THE CONFERENCE CALLER: If the quality of an exploration house’s assets is reflected by the calibre of its joint venture partners and investors, then Peel Mining (ASX: PEX) could well be sitting on something quite significant. By Mark Fraser

The Western Australian company with a New South Wales focus has attracted the attention of some pretty interesting names to its project portfolio – including the giant Japanese resources house Japan Oil, Gas and Metals Corporation (JOGMEC) and mid-tier base metals mining house CBH Resources, which was once listed on the ASX but is now owned by Japan’s Toho Zinc Company.

One of Australia’s largest domestically-own gold miners, St Barbara (ASX: SBM), also has a 13 per cent stake in the company, while another of its major shareholders (15%) is Hampton Hill Mining (ASX: HHM), whose chairman is none other than legendary WA geologist Joshua Pitt, the man who first identified the mineralised potential of the rich polymetallic Golden Grove mine in WA’s Mid West after discovering Gossan Hill back in the early 1970s.

Over the past seven years Peel has established three major project areas in the Cobar Basin.

At the moment it seems the most advanced is its wholly-owned Wagga Tank-Southern Lights high grade zinc-lead-silver system, where the company has established a maiden resource – using a 3.5 zinc equivalent cut off – of 3.8 million tonnes at 5.5 per cent zinc, 2.1 per cent lead, 75 grams per tonne silver, 0.27 per cent copper and 0.31g/t gold (or a 9.2% zinc equivalent).

Located around 150 kilometres south west of the mining hub of Cobar, Wagga Tank-Southern Lights, which remains open along strike and downdip, is hosted within volcanogenic massive sulfide (VMS) mineralisation and is currently undergoing a resource estimation update.

Once this is completed it is expected scoping and pre-feasibility due diligence will quickly kick in.

During the recent RIU Explorers Conference in Fremantle, Peel Mining managing director Rob Tyson said the new resource work would be more akin to, “what you see in the gold mining industry for open pit”.

“We are actually running it through a stope optimisation process to essentially give us a mining resource eventually,” he said.

“The drilling we’ve been doing had … two aims essentially – to increase the quality of the resource, so we are hoping for a significant jump in the amount of indicated resource classification for this next estimate, and we are also hoping to improve the scale of the system.

“And we’ve had a couple of exploration successes as part of our last drill program that we think will put us in good stead there.

“So we think this is going to turn into a classic sort of VMS setting. It’ll grow, so long as we keep the drill rig turning.”

Meanwhile, some 50 kilometresto the north east of Wagga Tank-Southern Lights is Mallee Bull, where past drilling has revealed high grade copper intercepts, including:

14.1 metres at 4.27 per cent copper, 51g/t silver and 0.25g/t gold from 262m;

11m at 9.02 per cent copper, 114g/t silver and 0.37g/t gold from 296m;

53m at 4.08 per cent copper, 42g/t silver and 0.22g/t gold from 470m;

69m at 3.48 per cent copper, 34g/t silver and 0.14g/t gold from 533m; and

84m at 4.42 per cent copper, 38g/t silver and 0.14g/t gold from 575m.

A 50:50 joint venture with CBH, which has already spent $12.8 million on the undertaking, Mallee Bull, currently enjoys a resource – using a 1% copper equivalent cut off – of 6.8 million tonnes at 1.8 per cent copper, 31g/t silver, 0.4g/t gold, 0.6 per cent lead and 0.6 per cent zinc (or a 2.6% copper equivalent).

During his RIU presentation, Tyson said Peel was in discussions with its JV partner regarding the project’s path forward following CBH’s recent decision to put its Endeavor base metals operation on care and maintenance after 37 years’ of more or less continual production.

“It (Mallee Bull) is really a significant copper system – it’s well defined already, but it is in need of a drill out,” he noted.

“Some of these intercepts are as good as you will see anywhere. In fact at the time they were reported they were amongst the best in the world.

“It seems a lot of people have forgotten about Mallee Bull – we certainly haven’t, and we’d like to get back in there, drill it out and then bring it to the scoping phase.”

Peel’s third major priority is the development of Wirlong, which sits around 75 km to the south east of Cobar and is currently half-owned by JOGMEC.

So far the Japanese resources house has spent $7.9 million helping evolve the ore body, where the rig has returned intercepts of:

9m at 3.29 per cent copper and 18g/t silver from 70m;

27m at 5.3 per cent copper and 23g/t silver from 286m;

31m at 3.19 per cent copper and 11g/t silver from 299m;

9m at 8 per cent copper, 17g/t silver and 0.21g/t gold from 616m; and

17m at 4.59 per cent copper and 8g/t silver from 738m.

Tyson said Wirlong was effectively a Cobar-style copper system, with the chalcopyrite-rich mineralisation defined from surface to 600m depth and open over a 500m strike length.

“We’ve just done some drilling and we’ve got some assays pending, and that drilling is designed to test a new structural model,” he explained.

“And I think the signs are very good – we now understand what controls the mineralisation, so we are looking to push that into a resource estimate in the June quarter.”

Although the Cobar region has a long and established mining history – having yielded some 2.5 million tonnes of copper, 4.8 million tonnes of zinc,2.8 million tonnes of lead, 4,000 tonnes of silver and 200 tonnes of gold over 150 years – Tyson firmly believes there is still further wealth to be found in this part of the world.

“Most of our ground holdings are in the southern part of the Cobar Basin and we believe that there’s heaps of upside,” he told RIU delegates.

“It was previously viewed as a mature exploration destination – our work has proven it’s anything but.”