Polemical Leader Both a Plus and Minus for Energy Sector

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THE CONFERENCE CALLER: It seems some ASX-listed junior hydrocarbon players with North American projects are – like the rest of the world – a little polarised when it comes to controversial US President Donald Trump. By Mark Fraser

During the recent RIU Good Oil Conference in Perth, Trump was both highly praised and slightly berated by separate presenters with onshore assets.

Coming to the Republican president’s defence was Eon NRG’s Jerry McGann, whose company is currently focusing on its Powder River Basin play in Wyoming, where earlier this year it picked up some “juicy acreage” involving land which had been “tied up with government ownership effectively for sometimes 30, 40 or more years”.

“You might have various views as you sit down there about president Trump and some of the things he does, but one of the things that he has done is mobilise some of his government agencies, and one of those is the Bureau of Land Management – the BLM,” he said.

“And they had tens of thousands, probably hundreds of thousands, of acres that were tied up – sometimes for 30 or 40 years … and this was just fallow ground that was never available for hydrocarbon exploration.

“Trump has really got those chaps off their chairs, and ladies, and they had a lease sale here last July in the Powder River. This particular sale in the Powder River raised US$220 million.

“And what happens in these lease sales – it’s a lot of fun.

“A new lease package comes up every eight minutes, you bid online, and we have basically two technical guys in the office in Denver, and they are competing with big groups – sometimes 20 or 30 people – in other places on their computers bidding against us.”

McGann told RIU delegates under the terms of the Powder River deal Eon ERG had ended up paying just US$12/acre, was required to pay a 12.5 per cent royalty, and now held the land for 10 years with “no obligation for drilling or anything else”.

During the closing moments of his presentation, however, Samson Oil & Gas chief executive Terry Barr wasn’t so complimentary of the US president, suggesting Trump had to take some of the blame for the oil price’s volatility while commenting on his company’s hedge book.

Samson currently has an 87 per cent operated average working interest in the Foreman Butte project in North Dakota.

“Our hedges, and I guess this is an unfortunate part of the oil business, everyone likes to have a high oil price,” Barr said.

“But basically, our lender wanted to be hedged, and so our hedge book is currently valued at $2.7 million.

“It goes up and down, obviously, with the oil price every day – it was, I think, $2.1 million yesterday, so it’s all over the place.

“And I’ve never seen volatility like we have experienced … it’s quite disheartening, I think, to see (when) our beloved president comes out with some statement and the price goes down five dollars, and he comes out with another one and it goes up five dollars.

“So, it’s fairly hard to predict that in your planning.”

 

 

Unconventional Resources to Restore Balance

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THE CONFERENCE CALLER: Australia’s south-eastern energy market is facing a gas shortage which is almost at crisis point – and liquefied natural gas (LNG) producers will not be able to meet long term demand at attractive prices post-2020. By Mark Fraser

This grim prediction was made by RISC’s Joe Collins during the recent RIU Good Oil Conference in Perth, where he said energy uncertainty – particularly in Victoria and New South Wales – was partly being driven by electricity transition and government failure to adjust policy settings that would “allow more supply to come into the market”.

However, it was not all bad news according to Collins, who maintained there was not a shortage of gas on the east coast, but rather a shortfall of developed gas.

In fact, he noted, there was a “massive amount” of gas available to the markets in the form of unconventional resources.

“We’ve seen what happened in Queensland with the CSG (coal seam gas) boom – the massive amount of gas that they are now producing from a very modest total previously,” Collins said.

“The potential exists for them to do that in other basins across eastern Australia. They just need to prioritise the investment, prioritise the exploration and get after that gas.

“I wouldn’t over-invest on LNG import capacity given what we know of what happened in the United States, where they over-invested in LNG import capacity, and the high prices that were in place there just stimulated a supply-side response from the unconventional gas guys.

“The same thing could happen in eastern Australia. I’m not saying that it will happen, but it could happen.”

In Western Australia, however, it was a different story as oversupply and a lack of new demand were keeping gas prices down.

Collins said the reservation policy of the state’s DomGas Alliance – a member-driven industry body representing natural gas users, infrastructure investors and producers – was also impacting the supply side.

Furthermore, recent exploration success in WA, such as the Waitsia gas discovery in the Perth Basin, was contributing to this situation.

“So really, we’re waiting for some new projects to come to the market on the demand side in Western Australia, whether they be petrochemical-type projects or new gas-to-power projects for big mines or things of that nature,” he said.

“We really think that the picture is of continued oversupply going forward – it’s highly unlikely that the market will swing to undersupply … probably as long as five to 10 years, almost, and that should keep prices low for the foreseeable future as well.”

 

 

Moho Resources Confirms Strong Gold Anomaly at Burracoppin

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THE DRILL SERGEANT: Moho Resources (ASX: MOH) was eager to announce completion of a maiden auger drilling program at the Crossroads prospect within the company’s Burracoppin gold project in Western Australia.

Moho Resources’ recent auger exploration program consisted 814 shallow auger holes to test aeromagnetic and gravity targets plus gold in soil anomalies within E70/4688.

The program focused on a number of exploration targets which the company had previously identified within the Tampia Structural Corridor of the Southwestern Terrane and located approximately 22 kilometres from Ramelius’ Edna May gold mine near Westonia.

Moho has received results from the first 380 samples at the Crossroads prospect, demonstrating >25ppb gold anomalies and a number of >100ppb gold anomalies within E70/4688.

A broader gold anomaly was also identified at the >8ppb level measuring approximately 1.4 kilometres east to west by 0.7km north to south that remains open to the north, west and east.

A partly coincident, high contrast arsenic anomaly peaks between 16 to 61ppm arsenic over a grid background level of 1-4ppm arsenic at the west, east and northern ends of the >25ppb gold anomaly.

Moho indicated it is proposing to undertake follow up auger sampling to the north, east and west of the currently defined >8ppb gold anomaly.

“Identification of such a strong gold in soil anomaly in first pass auger drilling is a great result for Moho and our exploration team and confirms the company’s initial assessment of the gold prospectivity of the Burracoppin project, Moho Resources managing director Shane Sadlier said in the company’s announcement to the Australian Securities Exchange.

“Coincidence of arsenic with the gold anomalism is very encouraging.”

 

Email: admin@mohoresources.com.au

 

Web: www.mohoresources.com.au

 

Galileo Mining Scores First-up Subzero Zinc and Copper Hits

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THE DRILL SERGEANT: Galileo Mining (ASX: GAL) was excited to announce the results from the first drilling program at the company’s Subzero prospect near Norseman in Western Australia.

Galileo Mining drilled six Reverse Circulation (RC) at the Subzero prospect, constituting the first drilling program focussed on testing beneath a zone of outcrop with anomalous surface copper assays.

Three holes (NRC241 to 243) were drilled on the same section to provide an understanding of the geometry and potential for mineralisation.

A further three holes (NRC244 to 246) were drilled beneath the outcrop 25 metres north and south of the drill section.

Galileo declared the drilling had intersected highly anomalous zinc and copper in all six drill holes, including:

NRC243
29 metres at 0.49 per cent zinc from 119m, including 10m at 0.14 per cent copper, 0.37 per cent zinc and 1.9 grams per tonne silver from 137m;

NRC241
16m at 0.41 per cent zinc from surface, including 8m at 0.15 per cent copper, 0.62 per cent zinc and 3g/t silver from 8m; and

NRC242
14m at 0.22 per cent zinc from 26m and 16m at 0.28 per cent zinc from 42m.

The company said gold and copper assays suggest potential for VMS mineralisation from:

NRC241
6m at 0.1g/t gold, 1.9g/t silver and 0.12 per cent copper from 34m; and

NRC242
5m at 0.1g/t gold, 1.9g/t silver and 0.14 per cent copper from 76m.

“This first round of drilling at the Subzero prospect has demonstrated the rocks are mineralised with highly anomalous values of copper, zinc and gold,” Galileo Mining managing director Brad Underwood said in the company’s announcement to the Australian Securities Exchange.

“It appears that the mineralisation is related to a large-scale volcanic system with potential for an economic VMS style deposit.

“Importantly, our extensive conductive target has been shown to be related to sulphides containing copper and zinc.

“With over two kilometres of untested strike length we also have a large number of additional targets ready for our next phase of drilling to commence in November.”

 

 

Email: info@galmining.com.au

 

Web: www.galmining.com.au

 

Pioneer Resources Completes Initial Drilling Cade Spodumene Deposit

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THE DRILL SERGEANT: Pioneer Resources (ASX: PIO) completed its inaugural drilling program, targeting lithium mineral spodumene, hosted in lithium-caesium-tantalum (LCT) pegmatite rocks, at the company’s 100 per cent-owned Pioneer Dome North group of prospects in Western Australia.

Pioneer Resources explained that all drill samples of intersected pegmatite are now in the laboratory for analysis, the results for which are expected by the end of next week.

The company reported earlier this year that spodumene-bearing LCT pegmatites had been discovered by its geologists at two locations within the Dome North Area who recorded spodumene mineralisation intersected beneath the discovery outcrops.

The recent drilling consisted 29 reverse circulation (RC) drill holes completed at the initial two targets, 21 of which intersected pegmatite.

The program was subdivided into two drill areas:

The Cade deposit (previously Spodumene Target 2) was tested with 24 holes with 14 intersecting the tabular pegmatite dyke, which, horizontally, is approximately 800m long, with a maximum thickness of 35m, extending down plunge to at least 311m.

Two holes intersected a separate, previously unrecognised pegmatite (Spod3) to the northeast of the Cade Pegmatite.

Five holes were completed at Spodumene Target 1, all of which intersected pegmatite, with a maximum thickness to date of 15m.

“The inaugural drilling program at Dome North has been an unqualified success, identifying the presence of multiple spodumene-bearing pegmatite dykes,” Pioneer Resources managing director David Crook said in the company’s announcement to the Australian Securities Exchange.

“This provides the basis for an intensive exploration program to delineate what we hope will be a substantial group of deposits.

“With the proceeds from the sale of Sinclair pollucite, the company is well funded to advance the project.”

 

 

Web: www.pioresources.com.au

 

Peel Mining Hits New Intercepts Within Wagga Tank Corridor Zone

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THE DRILL SERGEANT: Peel Mining (ASX: PEX) informed the market of drilling results from the Corridor Zone, located between the Wagga Tank and Southern Nights deposits on the company’s 100 per cent-owned Wagga Tank project, south of Cobar in western New South Wales.

Peel Mining’s recent efforts involve the completion of drillholes WTRCDD141 and WTRCDD141W1 that were designed to follow-up drillhole WTRCDD123, which had encountered a massive sulphide mineralised intercept.

The company said that geological logging and portable XRF analyses had confirmed zones of variable pyritesphalerite-galena rich sulphides comprising massive, semi-massive and breccia/stringer style mineralisation.

WTRCDD141 intersected zinc-lead rich mineralisation from around 554 metres to around 594m downhole, including several zones of strong massive zinc-lead rich mineralisation.

WTRCDD141W1 intersected zinc-lead rich mineralisation from approximately 505m to around 508m downhole, and from near 580m to about 619m downhole, including several zones of strong massive zinc-lead rich mineralisation.

“The intersections in WTRCDD123, WTRCD141 and WTRCD141W1 are considered highly important as they provide further support that the Wagga Tank and Southern Nights deposits are interconnected, and like other significant Volcanogenic Massive Sulphide deposits, mineralisation is likely to cluster and stack in multiple lenses,” Peel Mining said in its ASX announcement.

“Whilst the geometry of the mineralised zones remains complex, it is believed that mineralisation is likely to be sub-vertical/steeply dipping to the west and therefore the true width on the above intercepts would be around 40 to 50 per cent of the downhole widths.”

Peel Mining released a maiden Indicated and Inferred Mineral Resource Estimate (MRE) for Wagga Tank-Southern Nights in July 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 9.2 per cent zinc equivalent.

 

Email: info@peelmining.com.au

Web: www.peelmining.com.au

 

Black Cat Syndicate Identifies New Lode at Trump North

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THE DRILL SERGEANT: Black Cat Syndicate (ASX BC8) has set a cracking pace in terms of drilling activity at the company’s Bulong gold project in Western Australia.

Black Cat Syndicate released results from its recent drilling activity that included the intersection of a new Lode at the Trump North target.

The company said the intersection of the new lode at Trump North, 300 metres north of Trump, had confirmed the Trump Corridor extends over 1,100m.

Results include:

19TRRC025
4 metres at 13.46 grams per tonne gold from 50m – Trump North;

19TRRC022
5m at 2g/t gold from 72m – Trump North; and

19TRRC026
2m at 10.14g/t gold from 64m – Trump.

Other activities included extensional drilling at the Myhree and Boundary targets, which the company said had also confirmed continuous mineralisation along that particular 1,650m corridor which remains untested beyond the drilled extents.

New results include:

19MYRC080
6m at 7.58g/t gold from 268m – Myhree;

19MYRC081
3m at 2.96g/t gold from 266m – Myhree;

19BORC049
1m at 26g/t gold from 92m – SAM Target 2;

19BORC041
5m at 3.35g/t gold from 53m – Boundary; and

19BORC048
2m at 5.47g/t gold from 138m – SAM Target 1.

Black Cat indicated it now has Resource upgrades underway for both Trump and Boundary with results to be reported later in September 2019.

Additional Sub-Audio Magnetics (SAM) surveys to extend the Myhree-Boundary corridor two kilometres north and 1.5km south are underway, with field work complete and processing in progress.

Feasibility studies have commenced at the Myhree deposit with metallurgical testwork and geotechnical studies in progress.

Exploration RC drilling of targets in the Greater Woodline area will commence in early October 2019.

“We are continuing to infill and extend the known Resources at Bulong which will add to our current feasibility studies,” Black Cat Syndicate managing director Gareth Solly said in the company’s announcement to the Australian Securities Exchange.

“The deeper strike extensions at Myhree provide further confidence in the Resource that is the focus of the feasibility study.

“Using the results of SAM surveys, it is exciting to find new lodes close to our potential mining operations.

“Results at Trump North show that the western most of the three mineralised corridors continues to the north with excellent potential to add to future Resources.

“We expect the results of an additional 3.5 kilometres of SAM surveys along these corridors to also highlight additional targets.

“Following completion of a recent SAM survey, drilling of numerous high priority targets will commence at Greater Woodline in October 2019.

“Greater Woodline remains under-explored and a significant opportunity for Black Cat.”

 

Email: admin@blackcatsyndicate.com.au

Web: www.balckcatsyndicate.com.au

 

Australian Oil and Gas Market Enjoying a Run in the Sun

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THE CONFERENCE CALLER: The Resources Roadhouse was fortunate enough to score some time to hear about the state of the domestic and international oil and gas markets.

After he opened the conference we sat down for a quick chat with Argonaut director of research Micheal Eidne.

 

Horizon Minerals Plays Tenement Swapsies with Northern Star

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THE BOURSE WHISPERER: Horizon Minerals (ASX: HRZ) announced an agreement with Northern Star Resources (ASX: NST) to swap tenements exchange in the Western Australia Goldfields for nil cash consideration.

Horizon Minerals said the transaction involves the company divesting its 100 per cent-interest in the Anthill, Blister Dam, New Mexico, White Flag and Kanowna North tenements in return for 100 per cent-interest in Northern Star’s Rosehill, Brilliant North and Gunga West projects in Coolgardie and the Golden Ridge, Balagundi, Abattoir and Mt Monger projects in Kalgoorlie.

“This is a sensible transaction between Horizon and Northern Star that place assets within each company’s areas of interest,” Horizon Minerals managing director Jon Price said in the company’s announcement to the Australian Securities Exchange.

“For Horizon, it adds contiguous tenure to the Boorara gold project area in Kalgoorlie and additional strategic assets in Coolgardie including the Rose Hill – Brilliant North tenements which give us the ability to unlock the full value of the Coolgardie gold project as we continue to progress formal binding documentation and required approvals for the potential acquisition.”

Horizon expects the tenement exchange agreement to be completed in the December Quarter 2019 and contains conditions precedent, warranties and representations and other clauses that are standard for transactions of this nature including provision of signed transfers, all mining information and any statutory consents required.

 

 

Email: info@horizonminerals.com.au

Web: www.horizonminerals.com.au

 

Triangle Energy Making Headway at Cliff Head Project in the Perth Basin

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THE CONFERENCE CALLER: The Resources Roadhouse managed to grab a moent of Triangle Energy managing direor Rob Towner’s valuable time at the 2019 RIU Good Oil Conference.

During the June 2019 quarter, Cliff Head generated revenues of $6.89 million.

This was an increase of $760,000 from the previous quarter.