THE DRILL SERGEANT: Potash West (ASX: PWN) has updated the economic model for the production of single superphosphate (SSP) at the company’s wholly-owned Dandaragan Trough project north of Perth Western Australia.

The latest results update a Scoping Study the company completed on the project last year and follow on from a re-estimation of the Dinner Hill phosphate resource, which the company achieved after improvements to the metallurgical flowsheet, enabling the processing of the chalk.

 

Process Flowsheet. Source: Company announcement

 

In February Potash West announced a breakthrough in the metallurgical testwork program, which it claimed demonstrated the potential to recover phosphate from the chalk by implementing a selective flotation regime.

Based on these results the Dinner Hill phosphate deposit was re-estimated to contain an Indicated Mineral Resource of 120 million tonnes at 2.8 per cent phosphate, 3.1 per cent potassium, and 8.2 per cent calcium above a lower cut-off grade of 2.15 per cent phosphate.

The company explained the updated results take into account the ability to process the chalk seam.

A mine production rate of 3.8 million tonnes per annum to produce an average of 340,000 tonnes per annum SSP has been considered.

The project is based on the current JORC compliant resource outlined at Dinner Hill, which the company emphasised is only a small part of the Dandaragan Trough project area, where it considers potential exists to expand the resource to the north and northeast.

Key outcomes from the updated study are:

Processing rate of 3.8 million tonnes per annum;

Mine life 20 years;

Average revenue per year $124 million;

Operating cash costs per year (inclusive of royalties) $82.1 million ($241 / tonne of SSP);

IRR 29.5 per cent;

NPV   $331 million; and

Payback period of less than four years.

“The ability to process the chalk has resulted in a significant improvement in the economic modelling outcomes for the project,” Potash West managing director Patrick McManus said in the company’s announcement to the Australian Securities Exchange.

“The fact that the chalk can be processed simplifies the mining and significantly reduces those costs.

“Excitingly, this recent work has made a very robust project, with good payback, IRR and NPVs even stronger.

“Our studies have also identified that the phosphate mineralisation can be significantly upgraded relatively simply and cheaply, which allows for relatively small downstream processing units and significantly reduced start-up costs.

“Importantly, the positive outcomes of the study provide Potash West with the confidence to move forward towards a Definitive Feasibility Study.”

Email: info@potashwest.com.au

Website: www.potashwest.com.au

THE DRILL SERGEANT: Apollo Minerals (ASX: AON) has kicked of its largest exploration program at the company’s new iron-oxide-copper-gold (IOCG) frontier in the northern Gawler Craton, South Australia.

Apollo said the exploration program is being conducted across the company’s various joint venture project areas associated with its Titan project in the Gawler Craton.

The program will be working on Apollo’s two new joint venture areas; at Mars Aurora Tank and the Eagle Hawk Joint Venture.

 

Titan project – Apollo tenement and farm-in JV areas. Source: Company announcement

 

On top of this Apollo also indicated it will continue to work closely with High Powered Exploration Inc (HPX) to finalise exploration plans for the proposed Commonwealth Hill farm-in and joint venture with that was struck in February 2014.

This will include a High Power Super Induced Polarisation (IP) survey over the Bundi North and Wirrida Intrusive Complex targets.

Apollo said this is anticipated to be the one of the largest and highest powered IP surveys ever undertaken in South Australia.

The company stressed that the HPX farm-in and JV transaction does not affect its existing joint venture arrangements, including the adjacent Eaglehawk farm-in JV and the Aurora-Tank farm-in JV.

The work being conducted under Apollo’s upcoming exploration program includes:

Mars Aurora Tank JV (EL4433 – Apollo earning 75 per cent)

Apollo has commenced a trial IP survey across the gravity and magnetic anomalies at Mars Aurora Tank to determine if copper and/or gold sulphides are detectable and targetable with drilling.

A RAB drilling program has also commenced to test for copper and/or gold anomalism beneath the pervasive sand cover.

Eaglehawk JV (EL4932 – Apollo earning 75 per cent)

A ground based gravity survey has recently been completed across the Bundi South prospect (within the Eaglehawk JV area).

This area is directly adjacent to the Commonwealth Hill farm-in JV with HPX.

The survey is primarily targeting a possible southern extension to the Bundi anomaly and will also evaluate areas south of Bundi which have not previously been covered by Apollo and are also in prospective IOCG terrain.

Email: info@apollominerals.com.au

Website: www.apollominerals.com.au

THE DRILL SERGEANT: Each week any number of junior exploration plays set out to drill their ground. Here’s a small selection of what’s been happening this week.

Julius gold discovery drilling

Echo Resources (ASX: EAR) has commenced a Reverse Circulation (RC) drilling program at the Julius gold discovery.

The Julius gold discovery is located in the Yandal Gold Province, approximately 750 kilometres northeast of Perth, Western Australia.

The drilling program will test for potential extensions to high-grade gold mineralisation located in step-out RC drill holes collared 300m west of the main drilling area at Julius, which yielded intercepts of:

16m at 19.8 grams per tonne gold from 276m, including 4m at 75.6g/t gold (ERC222)

5m at 21.6g/t gold from 235m, including 3m at 35g/t gold
(ERC186)

The drilling will also be testing for near-surface gold lodes in central and north-eastern parts of the mineralised system, which recently yielded RC drill intercepts of:

19.1m at 8.1g/t gold from 49m, including 5m at 21.7g/t gold
(ERCD208)

44m at 3.8g/t gold from 24m, including 4m at 29g/t gold
(ERC217)

24m at 5.3g/t gold from 44m, including 4m at 22.6g/t gold (ERC212)

Duckhead mining resumes

Beadell Resources (ASX: BDR) announced the temporary suspension to carry out mining at Duckhead has been lifted with mining activities resuming immediately.

The company also said step out exploration drilling of the Duckhead high-grade main lode is now underway.

The company said production guidance and costs at Duckhead for CY 2014 remains unchanged at 200,000 to 220,000 ounces of gold with cash costs of US$535 to $585 per ounce (including royalty and by-product credits), well within the lowest cash cost quartile globally.

Diamond drilling underway at Red Bore

Thundelarra (ASX: THX) has commenced a diamond drilling program at the company’s 90 per cent-owned Red Bore prospect (M52/597) in the Doolgunna region of Western Australia.

The program has two main objectives, the first of which is to obtain core samples through and beyond the known mineralisation so that orientation data may be collected to allow the structural and lithological controls on the mineralisation to be identified and re-interpreted.

This information will allow a better understanding of the geometry of the mineralisation and help in targeting possible extensions and/or repetitions.

The second objective is to obtain a continuous core sample from a deep hole in the north-west part of the tenement that will assist in identifying the local geological controls in that area and thus generate some understanding of any potential for repetitions to or extensions of the DeGrussa mineralisation, particularly the Conductor 5 deposit.

Millers Creek magnetic survey completed

Monax Mining (ASX: MOX) has completed a heli-borne magnetic survey on the Millers Creek designated project, located within the Woomera Prohibitive Area (WPA) in South Australia.

The Millers Creek DP is a joint project between the company and its strategic alliance partner, a wholly-owned subsidiary of major Chilean copper producer Antofagasta plc, via Monax’s own wholly-owned subsidiary, Monax Alliance Pty Ltd.

The Millers Creek DP comprises three Alliance tenements together with four Maximus Resources (ASX: MXR) tenements totalling 3165 square kilometres.

Modelling of the magnetic and the recently acquired detailed gravity data will be carried out, after which the results will be presented to the Monax: Antofagasta Technical Committee for a decision to drill.

THE DRILL SERGEANT: Encounter Resources (ASX: ENR) has commenced a 9,000 metre diamond drilling program at the company’s Yeneena base metals project in Western Australia.

BM2 zinc prospect (100 per cent Encounter)

Encounter has kicked off its 2014 diamond drill program at the BM2 zinc prospect at Yeneena.

The company said the initial hole in the program will test the up dip position of high-grade zinc sulphide mineralisation it previously intersected in hole EPT1854, which was drilled at the end of the 2013 drill campaign, returning:

0.7 metres at 36.5 per cent zinc from 430.05 metres.
 
The current diamond hole EPT1855 is targeting mineralised carbonate and shale contact 100m up dip from EPT1854.

This targeted contact is located 100m down dip of a broad zone of iron-manganese oxide material that was intersected in EPT1831.

 

BM7 Cross Section 7539400mN with planned diamond hole traces. Source: Company announcement

 

BM7 Copper Prospect (Antofagasta Earning in)

Last year exploration work on the BM7 prospect outlined a 6km by 3km copper system that remains open to the south.
 
The final diamond hole in 2013, EPT1719, intersected a 5.3 metre zone, with locally massive copper sulphides forming as breccia cement near the upper boundary of a narrow carbonate unit.

This zone returned an assay of:

5.3m at 2.5 per cent copper from 387.6m including 0.7m at 10.7 per cent copper from 388.6m.

“The initial three diamond holes at BM7 are planned to test the area down dip and to the east of high-grade copper sulphide mineralisation in EPT1719,” Encounter Resources said in its ASX announcement.
 
“The initial three 800 metre spaced holes have been designed to confirm the broad scale geological model and provide lithogeochemical and structural vectors to high grade copper sulphide mineralisation.

“This initial drilling will also provide the first diamond drilling at the BM7 East regolith anomaly.

“This is a late rally extensive plus-five per cent copper anomaly that extends over two kilometres in strike.

“The planned exploration under the Antofagasta earn in agreement during the June 2014 quarter includes 4,000 metres of diamond drilling and 5,500 metres of aircore/RC drilling.”

Email: contact@enrl.com.au

Website: www.enrl.com.au

THE DRILL SERGEANT: Aus Tin Mining (ASX: ANW) has released the results of a Pre‐Feasibility Study (PFS) for the company’s Taronga tin project, located in northern New South Wales.

Aus Tin Mining said the PFS has confirmed the technical and economic viability of the project while highlighting areas of potential economic upside.

The company has previously reported a Mineral Resource (JORC 2012) of 36.3 million tonnes at 0.16 per cent tin for 57,000 tonnes of contained tin.

A Probable Ore Reserve (JORC 2012) has been estimated of 22 million tonnes at 0.16 per cent tin for 35,600 tonnes of contained tin or 96% of the production target.

Aus Tin Mining explained the PSF proposes processing the relatively simple ore at 2.5 million tonnes per annum using conventional practices and is expected to achieve an overall tin recovery of 70 per cent and generate an average 2,815 tonnes of tin in concentrate per annum over a 9.3 year mine life.

The company said medium grade concentrate (55 per cent tin) acceptable to tin smelters will be produced and will likely be exported into the Asian market.

 

Taronga tin project PFS operating parameters. Source: Company announcement

 

“We are pleased with the results of the pre‐feasibility study confirming the technical and economic viability of the Taronga tin project and are excited by the extent of upside opportunities identified during the work,” Aus Tin Mining chief executive officer Peter Williams said in the company’s announcement to the Australian Securities Exchange.

“Approaching the study from the perspective of not simply generating a technically sound project but also one that can be financed is expected to be rewarded as we move forward with our funding discussions.”

Email: info@austinmining.com.au

Website: www.austinmining.com.au