THE BOURSE WHISPERER: Breakaway Resources (ASX:BRW) has signed an $8 million farm-in joint venture with Australian copper producer Sandfire Resources (ASX: SFR).

Sandfire has reached agreement with Breakaway’s 100 per cent-owned subsidiary Levuka Resources to farm-in to the broader Altia project, located 70 kilometres south-east of Cloncurry in north-west Queensland.

 

Sandfire JV locations (in red). Source: Company announcement

 

Sandfire has also agreed to inject $600,000 to acquire a 6.3 per cent interest in Breakaway.

The additional funding will be used for ongoing exploration of the company’s 100 per cent-owned Eloise exploration project, including its flagship Sandy Creek copper-gold project, where it is in the process of calculating a maiden JORC resource estimate.

We are thrilled to have secured a company of Sandfire’s calibre to progress the evaluation of the broader Altia project, which we believe offers outstanding potential for the discovery of large-scale Broken Hill-type deposits,” Breakaway Resources managing director Victor Rajasooriar said in the company’s announcement to the Australian Securities Exchange.

The work undertaken at Altia over the past few years has clearly established the technical merits and potential of the project and, after looking at it with a fresh set of eyes with Sandfire, we believe that the Altia deposit may form part of a much larger mineralised trend which offers multiple targets for a major new discovery.

“With the injection of funding and technical know-how from Sandfire, the newly established joint venture will be in a much stronger position to assess the project and appropriately target its exploration activities with a view to identifying a sizeable new discovery.”

The tenements encompassed by the Joint Venture include the Altia deposit, where Breakaway has delineated a maiden Inferred Mineral Resource of 5.8 million tonnes at 40 grams per tonne silver, 4 per cent lead and 0.5 per cent zinc.

Under the terms of the Joint Venture agreement, Sandfire can earn an initial 60 per cent interest by spending $4 million on exploration over a three-year period, and can then elect to increase its stake to 80 per cent by spending a further $4 million over the subsequent three years.

“We are particularly pleased that Sandfire has recognised the growth potential within our large project portfolio by agreeing to join our share register as a strategic shareholder,” Rajasooriar said.

“We believe this represents a strong vote of confidence in our broader Eloise exploration project, where we have multiple copper-gold exploration targets plus a relatively advanced project at Sandy Creek.

“The funding injection from Sandfire will help us move to the next stage of evaluating the Sandy Creek project by undertaking a Scoping Study once we complete the maiden JORC resource estimate, for which work is currently underway.

“We are in the process of assessing the best way forward for the Eloise project, including opportunities to move Sandy Creek towards a production scenario in the near term.”

THE BOURSE WHISPERER: Ghana-focused gold explorer Castle Minerals (ASX: CDT) has had metallurgy test work completed that it says has confirmed the commercial potential of the company’s Kambale graphite deposit.

Flotation tests were conducted on fresh and weathered graphitic schist from the Kambale deposit in north‐west Ghana, which have demonstrated graphitic carbon from the deposit, can be easily recovered through simple flotation.

Flotation recovery results for plus-75 micron (flake graphite) were estimated at nearly 70 per cent for fresh material and 34 per cent recovery from weathered material.

Flake graphite has high value and is currently priced at $1500 to $3000 per tonne.

Flotation recoveries for ‐75 micron (amorphous graphite) came in at 93 per cent for fresh and 62 per cent for weathered material.

“We are very pleased to report these first flotation tests that confirm the commercial potential of Kambale to be a low cost producer of flake graphite,” Castle Minerals managing director Mike Ivey said in the company’s announcement to the Australian Securities Exchange.

“Kambale now justifies detailed metallurgical investigation to define the optimum processing, recovery and concentrate treatment path for the very large resource that we have outlined so far.”

Castle released a maiden Mineral Resource Estimate for Kambale in July this year of 14.4 million tonnes at 7.2 per cent graphitic carbon for 1.03 million tonnes contained graphite, including 6 million tonnes at 8.6 per cent graphitic carbon for 0.52 million tonnes contained graphite.

 

Drill hole location plan of Kambale graphite deposit with
significant graphite intercepts. Results in blue were used in the July
2012 resource estimate whilst those in black are from new drilling
testing the southern strike extension. Source: Company announcement

 

Castle claims Kambale ranks as one of the world’s larger global graphite deposits.

“As well as expanding the Kambale deposit and conducting detailed metallurgical test work, Castle remains committed to the company’s core focus of building on the gold exploration successes achieved to date on its highly prospective and proven licences,” Ivey said.

Since listing on the ASX in May 2006 Castle (ASX:CDT) has acquired the rights to six mineral projects in Ghana, West Africa including Akoko, Antubia, Banso, Bondaye, Opon Mansi (application) and Wa covering more than 11,000 square kilometres.

All granted projects are 100 per cent-owned by Castle Minerals (subject to Ghanaian Government right to a free‐carried 10 per cent interest).

The Kambale graphite prospect is situated within the Wa‐Lawra greenstone belt, which is being explored for gold and base metals by Castle.

THE BOURSE WHISPERER: Cove Resources has signed a Letter of Intent (LOI) with Sachtleben Pigments Oy.

Sachtleben Pigments Oy is a subsidiary of Sachtleben GmbH, which is one of the world’s largest producers of pigment titanium dioxide and functional additives.

Cove said the LOI marks an important step in its development plans for the Koivu titanium project.

The LOI forms the basis of a potential long term working partnership whereby Cove would include Sachtleben and its advisors in all aspects of a Bankable Feasibility Study into the project.

Sachtleben would look to provide ongoing support to Cove for the Koivu titanium project providing necessary resources and assistance to ensure the Ilmenite concentrate mine product will be of an acceptable quality.

“Cove is confident in the quality of the Koivu Ilmenite product as previous test work at Pori in 2001 confirmed the concentrates suitability for the Sachtleben plant,” Cove Resources saidin its ASX announcement.

“At that time 1,600 tonnes of ilmenite concentrate was successfully processed in a full scale batch test.”

During the BFS, Cove will work with Sachtleben with a view of executing a long term titanium feedstock supply contract.

Sachtleben & Co was established in 1878 and has been producing TiO2 at its Pori plant since 1961.

Pori, on the west coast of Finland, is the closest Sachtleben pigment plant to Koivu and the BFS will look at modelling transport routes to Pori and other Sachtleben plants in Germany.

 

Location of the Koivu titanium project relative to the Sachtleben
Pigments Oy, Pori plant and other key plants in Europe. Source: Company
announcement

 

The ports of Kokkola and Pori are currently used for bulk cargo, and discussions with port authorities indicate that excess capacity is present.

Cove acquired the Koivu titanium project from Endomines Oy in July.

The company said it considers Koivu to be an advanced-stage project and that the LOI builds on a scoping study the company recently completed on the project.

Highlights of the Koivu Scoping Study include:

–    The project’s existing resources may support a 20 year, 1.6 million tonnes per annum operation, which equates to a 250,000 tonnes per annum production rate;

–    The project has an estimated Net Present Value of US$131 million and Internal Rate of Return of 32 per cent (pre-tax, 10 per cent real discount rate, 100 per cent equity, direct and indirect capital costs plus 35 per cent capital expenditure contingency);

–     Operating Costs of $110.50 per tonne of titanium pigment after magnetite by-product credits; and

–    Annual operating margin of $28.63 million.

Cove said its goal is to develop the project into a large scale mining operation producing a high quality titanium pigment feedstock concentrate, supplying European markets, with first full year production planned for 2015.

The company claims the development of the Koivu project will position it as a globally significant, long-term supplier of quality titanium feedstock.

 

THE BOURSE WHISPERER: Terranova Minerals has entered an agreement to acquire 100 per cent interest in the Manica gold project in Mozambique from AIM-listed Pan African Resources.

The Manica project has a JORC-compliant gold resource of approximately three million ounces.

The project is located in central Mozambique, approximately 270 kilometres from the port city of Beira on the Indian Ocean.

The project is positioned in the Beira Corridor which contains major road and rail infrastructure linking Zimbabwe to Beira.

Terranova described the region surrounding Manica to be well known for hosting gold mines such as Penhalonga, Rezende, Monarch and Old West.

 

Project location. Source: Company announcement

 

An estimated two million ounces of gold has been extracted from the Rezende Mine and surrounding deposits, which are situated along strike extensions of the Manica gold project.

“The Manica gold project is an exciting opportunity for the company to acquire an advanced stage gold project with significant resources, in a favorable mining jurisdiction,” Terranova Minerals chairman Ben Bussell said in the company’s announcement to the Australian Securities Exchange.

“In addition to the outstanding asset, the company has obtained a very solid management and technical team.

“The company has negotiated a strong, constructive and performance based agreement tied to the continued exploration success and ultimate production of the Manica gold project.

“The project is still relatively under explored; drilling has only targeted two kilometres of an identified strike length of 27 kilometres.

“The incoming team has outlined several drill ready targets that will start a round of high impact exploration work in the first quarter of 2013.

“We believe this will lead to significant upside in the resource potential and will drive shareholder growth.”

THE BOURSE WHISPERER: Mineral sands explorer Sheffield Resources has added to the resources base of the company’s Eneabba heavy minerals sands (HMS) project in Western Australia with the announcement of a maiden Mineral Resource for the Durack prospect.

Durack is one of six deposits Sheffield has identified within the Eneabba project.

Three other deposits (West Mine North, Ellengail, Yandanooka) have already been included in the project’s resource inventory.

 

Location of Durack within the Eneabba project. Source: Company announcement

 

The Durack resource adds 170,000 tonnes of zircon, 824,000 tonnes of ilmenite, 65,000 tonnes of leucoxene and 33,000 tonnes of rutile to the Eneabba project resource inventory, which now stands at 5.29 million tonnes of contained HM.

The company said Durack had exceeded its expectations since the initial discovery of near-surface mineralisation at the deposit in May.

“Durack adds substantially to our Eneabba project resource inventory and vaults us over the five million tonne contained heavy mineral milestone.” Sheffield Resources managing director Bruce McQuitty said in the company’s announcement to the Australian Securities Exchange.

“Importantly, Durack is a zircon-rich deposit with over 14 per cent zircon in the mineral assemblage.

“Sheffield continues to deliver on its strategy of building an inventory of near-surface high value zircon and rutile-rich heavy mineral sand deposits which will add flexibility and mine life to the rapidly expanding Eneabba project.”

Sheffield said its next phase of work at Durack will involve metallurgical testwork on drill composite samples to determine the deposit’s potential final product characteristics.

Once this work has been completed, the Durack resource will be incorporated into a revised economic assessment of the Eneabba project.

The company is currently waiting on assay results from drilling at the Drummond Crossing and Irwin prospects on the Eneabba project, which it expects to receive over the next few months.

Drilling is also continuing at the company’s Dampier zircon project, with first assay results expected in the near future.