exploration manager, Dr Zoran Seat is a former exploration manager for Norilsk.

Dr Seat has a Bachelor of Science in Geology and a PhD in Geology.

Serendipitously, his PhD thesis focussed on Nebo‐Babel, examining the geology and nickel-copper‐PGE mineralisation of the Nebo‐Babel intrusion.

On completion of his PhD, Dr Seat worked as a geoscientist for BHP Billiton at the West Musgrave project.

Consultant mineralogist Ben Grguric also has impressive form as a geologist and mineralogist having worked for Western Mining and BHP.

While at BHP, Grguric played a major role in unravelling the geology and mineralogy of the Mt Keith nickel deposit.

He is regarded as a world leader in deposit mineralogy and its link with processing technology, particularly disseminated low‐grade nickel sulphide deposits.

“We have established a great team with a wealth of knowledge of the Nebo-Babel project, which we believe will stand us in good stead going forwards,” Bevan said.

Forwards seems to be the only direction Cassini is willing to contemplate for now with RC Drilling continuing at a steady pace and 42 holes now completed at Nebo where two rigs are currently on‐site.

Results from all other holes are still pending with numerous batches currently being processed at the assay laboratory.

A diamond core rig is just being mobilise to site, which will drill seven large‐diameter (PQ) holes through mineralised zones at Nebo and Babel to collect samples for metallurgical test work, which the company considers to be another key component of the project’s development strategy.

The final component of Cassini’s current exploration program for the Nebo-Babel project will be a RC/DD program to be carried out at the satellite Succoth copper prospect.

This work will be undertaken towards the end of the exploration program with the aim of increase the company’s current geological knowledge of the Succoth deposit.

The work will be specifically targeting near surface high-grade zones Cassini has identified to have the potential to contribute to the Nebo‐Babel development model.


Cassini Resources Limited (CZI)
…The Short Story

HEAD OFFICE
945 Wellington Street
West Perth WA 6005

Phone: +61 8 9322 7600
Fax: + 61 8 9322 7602

Email: admin@cassiniresources.com.au

Web: www.cassiniresources.com.au

DIRECTORS and MANAGEMENT
Mike Young, Richard Bevan, David Johnson, Dr Jon Hronsky, Phil Warren, Greg Miles

MAJOR SHAREHOLDERS
Directors         12.2%
Cornela Pty Ltd     5.5%
Top 40        49.6%

Sheffield advances Thunderbird Pre-feasibility Study

THE INSIDE STORY: Sheffield Resources has made considerable progress into the Pre-Feasibility Study being carried out at the company’s 100 per cent-owned Thunderbird deposit, located near Derby in northwest Western Australia.

Earlier this year Sheffield Resources (ASX: SFX) reported the results of a Scoping Study, which determined Thunderbird to be a world-class, long life mineral sands project able to provide exceptional financial returns with modest capital requirements.

Having acquired Thunderbird as part of the Dampier project in late 2010 after Rio Tinto (ASX: RIO) had let ownership of the title slip due to difficulties associated with the GFC, Sheffield is confident Thunderbird is a company making project.

The company has been able to demonstrate to the market that Thunderbird has the potential to be a project of significance on a global scale.

After establishing an exploration target of 450 to 850 million tonnes at five to ten per cent Heavy Minerals, Sheffield raised $10 million, which it has since put to good work.

The release of the Scoping Study followed a Resource upgrade, also completed earlier this year, when Sheffield doubled the Resource at Thunderbird, placing a lot more in the Indicated category.

The Resource at Thunderbird now sits at 2.62 billion tonnes at 6.5 per cent heavy minerals (HM) (Measured, Indicated and Inferred) for 170Mt of contained HM, including a high-grade component of 740Mt at 12.1 per cent HM.

The Scoping Study concluded projected and estimated production and financial parameters for the Thunderbird deposit to include:

An initial mine life of 32 years, targeting first production in 2017;

Life of mine (LOM) revenue of $10 billion;

LOM operating cash flow of $5 billion ($204 million per annum for first 10 years of production);

Average LOM annual EBITDA of $140 million ($187 million per annum for first 10 years of production);

Pre-production capital expenditure of $257 million plus $37 million of contingency, with identified opportunities that may reduce capital expenditure with capital payback in two years; and

Average annual production of 118,200 tonnes zircon, 545,000 tonnes ilmenite, and 21,700 tonnes of HiTi80 leucoxene.

Notably the Study has only incorporated Thunderbird’s Indicated and Measured Mineral Resources.

The high-grade Inferred segment of the Resources remains open in several directions and provides Thunderbird with a healthy amount of upside potential.

 

The company’s confidence in the project was bolstered by the results from a program of aircore drilling, during which 37 extension, infill and groundwater monitoring drill holes were completed.

Best results included:

Up-dip Extension

THAC469
30 metres at 8.56 per cent heavy minerals (HM) from 0m including 21m at 10.9 per cent  HM from 0m;

THAC468
33m at 7.74 per cent HM from 0m, including 10.5m at 16 per cent HM from 1.5m;

THAC465
30m at 7.77 per cent HM from 0m, including 10.5m at 14.3 per cent HM from 0m.

Down-dip Infill & Extension

THAC448
58.5m at 8.33 per cent HM from 58.5m, including 34.5m at 10.5 per cent HM from 60m;

THAC442
52.5m at 8.9 per cent HM from 36m, including 39m at 10.5 per cent HM from 39m;

THAC445
49.5m at 9.71 per cent HM from 63m, including 42m at 10.9 per cent HM from 69m.

One important aspect Sheffield took away from these results is that both the up-dip and down-dip drilling were able to extend mineralisation.

The results from the up-dip drilling indicated continuity of thick, shallow, high-grade mineralisation beyond the current resource envelope.

The down-dip drilling extended the mineralisation to the southwest while demonstrating strong continuity of mineralisation within part of the resource currently classified as Inferred.

Of greatest significance for the company is that these drilling results are outside the 32-year life-of-mine (LOM) optimised pit shell used in the April 2014 Scoping Study.

The company considers this to be a good indication potential exists to improve the project’s already impressive economics.

“The drilling returned the ideal result for us,” Sheffield Resources managing director Bruce McQuitty told The Resources Roadhouse.

“It was not only able to confirm the deposit extends both up-dip and down-dip and remains open, it also confirmed the discovery of additional high-grade mineralisation in the up-dip region.

“This is of particular significance because the Scoping Study delivered higher margins in early production years from this region.”

Work on the Thunderbird Pre-Feasibility Study is now well underway and on schedule to be finalised during Q1 2015.

Metallurgical testwork on a 15-tonne bulk sample has been carried out by Robbins Metallurgical using full-scale or scalable equipment in order to confirm process design.

Feed preparation, primary wet concentration, slimes settling and co-disposal tests, and concentrate upgrade stages have been completed, and mineral separation stages are proceeding.

Fifteen geotechnical investigation drill holes have been completed using sonic coring with the aim of providing sufficient geotechnical information for:

Pit slope stability analyses and pit design;

Assessment of the excavatability of mineralisation and waste; and

Mining and overburden equipment selection.

The test drilling program has been designed to evaluate ground conditions largely within an optimised initial four year pit shell.

Stage 1 of an infrastructure study has been completed, which investigated possible transport and product export options.

Stage 2 of this study is on-going and is focused on site infrastructure.

An initial investigation of power (site maximum demand), and annual energy consumption has been undertaken based on Scoping Study engineering and process flow diagrams.

Power supply options and potential service providers are also currently being investigated.

Three test production bores have been completed to a maximum 120m depth within, and adjacent to, the Thunderbird deposit.

Results of pump testing of these bores are anticipated to be available soon.

An airborne EM survey is also to be planned for Thunderbird to assist in aquifer modelling.

All the above activities, including physical test work from the metallurgical testwork program and an updated engineering design is expected to be completed during Q4 2014.

Apart from the work being undertaken at Thunderbird, Sheffield completed a diamond drill hole, RBDD004, to test a large, strong bedrock conductor ‘RBD1’ at the company’s Red Bull nickel-copper project.

The Red Bull project is within 20 kilometres of Sirius Resources’ (ASX:SIR) Nova nickel-copper deposit, in the Fraser Range region of WA.

Sheffield had identified the RBD1 from Moving and Fixed Loop Transient Electromagnetic (MLTEM & FLTEM) ground geophysical surveys.

RBDD004 was designed to intersect the modelled conductor plate at around 680m down-hole depth, however a 123m interval of mafic granulite with trace disseminated sulphides was intersected from 600m to 723m depth.

Sheffield explained that, although it could potentially be a favourable host lithology for magmatic nickel deposits, the low level of sulphides in this unit mean it is unlikely the drilling sourced the conductor.

The drilling ultimately encountered a 5m thick interval of graphitic and sulphidic schist from 728m depth.

Although is deeper than indicated by the model, Sheffield has interpreted this to be the most likely source of the conductor.

Sheffield remains confident in Red Bull’s potential and has commenced a down-hole EM survey with the aim of confirming the graphitic schist as the conductor source or to determine the existence of additional off-hole conductors.


Sheffield Resources Limited (ASX: SFX)
…The Short Story

HEAD OFFICE
Level 1, 57 Havelock Street
West Perth WA 6005

Ph: + 61 8 6424 8440
Fax:   +61 8 9321 1710

Email: info@sheffieldresources.com.au

Website: www.sheffieldresources.com.au

DIRECTORS and MANAGEMENT
Will Burbury, Bruce McQuitty, David Archer

MAJOR SHAREHOLDERS
Will Burbury            6.4%
Bruce McQuitty        6.4%
David Archer        6.4%

Kibaran leads graphite charge

THE INSIDE STORY: Resource-focused investors who keep a close eye on the daily announcements from the Australian Securities Exchange (ASX) cannot have ignored how often lately the commodity graphite rates a mention.

Many pundits consider the rise in graphite’s prominence to be merely a distraction to the focus market-watchers usually save for more mainstream commodities, gold or iron ore, whose fortunes have recently suffered.

The reality though, is that graphite’s rise in providence and reputation should come as no surprise.

The European Commission included graphite amongst 14 materials it considers to be high in both economic importance and supply risk, while the British Geological Survey listed graphite as one material most likely be in short supply globally.

A number of analysts are starting to appreciate the potential of graphite, guided by data suggesting future demand is most likely to be driven by new technologies, in particular lithium-ion batteries.

The lithium-ion battery market, for which graphite demand has grown from virtually zero five years ago to almost 100,000 tonnes per annum, now represents 20 per cent of the flake market and continues to grow at 20 per cent annually.

Kibaran Resources (ASX: KNL) is positioning itself to become a major player in the emerging graphite sector.

The company’s key project is its 100 per cent-owned Epanko graphite deposit, located within the broader Mahenge project area in Tanzania.

 

The project has a total JORC Mineral Resources Estimate of 22.7 million tonnes at 9.8 per cent total graphitic carbon (TGC) for 2.22 million tonnes of contained graphite.

Kibaran recently completed a Scoping Study at Epanko based on Indicated Mineral Resources of 12.8 million tonnes at 10 per cent TGC for 1,281,200 tonnes of contained graphite.

The results from the study concluded Epanko to be an economically robust graphite deposit capable of producing premium quality large flake graphite with no industrial limitations boasting an NPV of US$213 million with plenty of upside through both resource and planned production expansion.

A key to the project is the quality of the graphite concentrate – testwork indicates the production of low contaminant, ultra-high purity (99.98 per cent) large flake graphite suitable for all applications, including the production of the value added expanded and spherical forms, which should command a premium price.

To put this into perspective it is worth noting China, India and Canada are currently responsible for most of the world’s graphite mining and processing, with China producing the lion’s share of between 70 to 80 per cent; however China’s production comprises 70 per cent amorphous and lower-value, smaller flake graphite.

Having recently completed a Scoping Study, activities are now concentrated on moving to feasibility and then construction in early 2016.

Kibaran recently appointed GR Engineering Services to undertake a feasibility and project evaluation study.

“Our main focus, at present, is the Epanko deposit at the Mahenge project,” Kibaran Resources executive director Andrew Spinks told The Resources Roadhouse.

“The appointment of GR Engineering is important as it is a highly-reputable and recognised successful engineering firm with a significant track record of building mines in Africa.

“We have signed them up to do the Feasibility Study and, ideally, they will build the plants at Epanko and at Merelani and carry out all expansion works to come.

“Our strategy is to become the largest producer of graphite in Tanzania and be able to increase production when demand increases.

“We are now finalising the schedule for the Feasibility Study.

“It is likely we will have the mining lease for Epanko finalised in March 2015 and that should concur with the Feasibility Study.

“We are anticipating production at Epanko by early 2016, which is only 18 months away.”

Kibaran signed a binding off-take agreement in 2013 with a European graphite trader for Epanko graphite sales.

The deal meant Kibaran became the first ASX-listed company to sign a graphite off-take and the first company globally to sign a binding off-take for the European graphite market.

As things currently stand, the company remains the only one of its peers with such a deal in place.

“The validation of the potential of the Epanko graphite project is confirmed by having a binding offtake agreement in place,” Spinks said.

“Many of our peers proclaim to have Memorandums of Understanding in place for hundreds of thousands of tonnes – we have an actual binding offtake agreement.

“Our test work during the recent Scoping Study has shown – through flake size distribution and high-purity – that there is absolutely no limitation in our application, or concern regarding our product.

“That is supported by the binding offtake agreement.”

The company’s second project, Merelani-Arusha, is located adjacent to the previous producing Merelani graphite mine

Kibaran is currently in negotiation with the owners of the mine, TanzaniteOne Mining Limited, which is a wholly-owned subsidiary of AIM-listed Richland Resources and Tanzania’s State Mining Corporation (STAMICO) via their STAMICO-TML Joint Venture, with a view to combine the relevant companies’ assets by way of a JV and restarting graphite production.

Having one offtake agreement in place at Epanko, with a second likely to be struck at Merelani, places Kibaran in good stead, especially in a sector such as the industrial minerals markets.

“It is a challenging sector and it is not just about tonnes and grades – there is a lot more depth to it than that,” Spinks explained.

“We are looking – in enormous detail – at why we have an offtake agreement and nobody else has and we believe it comes down to a number of factors.

“One significant aspect is our flake size distribution – 50 per cent of our distribution is greater than 180 microns, but we also have very low fine material with 15 per cent being less than 75 microns.

“That makes us commercially viable and designates our product as being very much highly in demand.”

Kibaran is highly-motivated to bring Epanko through to production as soon as possible and it has the Board structure to attain that goal.

Spinks has had a 13 year association with Africa, during which time he co-founded Tanzgraphite Pty Ltd.

Non-executive chairman John Park was founder and executive director of TSX-listed SAMAX Gold, which developed and operated the Merelani graphite mine, which remains the largest historical producer of graphite in East Africa.

The company’s other executive director, Grant Pierce has held a number of management roles in Africa including time with Perseus Mining, Resolute Mining, Africo Resources, and with Barrick Gold in Tanzania.

“We have all the right ingredients in our view in terms of the management of the company,’ Spinks said.

“We recently restructured the Board and we now consider we really have the capacity to deliver the objective to become a major graphite producer with the management box expertly ticked.”

Kibaran Resources recently reached an agreement with the CSIRO through its part-owned subsidiary 3D Graphtech Industries to investigate research opportunities in the application of graphite and graphene inks in 3D printing and fused filament fabrication.

“We’ve just engaged with the CSIRO – and it is absolutely mind-boggling what research is being done in the emerging field of 3D printing,” Spinks said.

“We are focused on becoming a graphite producer, however we can’t overlook the possibility of becoming involved in some of these other aspects of the industry.”

Kibaran Resources Limited (ASX: KNL)
…The Short Story

HEAD OFFICE
388 Hay Street
Subiaco WA 6008

Ph: + 61 8 6380 1003
Fax: +61 8 6380 1026

Email: info@kibaranresources.com
Website: www.kibaranresources.com.au

DIRECTORS
John Park, Andrew Spinks, Grant Pierce

MAJOR SHAREHOLDERS
Strategic Resource Management     4.67%
UBS Nominees                4.19%
GP Securities                3.27%

SHARES ON ISSUE
120.3 million

MARKET CAPITALISATION

Approx. $33.7 million (at 25/9/14)

Gruyere maiden promises more to come

THE INSIDE STORY: When you want to stand out in a crowd of your peers it is always wise to make an announcement that will pull the maximum amount of focus in your direction.

That’s exactly what Perth-based gold exploration play Gold Road Resources (ASX: GOR) did at the 2014 Diggers & Dealers Forum in Kalgoorlie.

Gold Road sent a buzz around the conference floor by announcing it had finalised the Maiden JORC 2012 Mineral Resource estimate for the Gruyere deposit, located on the company’s Dorothy Hills Trend at Yamarna, Western Australia.

 

The Mineral Resource for Gruyere came in at 96.93 million tonnes at 1.23 grams per tonne gold for a total 3.84 million ounces of gold.

To put these numbers in perspective it is worth noting the last gold discovery of a similar size to be made in Australia was seven years ago, which was the Tropicana discovery of Independence Group (ASX: IGO)/Anglogold Ashanti (ASX: AGG) Joint Venture.

“Obviously we all know how that has grown since then,” Gold Road executive chairman Ian Murray told The Resources Roadhouse on a site visit before the conference.

“These big deposits are becoming rarer and rarer to discover – globally”.

“But, from a Gold Road perspective – we own approximately 5,000 square kilometres of the Yamarna Belt and the Gruyere deposit is only one target within one of the Gold Camp Targets on the Belt”.

“We believe there are a lot more of these discoveries of this scale to be found within our tenements so we just have to keep doing what we have been doing and find more of them.”

There are other numbers that make the maiden 3.84 million ounce resource at Gruyere an even more remarkable achievement.

The company’s exploration team – led by exploration manager Justin Osborne – completed the estimate in only 9.5 months from the initial discovery on 14 October 2013.

At approximately 400,000 ounces per month – or approximately 100,000 ounces per week, Gruyere has a discovery cost of around $7 million – or less than two dollars per ounce.

When this Maiden Mineral Resource is combined with those of the company’s Central Bore and Attila‐Alaric deposits, it increases the Yamarna Belt’s gold endowment to over five million ounces.

“We will continue with our efforts to grow the Gruyere Maiden Mineral Resource, to find additional gold mineralisation along the Dorothy Hills Trend and to test the other Gold Camp Targets within the Yamarna Tenements, with the aim of unlocking the full gold potential within the Yamarna Belt,” Murray declared.

Staying true-to-form, Gold Road wasted very little time after the Diggers & Dealers Conference to announce results from a program of Aircore drilling at the Toto prospect, just three kilometres south of the Maiden Gruyere Resource and along the same geological trend.

 

The Aircore program was designed to test for indications of bedrock gold mineralisation and systems below Interface Geochemical anomalies Gold Road had defined earlier this year.

It didn’t disappoint and subsequently identified three new bedrock targets: Toto 1, 2 and 3.

The targets have a combined six kilometres of strike extent, which the Company intends testing with a program of Reverse Circulation (RC) drilling scheduled to commence in October 2014.

Toto 1 measures 2.2 kilometres north to south and up to 200 metres wide with geological and geochemical similarities to the Gruyere deposit.

Toto 2 measures 500 metres from north to south and 300 metres east to west, and is associated with gold anomalism on the margins of a structurally complex ‘Ziggy’ Monzonite unit.

Toto 3 measures three kilometres north to south and up to 300 metres wide, and is associated with gold anomalism coincident with a discrete magnetic low feature parallel to the trace of the main Dorothy Hills Shear Zone.

“That the Aircore drilling was able to so quickly identify three bedrock targets at Toto, less than three kilometres south of the 3.84 million ounce Gruyere gold deposit, has provided us with even more encouragement in regards to what we are yet to learn about this Trend,” Murray said.

“We consider these results to be further evidence the Dorothy Hills Trend is a fertile gold system, with more discoveries possible within this untested area”.

It would be fair to say Gold Road has developed an uncanny ability with the drill bit.

A second RC program at the Minnie Hill South prospect on the South Yamarna Joint Venture with Sumitomo ‐ confirmed a previously encountered high‐grade gold discovery.

This program is fully funded by Sumitomo as part of its earn‐in commitment under the terms of the JV.

The JV carried out an initial RC program at Minnie Hill South in April 2014, comprising six drill holes, from which anomalous gold mineralisation was reported in five holes with a best intercept of 12 metres at 4.65g/t gold from 135 metres.

A follow-up program of 23 RC holes was conducted between June and July 2014, which was designed to intersect the mineralised structure along strike and down dip of the earlier high‐grade results.

This drilling subsequently returned anomalous gold mineralisation in 12 of the 23 drill holes.

The new RC holes intersected the same differentiated dolerite package and associated mineralised shear system that had been encountered by the original discovery holes.

This, Gold Road determined, was confirmation the gold mineralisation extends over an area approaching one kilometre in strike length.

“It doesn’t get much better than seeing the first prospect tested with RC drilling, within the first Gold Camp Target to be tested in the South Yamarna JV area, has defined gold mineralisation within a very prospective differentiated dolerite over nearly one kilometre of strike and a down dip extent of up to 250 metres,” Murray said.

“This bodes very well for further drill testing of this prospect and other prospects in the South Yamarna JV.”

Gold Road’s intention is to further define the stratigraphy of the dolerite package at Minnie Hill South utilising geochemical and petrological sampling.

This is anticipated to assist in the identification of the dolerite’s internal zonation and its control on mineralisation, which in turn will enable specific targeting of particular prospective units during future drilling campaigns.

Gold Road is now considering drilling a diamond drill hole designed to intersect the entire stratigraphic sequence and dolerite zonation.

This could be carried out in late 2014 to provide some drill core to assist the company with these studies.

Not wanting to let the drill bit cool down, Gold Road completed a program of Regional Interface Rotary Air Blast drilling, which identified large areas of coherent gold anomalism throughout the Riviera‐Smokebush Gold Camp Target.
The RAB drilling identified multiple areas with prospective gold geochemistry, highlighting anomalies with gold grades greater than 10ppb with coincident elevated levels of pathfinder elements such as arsenic, molybdenum and copper.

The four strongest anomalies covered large areas of one kilometre by two kilometres with peak gold values ranging from 30 to 190ppb.

“A first pass regional sampling program identifying further large coherent gold anomalies in a new, untested Gold Camp Target is extremely encouraging,” Murray said.

“We are confident this could very well lead to further exciting gold discoveries within the Sumitomo funded South Yamarna JV area.”


Gold Road Resources Limited (ASX: GOR)
…The Short Story


HEAD OFFICE

22 Altona Street
West Perth WA 6005

Ph: + 61 8 9200 1600
Fax: +61 8 9481 6405

Email: perth@goldroad.com.au
Website: www.goldroad.com.au

DIRECTORS
Ian Murray, Ziggy Lubieniecki, Russell Davis, Martin Pyle, Tim Netscher

MAJOR SHAREHOLDERS

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