THE DRILL SERGEANT: Peak Resources (ASX: PEK) has finalised the Preliminary Feasibility Study (PFS) for the company’s 100 per cent-owned Ngualla rare earth project in Tanzania.

Peak said the PFS has confirmed Ngualla to be an economically robust project at a base case production rate of 10,000 tonnes per annum of separated high-purity rare earth oxides (REO).

The Study has concluded the Ngualla project to have a Net Present Value (NPV) of US41.310 billion pre-tax and royalties (US$1.005 billion NPV post tax and royalties) with a 39 per cent Internal Rate of Return (post tax and royalties).

The project could reach payback in its third year of production producing an average annual operating free cash flow of US$174 million per annum for 58 years pre-tax and royalties (US$116 million per annum post tax and royalties).

When leveraged to rare earth prices, 83 per cent of Ngualla’s forecast revenue will be derived from the high value, high demand neodymium – praseodymium and mid and heavy rare earth products the company anticipates producing.

According to Peak, the Study applied conservative price assumptions with an average product price for the Ngualla rare earth composition of US$29.29/kg for high purity separated REO.

The project is also well-leverage in regards to any further increases in rare earth prices with potential for after tax and royalty NPV to increase to US$ 1.608 billion for an additional 25 per cent increase in prices.

 

Source: Company announcement

 

The Study also came in with low capital and operating costs, reducing the cost predicted in a Scoping Study from last May by US$91 million to US$282 million.

Operating costs came in at US$11.74 per kilogram high purity separated rare earth oxide products over the life of mine, which is projected at 58 years.

“We are extremely happy with the results from the PFS,” Peak Resources managing director Darren Townsend said.

“These show the project to be robust with an extremely long mine life and attractive free cash generation.

“From the detailed work completed we have identified opportunities for potential further operating cost reductions through the optimisation of the processing circuits and additional reagent recycling.

“With the positive outcome of the study we will step up our discussions with a number of potential strategic financial partners with a view to rapidly progressing the development of the Ngualla project.”

Email: info@peakresources.com.au

Website: www.peakresources.com.au

THE DRILL SERGEANT: Blackham Resources (ASX: BLK) has received the first results from initial drilling being carried out on the Galaxy deposit at the company’s Matilda gold project in Western Australia.

Blackham’s resource inventory at the Matilda gold project currently stands at 24 million tonnes at 1.9 grams per tonne gold for 1.4 million ounces of gold.

 

Source: Company announcement

 

The company explained this is the first drilling it has conducted at Galaxy, which has a resource – based on previous exploration – of 52,000 ounces of gold.

The program was designed to test potential near-surface extensions of mineralisation at Galaxy as well as potential new resource areas at Mentelle and Matilda.

So far assays have been received for the first 16 holes of the program, which were drilled at Galaxy, while further results are expected from additional drilling at Mentelle and Matilda in the coming weeks.

The drilling has so far achieved a number of high-grade results, including:

GARC0011:
4 metres at 19.6 grams per tonne gold from 37 metres, including 1 metre at 43.3 grams per tonne gold from 37 metres;

GARC0013:
2m at 9.58g/t gold from 15m; and

GARC0016:
2m at 12g/t gold from 9m.
 
The company claims these widths and grades are consistent with historical drilling, while indicating mineralisation intersected in GARC0011 is outside the current resource.

Blackham considers this demonstrates potential for identifying new lodes and greatly improving mining economics.

The company is continuing to interpret the results, although it is confident, at this stage, that further drilling is warranted to delineate the additional lodes identified in this drilling in order to confirm the orientation of high-grade mineralisation.

“The Galaxy deposit is a modest sized resource although strategically important due to its high-grade and expression at surface,” Blackham Resources said in its ASX announcement.

“The company envisages future drilling to involve a combination of exploration for new lodes as well as infill drilling to facilitate a new estimate with a higher degree of confidence.”

Website: www.blackhamresources.com.au

THE DRILL SERGEANT: West African Resources (ASX: WAF) has received further gold results from a 5,000 metres reverse circulation (RC) drilling program at the Mankarga 5 deposit located on the Tanlouka permit, which is part of the company’s Boulsa project, in Burkina Faso.

The company said the results represent the conclusion of the shallow RC program at the Mankarga 5 deposit, which it has carried out since acquiring TSX-V listed Channel Resources less than two months ago.

 

Mankarga Summary Plan. Source: Company announcement

 

The results cover more than one kilometre of strike on the central and northeast portions of the deposit, with highlights including:

TAC0045:
9 metres at 1.44 grams per tonne gold from 48 metres;
 
TAC0048:
12m at 8.82g/t gold from 38m, including 9m at 11.35g/t gold;

TAC0050:
8m at 5.69g/t gold from 35m, including 1m at 41.51g/t gold;

TAC0051:
14m at 2.42g/t gold from 9m, including 1m at 21.22g/t gold;

“We are very pleased with the final results from the shallow RC drilling program at Mankarga 5,” West African Resources managing director Richard Hyde said in the company’s announcement to the Australian Securities Exchange.

“The program has been very successful with consistent high-grade mineralisation intercepted along two kilometres of strike.

“The new data will result in an increase in the grade of oxide mineralisation which will be reported in the updated resource estimate for the Mankarga 5 deposit later this month.”

West African indicated it still has a program of deep diamond drilling currently underway in the south-western portion of the deposit, with drill hole TAN14-DD03 nearing completion.

Test work has commenced in Perth on samples from the four metallurgical diamond holes, which the company anticipates will determine expected recoveries from heap leach processing.

It is expected the drilling programs, in conjunction with a reinterpretation of the Mankarga 5 deposit, will lead to a resource update towards the end of this month.

The company is confident the combination of the results of the work programs will enable it to complete a Preliminary Economic Analysis (PEA) and Scoping Study in the first half of 2014.

Email: info@westafricanresources.com

Website: www.westafricanresources.com

THE DRILL SERGEANT: Orion Gold (ASX: ORN) has received the first analytical results from its 2014 RC drilling program at the Peninsula project, located within the company’s Fraser Range nickel-copper-PGE project in Western Australia.

Orion drilled holes OPRC008, 009 and 010 in the eastern portion of the HA2 prospect to test an anomaly identified in a recently completed, trial IP survey.

 

Plan of Peninsula project showing historical drilling and
interpreted bedrock geology. Inset maps shows location of 2013 &
2014 drilling overlain on aeromagnetics (bottom). Source: Company
announcement

 

The holes intersected a mafic gabbro below a cover of recent sediment, encountering fresh gabbro containing finely disseminated sulphides from approximately 45m depth to the end of the holes.

The holes ended in mineralisation and the mineralisation remains open in all directions.

Highlights from the results of all drilling included:

OPRC008:
80 metres at 0.11 per cent nickel, 0.05 per cent copper and 0.01 per cent cobalt from 44 metres, including 12 metres at 0.22 per cent nickel, 0.11 per cent copper and 0.02 per cent cobalt from 52 metres; and

8m at 0.06 per cent nickel and 0.01 per cent cobalt from 132m;

OPRC009:
47m at 0.08 per cent nickel, 0.02 per cent copper and 0.01 per cent cobalt from 44m;
 
13m at 0.07 per cent nickel, 0.02 per cent copper and 0.01 per cent cobalt from 138m;

10m at 0.07 per cent nickel and 0.04 per cent copper from 170m; and

6m at 0.10 per cent nickel, 0.05 per cent copper and 0.01 per cent cobalt from 190m.

OPRC010:
18m at 0.06 per cent nickel, 0.02 per cent nickel and 0.01 per cent cobalt from 38m; and

50m at 0.09 per cent nickel, 0.04 per cent copper and 0.01 per cent cobalt from 100m, including 10m at 0.14 per cent nickel, 0.07 per cent copper and 0.01 per cent cobalt from 116m.

Orion indicated a sample within the oxide zone from between 12 and 13 metres in OPRC008 had returned 0.08 grams per tonne platinum and 0.28g/t palladium.

The company said that although this result is from an isolated anomalous sample within the weathered zone, it provides further encouragement PGE mineralisation may also be present within the intrusive complex.

“These results confirm that our systematic targeting process is successfully leading us to the right areas in the right rocks,” Orion Gold managing director Errol Smart said in the company’s announcement to the Australian Securities Exchange.

“The company is strongly encouraged by these wide mineralised intersections which provide the first drilling evidence that the northern extent of the Fraser Range Belt contains substantial nickel-copper metal endowment in mafic intrusive rocks.

“These intersections represent some of the widest sulphide nickel-copper intersections drilled within the Fraser Range Belt.

“We await the remainder of assays together with downhole EM and petrographic results with anticipation.”

Email: info@oriongold.com.au

Website: www.oriongold.com.au

THE DRILL SERGEANT: Navarre Minerals (ASX: NML) has achieved encouraging copper and gold results from a recent shallow drilling program at the company’s 100 per cent-owned Eclipse copper-gold prospect.

The prospect is located 300 kilometres northwest of Melbourne in the Miga Arc copper belt.

The shallow drilling returned shallow copper and gold up to 2.8 per cent copper and up to 3.3 grams per tonne gold while indicating secondary (chalcocite) copper approximately 30m from surface.

Copper grades better than 1 per cent copper were recorded in six of seven holes received to date, with RC drill results including:
 
RCBR0001:
5 metres at 1.8 per cent copper, including 1m at 2.8 per cent copper within 23m at 0.7 per cent copper from 30m.

RCBR0002:
1m at 1.4 per cent copper and 1m at 1.3 per cent copper within 29m at 0.5 per cent copper from 29m.

RCBR0003:
1m at 1.6 per cent copper within 9m at 0.4 per cent copper and 0.8 grams per tonne gold, from 28m;

45m at 0.4g/t gold from surface, including 1m at 3.3g/t gold;

10m at 1 per cent zinc from 32m;

16m at 1.5 per cent lead from 25m; and

24m at 8.6g/t silver from 24m.

RCBR0004:
2m at 1.2 per cent copper within 15m at 0.3 per cent copper from 37m.

RCBR0006:
2m at 2.7 per cent copper within 32m at 0.5 per cent copper and 0.5g/t gold from 28m; and

66m at 0.4g/t gold from surface to end of hole, including 1m at 1.2g/t gold and 1m at 1g/t gold.

RCBR0007:
1m at 1.3 per cent copper within 11m at 0.3 per cent copper from 32m;

18m at 0.4g/t gold from 27m, including 1m at 2.9g/t gold; and

16m at 4.9g/t silver from 26m, including 1m at 32.2g/t silver.

“These are very pleasing results,” Navarre Minerals managing director Geoff McDermott said in the company’s announcement to the Australian Securities Exchange.

“The high-grade secondary copper close to surface over an extensive area is strong evidence for primary porphyry copper mineralisation at depth.

“Broad intercepts of gold with base metal and silver are indicative of an epithermal target, which is commonly found in association with porphyry deposits.

“The tenor of grade intersected in our drilling, the widespread metal endowment and alteration patterns support our belief that we are dealing with a very large hydrothermal mineralising system at Eclipse.”

The results come from the first 7 holes of an 11 hole, RC drill program aimed at confirming a blanket of secondary copper (chalcocite) mineralisation, which Navarre said occurs above widespread copper, gold and zinc mineralisation, which it considers to be associated with a deeper porphyry target.

 

Eclipse prospect resistivity 3D inversion model showing a
porphyry-copper target, two high chargeability IP targets and location
of recent drilling. Source: Company announcement

 

Assay results from the final batch of RC samples are expected later in March.

A number of other sample intervals from within the surface depleted zone have also been dispatched for gold assay, prompted by the wide distribution of high gold grades received in the initial results.

Email: info@navarre.com.au

Website: www.navarre.com.au