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

Van Eck    6%
Minco     7%

Rox readies to fire at Musket and Cannonball

THE INSIDE STORY: A good deal of recent commodity market commentary has held a particular fondness for the future prospects, both short and long-term, in relation to the prices of nickel and zinc.

There are, at present, a healthy number of nickel/zinc exploration plays hitting the radar screens of these well-informed analysts and among these is ASX-listed junior Rox Resources (ASX: RXL).

The company believes it is well placed to take advantage of any price increases in both these commodities, especially nickel.

Rox Resources recently announced a maiden Mineral Resource estimate for the Musket nickel sulphide deposit, which has substantially increased the company’s Fisher East nickel sulphide project mineral resource inventory by over 100 per cent.

The Musket mineral resource estimate comprises 2.1 million tonnes at 1.8 per cent nickel containing 37,500 tonnes of contained nickel.

Of particular note is 64 per cent of the Musket resource estimate is in the Indicated Mineral Resource category, using a one per cent nickel lower cut-off.

At a higher cut-off grade of 2.5 per cent nickel the Mineral Resource contains 10,100 tonnes of nickel with approximately 75 per cent Indicated.

The resource at this higher cut-off grade is 100,000 tonnes at 10.1 per cent nickel.

Total Fisher East project resources (Musket + Camelwood) now stand at 3.6 million tonnes at 2 per cent nickel containing 72,100 tonnes of contained nickel.

Indicated resources account for 52 per cent of the total resource.

 

“This maiden resource estimate for Musket is very important for us as it displays the continued prospectivity of the Fisher East nickel sulphide belt,” Rox Resources managing director Ian Mulholland told The Resources Roadhouse.

“It has taken the overall project resources to over 72,000 tonnes of contained nickel at a grade of two per cent nickel.”

An important aspect of the Musket deposit is that it contains a very-high grade core of approximately 100,000 tonnes grading 10.1 per cent nickel.

This lies close to surface and Rox has identified it to be an obvious economic driver for any planned future development.

“Having such a high percentage of the resource in the Indicated category demonstrates how good the continuity of the mineralisation is,” Mulholland said.

“We have previously said that deposits of similar style to Camelwood don’t usually occur in isolation, and we proved that by discovering Musket.”

Rox is confident in its ground position, which it considers to be very strong with the potential to discover a lot more nickel and continue to significantly grow the project resource base.

With a discovery cost so far of around 4.2 cents per pound of nickel, which is one of the lowest in the world, that confidence seems to be very well placed.

The Mt Fisher gold-nickel project is located 500 kilometres north of Kalgoorlie and covers an area of 658 square kilometres, 488sqkm of which is 100 percent-owned by Rox with the company holding an option to purchase 100 percent of the remaining 170sqkm.

Rox’s original target at Mt Fisher was gold, however its focus shifted after its discovery of nickel sulphides at the Camelwood deposit in December 2012 proved too significant to ignore.

“Our main focus in on the Fisher East nickel project, which is really all about trying to define a big enough resource to start thinking about developing a mining operation there,” Mulholland told The Roadhouse earlier this year.

“We only discovered the nickel just over 18 months ago, and the first thing we did was complete the drilling that allowed us to define the mineral resource of about 35,000 tonnes of contained nickel.

“Our focus now is on increasing the amount of contained nickel at the project.

“The grade is there, we have already established that, but it is important now to establish 100,000 tonnes of contained nickel to enable us to develop this project into a mine with a ten year mine life producing 10,000 tonnes of nickel per year.

“That would entrench us firmly in the top five nickel sulphide producers in Australia, placing us aside companies such as BHP Billiton, Western Areas, Independence Group and Panoramic.”

Rox recently completed a program of aircore drilling at Mt Fisher, which identified three new nickel sulphide target zones.

The aircore drilling consisted 138 holes for 8,083 metres and was carried out in order to explore numerous nickel sulphide targets the company had interpreted from airborne magnetics and electro-magnetics.

“We believe these three new high-priority targets hold great potential to deliver further nickel sulphide mineralisation,” Mulholland said.

The first of the new targets is known as Cutlass and is located is along strike four to six kilometres to the south of the Camelwood and Musket deposits.

 

The other two – known as Jim’s and Fisher South – are located further west on what Rox thinks could be a possibly dislocated portion of the Mt Fisher ultramafic belt.

Results from Cutlass included:

FEAC235:
6m at 0.18 per cent nickel, 181ppm copper, 20 ppb platinum and palladium from 56m;

FEAC240:
12m at 0.30 per cent nickel, 147ppm copper, 20 ppb platinum and palladium from 32m, including 1m at 0.51 per cent nickel, 330ppm copper, 24ppb platinum and palladium;

FEAC262:
4m at 0.31 per cent nickel, 53ppm copper from 91m.

Further drilling was carried out at Red Mulga, which confirmed additional anomalous nickel over a strike length of 600m, with results including:

FEAC219:
17m at 0.35 per cent nickel, 67 ppm copper, 34 ppb platinum and palladium from 24m;

FEAC241:
32m at 0.26 per cent nickel, 36 ppm copper from 24m;

FEAC202:
16m at 0.22 per cent nickel, 51 ppm copper from 16m.

Drilling at the Jim’s prospect comprised 13 holes for 804m.

Best results included:

MFAC074:
10m at 0.26 per cent nickel, 265 ppm copper, 9ppb platinum and palladium from 32m;

MFAC067:
4m at 0.20 per cent nickel, 527 ppm copper, 16 ppb platinum and palladium from 32m; and

MFAC073:
4m at 0.21 per cent nickel, 575 ppm copper, 28 ppb platinum and palladium from 32m.

Drilling at third new prospect, Fisher South entailed 26 holes for 560m, with best results including:

MFAC092:
2m at 0.20 per cent nickel, 139 ppm copper, 3 ppb platinum and palladium from 26m; and

MFAC084:
20m at 0.12 per cent nickel, 504 ppm copper, 18 ppb platinum and palladium from 22m

“Being able to identify these three new targets is very exciting,” Mulholland continued.

“The excitement stems from each anomaly possessing values similar to the aircore values we encountered to define Musket and Camelwood.”

Rox has declared its hand in regards to its intentions with Cutlass, Jim’s and Fisher South with a ground electro-magnetic survey to be undertaken to better define the targets at each prospect prior to RC drilling.

The Cutlass, Red Mulga and Fisher South prospects are located on tenements that are 100 per cent-owned by Rox while the Jim’s prospect lies on an Option to Purchase tenement.

Rox is now in the planning stages for a ground electro-magnetic survey to better define the anomalies before RC drilling.

The company anticipates both will be undertaken as soon as possible.

Rox Resources Limited (ASX: RXL)
…The Short Story

HEAD OFFICE
Level 1, 30 Richardson Street
West Perth WA 6005

Ph: +61 8 9226 0044
Fax: +61 8 9322 6254

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

DIRECTORS
Jeff Gresham, Ian Mulholland, Brett Dickson

MAJOR SHAREHOLDERS
Drake Private Investments    3.8%
Rox Directors        3%

SHARES ON ISSUE
Approx. 745 million

MARKET CAPITALISATION
Approx. $39.5 million (at 11/9/14)

Laconia’s Peruvian exploration continues to deliver

THE INSIDE STORY: Anybody suggesting a decline in mineral exploration activities by junior companies should be careful not to do so near the offices of Laconia Resources (ASX: LCR).

Recent data from the Australian Bureau of Statistics has shown a decline in the exploration efforts of the junior sector.

However the ABS also said, “The largest contributor to the fall in the trend estimate this quarter was Western Australia.”

Laconia’s major focus is its Kimsa Orcco project in Peru, which is the amalgamation of Laconia’s 100 per cent-owned Rasuhuilca project and the Huaco Cucho project, over which it has an option to earn an 80 per cent indirect interest.

The project consists of two large areas of alteration zones, which Laconia has identified as the Northern Kimsa Orcco prospects and the Southern Kimsa Orcco prospects.

 

All of Laconia’s Patacancha permits plus the 80 per cent Earn In Option Huaco Cucho permits No 1, No 2 encompass the Southern Kimsa Orcco prospects.

The balance of the 80 per cent Earn In Option Huaco Cucho permits surround the Northern Kimsa Orcco prospects.

The project currently has an Inferred Mineral Resource estimate of 360,000 tonne at 1.97 grams per tonne gold and 179g/t silver at a 2.5g/t gold-equivalent cut-off.

Laconia has recently announced a non-renounceable entitlement rights issue to raise approximately $1.7 million.

The company indicated it intends to do what the ABS claims its WA-focused peers are reluctant to do, which is to use the proceeds of the raising for exploration drilling and on-going exploration of the Kimsa Orcco copper-gold-silver project.

“We are not exploring in the Fraser Range of WA, which at present does make us reasonably unfashionable, however we are sitting on top of a highly-mineralised system,” Laconia Resources managing director Ian Stuart told The Resources Roadhouse.

“We know we are because of the consistently high-grade results we are generating from the review work we are conducting.

“To put that fashion into context, it is only unfashionable to those who aren’t interested in investing beyond local sentiment.

“The only exploration ground BHP Billiton currently has left is in the Central Andes, and Laconia is pleased to be as unfashionable as one of the world’s largest mining houses. That’s why we are in Peru.

“The country has a history for producing large copper-gold-silver systems, and we believe we could possibly looking at the next one.”

Laconia has been busy all over the Kimsa Orcco project this year producing a steady flow of news from all corners of the tenements.

The company collected surface channel samples at the Española 1 and Fortuna prospects, located within the southern portion of the project, in April this year, which confirmed historic high-grade copper-gold-silver mineralisation hosted by enargite-quartz-pyrite veins and breccias.

 

The channel sampling followed the compilation of a database of results from surface and adit sampling by previous companies, such as Cominco Peru SA and Buenaventura Ingenieros SAC.

The historic results highlighted the prospectivity throughout the Southern Kimsa Orcco prospects for copper-gold-silver mineralisation.

Channel sampling of surface outcrops by Laconia at the Española 1 and Fortuna prospects returned grades that validated those in the existing dataset.

Surface sample results at Española 1 prospect include:

0.87 metres at 8.12% copper, 4.96 grams per tonne gold, and 142g/t silver;

0.83m at 7.07% copper, 7.12g/t gold, and 80g/t silver;

0.85m at 2.38% copper, 2.43 g/t gold, and 63 g/t silver; and

0.52 m at 1.88% copper, 7.02g/t gold, and 94g/t silver.

Surface sample results at Fortuna prospect include:

1m at 8.19% copper, 4.43g/t gold, and 338g/t silver; and

1m at 3.63% copper, 0.98g/t gold, and 257g/t silver.

Further review of historic surface channel sampling of mineralised breccias and additional gold-silver vein systems east of Española 1 prospect concentrated on three different mineralised structures sampled during previous explorer, Buenaventura’s 1999 field campaign.

These included:

The Pebble Dyke, a breccia zone that can be traced for 500m from the Española adit with minimal sampling.

The Pebble Vein, a 700m system of gold-silver veining along the ridge line above the Española 1 prospect; and

Breccia 18, a poly-metallic, hydrothermal breccia at the intersection of the Pebble Vein and the Pebble Dyke.

The Breccia 18 samples are notable for the high content of base metal mineralisation (in particular lead hosted in the mineral galena) and outstanding gold and silver values.

There are additional breccias nearby that require priority sampling based on these results.

The Pebble Dyke, Breccia 18 and Pebble Vein prospects lie within Laconia’s 100%-owned tenement, Patacancha 3.

“The identification of this intensely mineralised gold-silver-copper-lead-tellurium breccia is very exciting,” Stuart said.

“Hydrothermal breccias are often associated with the intrusive process of porphyry copper bodies, and are typically situated on the margins of porphyry systems.

“The presence of these breccias further support Laconia’s view a large porphyry system exists at the Kimsa Orcco project.”

Laconia identified parallel vein sets at Barita, which it incorporated with new sampling results from Fortuna and Española 1 into a near-surface model of mineralisation at the Favi Vent Zone.

So far this has identified over 850m strike of high-grade copper-gold-silver veining, which Laconia considers to open many possibilities for future development of the project, including open cut potential.

“Being able to identify the presence of such high-grade copper and precious metals is particularly pleasing,” Stuart said.

“The scale and high-grade near surface mineralisation within the expanding Favi Zone bodes well for a stand-alone deposit in its own right.”


Laconia Resources Limited (ASX: LCR)
…The Short Story

HEAD OFFICE
Suite 2, Level 1, 47 Havelock Street
West Perth WA 6005

Ph:  +61 8 9486 1599
Fax: +61 8 9486 7899

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

DIRECTORS
Matthew Howison – Chairman
Ian Stuart – Managing Director
Matthew Edmondson – Non-Executive Director

MAJOR SHAREHOLDERS
Josephine Patoir             4.3%
Slade Technologies Pty Ltd    4.3%
Ian Stuart                            2.9%

SHARES ON ISSUE
483.7 million

MARKET CAPITALISATION
$2.9 million (at 4/9/14)

Gold, Gruyere and Toto

THE INSIDE STORY: For those unfamiliar with the journey of emerging gold miner Gold Road Resources (ASX: GOR) it is worth taking a quick look back at how the company has reached its current value.

Gold Road owns a healthy percentage of the Yamarna greenstone Belt, covering approximately 5,000 square kilometres of the Yilgarn Craton, located 150 kilometres east of Laverton in Western Australia.

 

The company has always considered the Yilgarn Craton to be the region most likely to become Australia’s next major gold region.

Its confidence in the region was heartened in 2010 when a report by Geological Survey of Western Australia found geology of the north eastern Yilgarn Craton – especially the Yamarna Terrane – to be similar in age and character to the Kalgoorlie Terrane.

There’s really no need to dwell on the success of Kalgoorlie as a gold producing region, except to acknowledge past gold production from the Kalgoorlie greenstone belt exceeds one hundred million ounces and continues to deliver new discoveries 130 years after its initial discovery.

Gold Road wasted little time in getting down to business at Yamarna and quickly established a JORC Mineral Resource of over 1.3 million ounces gold that subsequent studies demonstrated could be mined economically.

The company identified a pipeline of more than 100 gold prospects encountering grades up to 2,500 grams per tonne gold.

From this, six high-priority Gold Camp Targets were earmarked for prioritised exploration.

Drill testing of the first two of these Gold Camp Targets in late 2013 has resulted in four new discoveries.

In early 2013 Gold Road had entered an exploration joint venture with Sumitomo Metal Mining Oceania (a subsidiary of Sumitomo Metal Mining Co. Limited), in which Sumitomo Metal Mining can earn up to 50 per cent interest in Gold Road’s South Yamarna tenements, approximately 2,900 square kilometres.

The first Gold Camp Target Gold Road drilled tested in 2013 was the South Dorothy Hills Trend which yielded the YAM14 and the recent Gruyere gold discoveries.

The Gruyere discovery is situated some 25 kilometres north-east of the more advanced Central Bore project, and exhibits two different mineralisation styles not seen before in the Yamarna Belt.

Gold Road considers, that the results it has achieved so far at Central Bore and Gruyere confirms the potential for the Dorothy Hills Trend to host further substantial gold deposits.

It could be said the company has been almost solely responsible for keeping the resource drilling sector alive with up to seven drill rigs operating at any given time, providing a constant flow of drilling results encountering a succession of high-grade gold intersections.

 

Recent drilling identified a 3km long and up to 1.2km wide geochemical gold anomaly grading over 10ppb gold between the Gruyere deposit and the YAM14 prospect that is coincident with the Toto prospect area.

The anomaly sits along the trend of the Dorothy Hills Shear Zone, which hosts the Gruyere deposit that is only 2km north.

Internal to the greater anomalous zone are three parallel north‐south zones at greater than 15ppb gold of equivalent dimensions and gold intensity to the initial Gruyere discovery, which was identified using the same Interface RAB techniques.

“We have taken a great deal of confidence from the identification of this anomalism,” Gold Road Resources executive chairman Ian Murray told The Resources Roadhouse.

“It was identified during an Interface RAB program we recently carried out at the Toto prospect and it appears to be larger than both the original anomalies over Gruyere and YAM14.”

Although Toto has generated a great deal of excitement Gold Road has maintained a strong focus on working Gruyere up with the aim of announcing a maiden Mineral Resource estimate in the upcoming September quarter.

The company recently completed three deep diamond holes along strike of the deposit, which were successful in determining a south plunging orientation to the higher grade mineralisation located along the central/eastern zone of the Gruyere Tonalite.

“The holes did achieve what we had designed them to,” Murray said.

“That was to test the continuity of mineralisation along the strike of the deposit and to determine potential for deep extensions down plunge of the higher grade mineralisation we had previously identified between the North Zone of the deposit and the previous deepest intercept.”

“The exceptional grade continuity and scale of the Gruyere deposit continues to be demonstrated.”

Total mineralised intersections in these most recent diamond drill holes include:

14GYDD0012A
243.3 metres at 1.2g/t gold from 45m;

14GYDD0012B
302m at 1.31g/t gold from 139m; and

14GYDD0013B
339.9m at 1.54g/t gold from 135.1m.

All holes ended in mineralisation.

“The continued expansion of the Gruyere deposit and the recent discovery of the Toto geochemical anomaly nearby have strengthened our belief in the large potential gold endowment of the South Dorothy Hills Trend,” Murray continued.

“We look forward to releasing the Gruyere deposit maiden Mineral Resource Estimate.

“We also can’t wait to get in and drill test the new Toto anomaly.”

In order to gain a deeper understanding of the hardness and competency of the different ore types present in the Gruyere deposit, Gold Road carried out a comminution test program earlier this year.

Approximate 500 kilograms of selected drill core samples from Gruyere, including samples of whole drill core representative of Oxide, Transitional and Fresh ore types underwent Unconfined Compressive Strength (UCS) determinations.

While this was happening samples of drill core representative of Saprock, Transitional and Fresh ore types underwent a comprehensive comminution test program consisting of:

Bond Abrasion Index determination;

SAG Mill Comminution Test, including SG determination;

Bond Rod Mill Work Index determination; and

Bond Ball Mill Work Index determination.

The test results demonstrated the Gruyere mineralisation host rock (Gruyere Tonalite) possesses rock properties that are amenable to conventional crushing and grinding circuits with no considered major risk or flaws.

This was just the results Gold Road was hoping for and armed the company with further confidence to progress to a Scoping Study.

“These results confirmed our understanding of the likely behaviour of the Gruyere mineralisation under processing conditions,” Murray said.

“They will play a very important role as a vital component of the information required for the Scoping Study.”

“We are determined to develop the Gruyere deposit into a major gold producing project and we will continue to diligently work through, and publish, the essential technical details required to develop an attractive business case for the continued progress of the Gruyere project to our loyal shareholders.”

Presently there aren’t too many junior exploration companies offering as much to look forward to as Gold Road.

The company’s immediate focus is the Gruyere project and the completion of a maiden Mineral Resource estimate scheduled for the September 2014 Quarter.

Once that has been ticked off the company expects to start a detailed Scoping Study on the project, incorporating metallurgical test work, geotechnical studies, environmental studies, and mining assessments, all of which it has already commenced.

Gold Road aims to have the Gruyere Scoping Study completed by the March 2015 Quarter.

There will be scarcely time for the company to catch its breath with further regional exploration already underway within the South Dorothy Hills Camp.

Regional scale reconnaissance program have been completed over two structural trends to the south (Gruyere Corridor) and southwest (MCS) of Gruyere.

And, of course, then there is Toto…

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

MAJOR SHAREHOLDERS

Van Eck    6%

SHARES ON ISSUE
Approx. 515.42 million

MARKET CAPITALISATION
Approx. $142 million (at 10/7/14)

 

Nickel shines as Rox stars

THE INSIDE STORY: Rox Resources (ASX: RXL) has timed its run nicely to discover the nickel project all other junior nickel explorers are chasing.

The nickel market has emerged from a five-year hiatus with LME nickel futures recording a 15 percent gain in April, the biggest monthly gain since September 2012.

Most analysts credit the run to price pressures caused by increasing supply tightness thanks to the implementation of Indonesia’s export ban on unprocessed ores and Russia’s activities in Ukraine.

Australia’s current nickel romance began in July 2012 when Sirius Resources (ASX: SIR) discovered its Nova and Bollinger deposits and was duly anointed as the Prince Charming of the Fraser Range region of Western Australia.

Soon every company along strike and within cooee began to flirt with the market extolling their respective virtues and demanding an invitation to the Fraser Range dance.

That’s not to say all companies in the area are to be compared to the Ugly Sisters, but there are probably too many not likely to replicate the success of the region’s hero.

Like all good stories, however, this one does have a Cinderella, it’s just that she lives some 900 kilometres to the north in the North Eastern Goldfields region and is better known as the Mt Fisher gold-nickel project of Rox Resources (ASX: RXL).

“We are really excited about where Rox, as a company, is at the moment,” Rox Resources managing director Ian Mulholland told The Resources Roadhouse.

“We have a couple of really strong projects, including the Mt Fisher project and the Reward zinc project in the Northern Territory.”

The Mt Fisher gold-nickel project is located 500km north of Kalgoorlie and covers an area of 658 square kilometres, 488sqkm of which is 100 percent-owned by Rox with the company holding an option to purchase 100 percent of the remaining 170sqkm.

Rox’s original target at Mt Fisher was gold, however its focus shifted after its discovery of nickel sulphides at the Camelwood deposit in December 2012 proved too significant to ignore.

Rox has since established a JORC 2012 Mineral Resource at Camelwood of 1.6 million tonnes at 2.2 percent nickel.

The Resource consists of an Indicated Mineral Resource of 0.6 million tonnes at 2.4 per cent nickel and an Inferred Mineral Resource of 1Mt at 2.1 percent nickel for 34,600 tonnes of contained nickel.

“Our main focus in on the Fisher East nickel project, which is really all about trying to define a big enough resource to start thinking about developing a mining operation there,” Mulholland said.

“We only discovered the nickel 18 months ago, and the first thing we did was complete the drilling that allowed us to define the mineral resource of about 35,000 tonnes of contained nickel.

“Our focus now is on increasing the amount of contained nickel at the project.

“The grade is there, we have already established that, but it is important now to establish 100,000 tonnes of contained nickel to enable us to develop this project into a mine with a ten year mine life producing 10,000 tonnes of nickel per year.

“That would entrench us firmly in the top five nickel sulphide producers in Australia, placing us aside companies such as BHP Billiton, Western Areas, Independence Group and Panoramic.”

 

Subsequent exploration by Rox identified the Musket and Cannonball deposits.

Early drilling at Musket has returned results including:

15 metres at 2.7 percent nickel from 264.7m, including 0.9m at 19.5 percent nickel;

17m at 2.2 percent nickel from 227m, including 8m at 3.3 percent nickel, including 2m at 8.1 percent nickel; and

16.2m at 2.8 percent nickel from 305.1m, including 0.8m at 19 percent nickel.

Recent results from a current diamond drilling program underway at the Musket nickel sulphide prospect have confirmed a coherent body of nickel sulphide mineralisation down to 300 metres depth, which the drilling has yet to close off.

Rox is confident these latest results will contribute to the estimation of a large maiden resource for Musket later this year.

“The mineralisation we are seeing at Musket is much thicker than we have encountered at Camelwood, which is only two kilometres away,” Mulholland said.

“Musket is shaping up to add significant new tonnes to our overall project resource.

“Reaching that critical mass of 100,000 tonnes of contained nickel – it will probably be bigger – will allow us to get into production and then we can fund future exploration.”

Although drilling at Fisher East has only reached 500m depth, it has indicated a mineralised system over 3km, which remains open along strike and at depth.

The mineralisation is typical of komatiite-hosted nickel sulphide deposits, similar to those found at Kambalda, with mineralisation at all three deposits occurring at the basal contact of a highly altered ultramafic lava with underlying sulphidic felsic sediments.

A series of sighter flotation tests on a number of composite drill samples achieved promising nickel concentrate grades of 11 to 15 percent nickel, at recoveries ranging from 40 to 97 percent.

Metallurgical test work is anticipated on samples from the Musket prospect in due course.

Because of the higher tenor of the Musket mineralisation compared with Camelwood, Rox believes better recoveries and concentrate grades could be achieved.

“We are completing some preliminary metallurgy test work – the results of which so far have produced good quality concentrates with no penalty elements,” Mulholland said.

“Everything looks pretty much stock standard, which has provided us with a great deal of encouragement.”

Across the border in the Northern Territory, Rox’s JV partner, Teck Australia, is planning a program of around 4,000 metres of diamond drilling at the Reward zinc project (Rox 49%, Teck 51%).

The bulk of the drilling is to be carried out at the Teena prospect where diamond drilling in 2013 defined two distinct lenses of mineralisation and encountered impressive intersections of sulphide mineralisation over a 1.5 klometre strike length.

 

Recent drilling at Teena intersected:

26.4m at 13.3 percent zinc and lead, including 16.2m at 17.2 percent zinc and lead, and 20.1m at 15 percent zinc and lead, including 12.5m at 19.5 percent zinc and lead.

Rox had already defined a JORC 2004 Mineral Resource of 43.6Mt at 5.04 percent zinc and lead at the Myrtle deposit, some 15km south of Teena.

Teck has earned a 51 percent interest at Reward having already spent $5 million.

It has recently opted to increase that interest to 70 percent by spending a further $10 million by 2018.

“The Teena zinc prospect is shaping up to be a world class deposit,” Mulholland said.

“When we end up with 30 percent of this project we will have 30 per cent of a world class deposit with significant value.

“We’re hopeful that by the time Teck earns its 70 percent we will have completed enough drilling to have a resource there.”

“Teena, potentially, is worth a lot more than what the Fisher East nickel project could be worth – this is our “Tropicana.”


Rox Resources Limited (ASX: RXL)
…The Short Story

HEAD OFFICE
Level 1, 30 Richardson Street
West Perth WA 6005

Ph: +61 8 9226 0044
Fax: +61 8 9322 6254

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

DIRECTORS
Jeff Gresham, Ian Mulholland, Brett Dickson

MAJOR SHAREHOLDERS
National Nominees   3.7%
Rox Directors        2.8%
Ram Kangatharan 2.2%
Siat Yoon Chin     1.9%
Teck Australia      1.3%

SHARES ON OFFER
745 million

MARKET CAPITALISATION
$32.8 million (at 17/6/14)

Laconia keeps both eyes on Peruvian prize

THE INSIDE STORY: Actions, they say, speak louder than words and the recent actions of Peru-focused junior exploration play Laconia Resources Limited (ASX: LCR) has a few of the bigger industry players taking notice.

The attraction has come about due to the dual-focussed approach Laconia has taken with its Kimsa Orcco project in Peru.

While keeping one eye firmly focused on assembling a jigsaw puzzle of historic data into an impressive geological model, Laconia has trained its other eye on establishing close relationships with local communities and the Peruvian government.

The Kimsa Orcco project is the amalgamation of Laconia’s 100 per cent-owned Rasuhuilca project and the Huaco Cucho project, over which Laconia has an option to earn an 80 per cent indirect interest.

 

The Kimsa Orcco project consists of two large areas of alteration zones, which Laconia has identified as the Northern Kimsa Orcco prospects and the Southern Kimsa Orcco prospects.

All of Laconia’s Patacancha permits plus the 80 per cent Earn In Option Huaco Cucho permits No 1, No 2 and Once encompass the Southern Kimsa Orcco prospects.

The balance of the 80 per cent Earn In Option Huaco Cucho permits surround the Northern Kimsa Orcco prospects.

The project currently has an Inferred Mineral Resource estimate of 360,000 tonne at 1.97 grams per tonne gold and 179g/t silver at a 2.5g/t gold-equivalent cut-off.

When Laconia initially acquired the project in 2011 it knew it held potential to be a worthwhile silver-gold project. Stuart said ‘we always thought there was potential for a mineralised porphyry system driving the gold silver resource, and that was in our longer term thinking,

However, we didn’t expect the project would display such significant copper exploration scope and scale and so quickly

“The project was brought to our attention as a silver-gold project,” Laconia Resources managing director Ian Stuart told The Resources Roadhouse.

“However the more data that emerged and was included by our chief geologist, the more it began to evolve into a porphyry copper project, which has just got better with each lot of additional data.”

After it acquired the project, Laconia set about compiling a database of more than 3,000 channel samples from approximately five kilometres of underground development and adits, and more than 40 diamond drill holes, plus associated survey and assay data.

This systematic review of data highlighted the copper potential of the project area in addition to the project’s already developed existing gold-silver epithermal vein systems.

The review revealed a high fully-intact high-sulphidation copper-gold-silver system with strong potential for an underlying mineralised copper porphyry system or associated deposits.

The results Laconia has achieved haven’t gone unnoticed and the company has recently been kept busy answering knocks on its front door from a number of companies, some much larger and knocking louder than expected.

These unsolicited approaches from entities seeking to conduct due diligence on the Kimsa Orcco project led Laconia to create a virtual data room in late 2013, which allows interested parties to access its technical data under relevant confidentiality agreements.

The idea paid off very quickly with the company recently announcing it has entered into confidentiality agreements with a number of international copper-focussed groups, several of which have conducted sites visits to further evaluate the project and complete due diligence.

One of these site visits has moved to initial discussions on potential corporate activity.

“Due to the restraints of the confidentiality agreements we are unable, at this stage, to identify any of the companies that have demonstrated a very keen interest in what we are achieving at the Kimsa Orcco project,” Stuart said.

“However, what we can reveal is that the level of corporate interest and technical expertise of the interested parties strongly validates our geological assessment and belief that the Kimsa Orcco project has extremely large exploration potential.”

As important as assembling the data base has been to the progress of the project, Laconia has also been busy finalising the necessary Social Licence required for work to begin on the Kimsa Orcco.

Changes to the approvals process for the mineral exploration industry in Peru were effected in September 2011, which means exploration companies must obtain signed agreements from community groups before commencing exploration activities.

Earlier this year Laconia Resources reached agreement with the community of Tintay, the third of three community groups Laconia needed to consult in order to gain social licence within the immediate area of impact of Kimsa Orcco and the contiguous Huaco Cucho concessions.

The Tintay agreement followed community agreements and executed access and infrastructure agreements with the nearby Yanama and Huacana communities.

“Forging the final community agreement with the Tintay formalises Social Licence over the project area and enables us to move forward with our planned drilling campaign,” Stuart said.

“This has taken a lot of hard work, as well as a diligent and considered approach on our part, ensuring we have done everything correctly and in the best interest of all parties involved.

“Community issues are an important part of operating in Peru and after a lot of hard work we have delivered in that regard.”

The strategic nature of Laconia’s dual-focused approach is apparent with the formalising of the agreements with the community groups being just as important as the information the company has put together in the virtual data room to the company’s numerous suitors.

“Our approach to community agreements, gaining Social Licence and all permissions required to drill has without doubt, been of significant importance to the outside corporate interest we have been receiving,” Stuart continued.

Quickly on the heels of finalising its social licence, Laconia received formal permission to drill (Ordene Initio) at Kimsa Orcco by the Peruvian regulator, the Ministry of Energy and Mines (MINEM).

The company wasted no time in getting exploration activities underway, kicking off with sampling and geological mapping programs.

“We now have Social Licence, permission to drill, and we have also been granted a DIA [Declaración de Impacto Ambiental], which is an environmental statement,” Stuart said.

“These aren’t trivial matters, they are what the Peruvian government requires us to do and that’s what we have done.”

“Now what people should be asking is why have we bothered to do all that”?

“The reason is that we believe we have a quality project, which we consider to be worthwhile persevering with in, what many people say is, the toughest market they can recall.”

The Kimsa Orcco project is situated on the collapsed rim of the Ccarhuaraso strato-volcano within a highly-visible zone of secondary argillic alteration.

 

The company has used modern exploration technology and processes to become the first explorers to systematically collate all available information and construct three-dimensional models of mineralisation at Kimsa Orcco.

Laconia believes its work supports views of previous explorers, who compared the style and nature of the mineralisation at the Ccarhuarazo Epithermal System to the high-grade El Indio deposit in northern Chile.

With all permits and licences now in place the company’s future work will target the high-grade copper-gold-silver targets within buried intrusive stocks, as well as copper-gold-silver-zinc mineralisation in skarns surrounding buried intrusive stocks.

Laconia Resources Limited (ASX: LCR)
…The Short Story

HEAD OFFICE
Suite 2, Level 1, 47 Havelock Street
West Perth WA 6005

Ph:  +61 8 9486 1599
Fax: +61 8 9486 7899

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

DIRECTORS
Matthew Howison – Chairman
Ian Stuart – Managing Director
Matthew Edmondson – Non-Executive Director
 

MAJOR SHAREHOLDERS
Josephine Patoir             4.3%
Slade Technologies Pty Ltd    4.3%
Ian Stuart                            2.9%

Cassini bags BHP bundle

THE INSIDE STORY: Junior exploration play Cassini Resources (ASX: CZI) recently caused a minor tremor on the boards of the Australian Securities Exchange.

The excitement followed the company’s announcement it had executed a Sale and Purchase Agreement to acquire 100 per cent of the West Musgrave project in Western Australia.

While the acquisition of such a project by a junior company is fairly common, what cast this particular deal into the spotlight was the identity of the vendor.

Cassini secured the property 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.

 

The crucial element of the deal for Cassini is all these deposits and targets come under the company’s control with a great deal of exploration and development work already completed.

Nebo‐Babel, the project’s pivotal prospect, was first discovered by Western Mining Corporation (WMC) in 2000, when drilling intersected mineralisation of 26.55 metres at 2.45 per cent nickel, 1.78 per cent copper, 0.74 grams per tonne platinum group elements (PGE) plus gold.

BHP arrived on the scene by swallowing up WMC in 2005, after which time Nebo‐Babel was subjected to a healthy amount of exploration activity, which mainly focused on developing the deposits as a large‐scale, low‐grade production model.

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.

“Because of the way BHP originally approached the project, the high-grade ore body within the deposits was never really domained,” Cassini Resources managing director Richard Bevan told The Resources Roadhouse.

“They intended it to become a large large‐scale, low‐grade production model.

“We intend looking at the project differently, as a high-grade opportunity – as a smaller project than what BHP originally envisaged.

 “So we have some work to do over the next six to twelve months to really get in there and define that high-grade ore body.”

Cassini is confident Nebo‐Babel has the characteristics necessary for it to become a smaller, higher‐grade operation.

This confidence stems from the results of the due diligence the company carried out over the deposit, which revealed its substantial production potential.

Cassini’s due diligence demonstrated the existence of discrete higher‐grade zones within the Nebo‐Babel deposit, which have yet to be fully delineated by drilling.

Both deposits are suitable for openpit co‐development as they are very close to the surface, with the Babel deposit outcropping.

Nebo‐Babel also revealed favourable ore‐body geometry as a flat dipping deposit, which Cassini considers shows potential for an openpit operation with a very low stripping ratio.

Another vital aspect of the acquisition is the reasonably small consideration of $250,000, ten per cent of which has already been paid by Cassini as a deposit.

BHP will be paid a two per cent net smelter royalty, which will apply to the net proceeds from future production from the tenements within the project.

Cassini will also pay a production milestone payment due 12 months after production from the project commences, amounting to $10million in cash.

Cassini considers such a minimal up-front cost de‐risks the project considerably and allows it to focus on assessing future development options.

“It is better than drilling the discovery hole in many ways,” Bevan said.

“BHP has spent a significant amount of money on the deposit to bring it to where it is now, which means we don’t have to.

“For us that means we are moved a considerable way along – a lot of the risk is gone – in the sense that we are not out there trying to find something – it’s already been found.

“For the cost of a drill program [the $250,000 consideration] we have got a project with high-probability for an economic deposit.

“However, there are a couple of things we need to do in order to confirm that is the case.”

 

Using what it has learned from the extensive work already undertaken on the project, and the $10 million proceeds from a subsequent share placement, Cassini proposes carrying out resource definition drilling to infill known higher‐grade zones to build a higher‐grade subset to the overall Nebo ‐ Babel Mineral Resource.

It will also conduct metallurgical testing to ensure it can achieve acceptable recoveries within higher‐grade ore at Nebo‐Babel.

“BHP has already conducted a fair bit of metallurgy testing,” Bevan explained.

“However, they approached that in a similar way to which they approached the project itself – by taking bulk composite samples.

“They didn’t actually look at the recoveries for the higher grade, or the recovery for the different types of ore present.

“That’s the work that needs to be done. That’s the opportunity for us – to approach it as a junior company would – and within that greater project area is a smaller valuable subset.”

Cassini’s acquisition of the West Musgrave project demonstrates that, even though the market may currently be experiencing some tough times, when a junior mining company is prepared to take a chance it can still be handsomely rewarded.

The overnight success of the deal started some 18 months ago when Cassini boldly approached BHP to gauge whether it may be interested in divesting the projects. As it turned out BHP was interested.

There was also a great deal of interest in the projects from a number of Cassini’s contemporaries in the junior sphere, all of which were just as eager to augment their own projects in the West Musgrave region.

“One of the criteria BHP had was that the project would go to a company with existing relationships in the area and would develop the project so the communities in the region would actually see some benefit from the project,” Bevan said.
 
“Fortunately we have worked hard developing an existing relationship with the communities and the traditional owners in the region.”

Another differentiating factor that shouldn’t be overlooked is the personnel who sit around Cassini’s Boardroom table.

The company’s chairman Mike Young with his exploration to production experience with BC Iron, demonstrates the ability to take an asset and bring it through to production in a reasonably short time frame.

John Hronsky has been consulting to Cassini through his consulting group Western Mining Services and was previously with BHP Billiton Minerals Exploration and WMC Resources.

He was a key member of the targeting strategy and exploration team that led to the discovery of Nebo‐ Babel, which does qualify him to be a very handy man for Cassini to have on its team at this time.

“We consider the West Musgrave project to be a truly significant set of assets, and being able to acquire them is a great result for Cassini,” Bevan said.

“Nebo‐Babel is widely regarded as a world‐class deposit and, as a smaller company, we look forward to applying a different, innovative approach to these assets, focussing on higher‐grade opportunities, with the aim of progressing their development to production as a priority.

“We are confident we can hit a number of major project milestones within the next six to twelve months.”


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%