Corazon Mining maintains nickel focus amid new acquisitions

THE INSIDE STORY: To simply describe 2012 as hectic for Australian exploration company Corazon Mining (ASX: CZN) would be understating the company’s achievements.

While continuing to develop its Lynn Lake nickel asset in Canada, Corazon took advantage of opportunistic market conditions in 2012 to add new, quality projects to its portfolio.

These included the Canadian Beaucage Lake gold project and the recently-announced option to acquire the copper-gold Top Up Rise (TUR) project in Western Australia.

The new additions complement Corazon’s core focus to advance its Lynn Lake nickel-copper project, which the company believes represents a significant development opportunity.

Lynn Lake is a historical nickel, copper and cobalt mining camp which operated for more than 20 years.

The project’s exploration upside was boosted after Corazon discovered high-grade mineralisation beneath the old EL Mine, which also boasts defined near-surface mineralisation beneficial for any new mining operation.

The EL Mine was one of the highest grade nickel mines in the district, operating between 1954 and 1962 and producing 1.9 million tonnes at 2.5 per cent nickel and 1.15 per cent copper.

Corazon has estimated an interim Inferred Resource for the EL Deposit at Lynne Lake of 1.8 million tonnes at one percent nickel equivalent, including contained metal of 14,000 tonnes nickel, 9,000 tonnes copper and 400 tonnes cobalt at a cut-off grade of 0.6 percent nickel equivalent.

“We’re very much committed to nickel and to our Lynn Lake project in Canada,” Corazon Mining managing director Brett Smith told The Inside Story.

“We have a resource, and we also have significant drill-defined tonnages at surface that aren’t included in the resource, which we consider to hold potential to more than double the resource tonnage.

“We have conceptual open-cut mining studies that identify some 2 to 3 million tonnes of surface material that is not included in our resource.

“These factors will be key to starting up a mining operation in the Lynn Lake area.”

Testament to its commitment to Lynn Lake, Corazon renegotiated its Earn-In and Option agreements to acquire the project and expanded the project area.

The original agreement provided Corazon an option to acquire 100 percent ownership of the project by spending CAD$3 million on exploration and paying CAD$2 million in cash prior to 20th October 2012.

The new deal extended the option period to 20th October 2015, reduced the purchase payment to CAD$1 million and added the South Plug nickel-copper target and Barrington Lake copper deposit to the project.

The South Plug nickel-copper target is located immediately south of Corazon’s land holding and contains a differentiated mafic/ultramafic intrusion similar to those hosting the Lynn Lake mining camp nickel-copper deposits.

The Barrington Lake copper deposit is located 43 kilometres east-northeast of Lynn Lake.

Exploration activities conducted on Barrington Lake in the 1990’s defined copper mineralisation and numerous geophysical anomalies, which have never been subjected to any follow-up drilling.

Most of the historic attention at Barrington Lake focused on an outcropping zone of approximately 107m in strike and 4.6m in width, with an average grade of 2.63 percent copper.

Corazon also added a Canadian gold project to its portfolio in a strategic move to maximise its activities in the Lynn Lake region.

Corazon acquired the Beaucage Lake gold project, located 45km from the Lynn Lake project in a region hosting several one to two million ounce gold deposits.

“The Beaucage Lake acquisition wasn’t one that we deliberately pursued,” Smith explained.

“It was more opportunistic as exploration and investment activity in Canada has not been as enthusiastic as it has been in Australia recently.

“A great number of projects are becoming available and Beaucage Lake was one in which we see great exploration potential.

“It is located nearby to Lynn Lake so it provides us with an additional exploration focus that complements our other Canadian assets.”

Extensive high-grade gold mineralisation has previously been identified at surface at Beaucage Lake over a 7 to 8km strike length.

Corazon is currently compiling all available historical data for the project with a view to applying modern exploration techniques to define drill targets.

“The data accompanying the acquisition dates back to the 1980s and, not being digital, is difficult to reference,” Smith explained.

“As such, we have to get all that old information into new-world order.

“There is a lot of information including numerous high-grade gold drill results that have never been put together and looked at the way we are looking at them.”

In October, Corazon secured an option to earn up to 75 percent of private company Border Exploration, which owns 100 percent of the Top Up Rise project in Western Australia.

The TUR project is located in the Gibson Desert region of north-eastern Western Australia and is prospective for large gold-copper intrusive related deposits, similar in style to Olympic Dam, Prominent Hill and Carapateena.

The primary target identified at TUR is an unexplored gravity anomaly, which presents one of the largest amplitude residual gravity anomalies in Australia.

Exploration work conducted by Border defined the core of the anomaly to be 8km by 4km in area, which is similar in size to Olympic Dam’s geophysical anomaly.

Other exploration work at TUR has been conducted by the Australian Geological Survey Organisation and the Geological Survey of Western Australia.

This work identified a granite intrusive and alteration complex at Mt Webb, which was described as being, “large by Australian standards”, with, “characteristics of world class copper-gold systems”.

The impetus to conduct the deal came from Corazon’s broker, Hartleys, which considered the project to be an ideal joint venture for the two companies.

Smith, a director of Corazon and Border, initially believed the TUR project was more suited to development by a larger company, and was cautious in pursuing the joint venture option.

“Border’s intention was to advance the project as a private entity,” Smith said.

“Border had expressions of interest in the project from other companies, but considered it was too early for such a deal and that Border would be able to inexpensively add a lot of value to the project on its own.

“The success of early stage exploration plays such as De Graca for Sandfire and Nova for Sirius was definitely a catalyst for both Corazon and Border recognising a mutually beneficial joint venture.”

Smith stressed Corazon’s latest raft of acquisitions do not signal a shift away from the company’s chief focus – nickel.

“When you look at our Lynn Lake nickel-copper sulphide project in Canada, it is obvious nickel remains our most valuable metal, but it’s well supported by the early-stage exploration plays,” he said.

“When we extended the option on Lynn Lake we also picked up the Barrington Lake copper project and soon after completed the Beaucage gold project deal.

“These project areas in Canada also include a multitude of VMS targets containing lead, zinc and gold mineralisation.

“The reality is that Corazon’s assets already have numerous prospects containing various metals, so it’s not as if we’re chasing anything new.

“The only really obvious deviation for Corazon as far as the TUR project is concerned is that it is located in Australia, our own backyard.

“We are a small company, conscious of the cash we have and how we can preserve that cash and diligently work all the opportunities within our portfolio.
“2013 will be a very busy year for us.”

Corazon Mining Limited (CZN)
…The Short Story

Level 1
350 Hay Street,
Subiaco  WA  6008

Ph: +61 8 6364 0518   
Fax: +61 8 6210 1872



Clive Jones, Brett Smith, Jonathon Downes, Adrian Byass


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