Gold Production Main Focus at Plutonic Dome

THE INSIDE STORY: Vango Mining (ASX: VAN) is focused on the exploration and development of the company’s 100 per cent-owned Plutonic Dome gold project in Western Australia.

The Plutonic Dome gold project includes 45 granted Mining Leases located over the majority of the Marymia – Plutonic Greenstone Belt, approximately 218 kilometres northeast of Meekatharra in the Midwest mining district of WA.

The project’s main prospect is the Trident deposit, a high-grade gold resource hosted by the ultramafic/mafic package that hosts the nearby five-million-ounce Plutonic deposit being mined by Canadian company Superior Gold, 25 kilometres to the southwest.

Trident currently boasts an Inferred Resources of 2.21 million tonnes at 5.3 grams per tonne gold for 379,000 ounces of gold – but Vango is hungry for more!

Previous drilling at Trident focussed on a very high-grade central zone 120 to 200m below surface, associated with a roll-over or ‘ramp’ in host shear structure.

Vango completed highly successful drilling programs throughout 2017 and 2018 that produced very high-grade gold intersections, confirming and extending the previously defined high-grade gold zone.

These results include:

VTRRCD0013
7 metres at 18.2g/t gold from 218m, including 2.02m at 44g/t gold;

VTRRCD0015
3.76m at 12.8g/t gold from 222.24m, including 1m at 40.5g/t gold;

VTRRCD0016
11.48m at 11.5g/t gold from 159m, including 4m at 26.1g/t gold;

VTRRCD0007
6m at 15.37g/t gold from 198m, including 4m at 22.5g/t gold; and

Three intersections encountered within a 71m thick mineralised zone in VTRRCD0008 of:
10m at 3.7g/t gold from 132m, including 1m at 21.9g/t gold and 2m at 5.2g/t gold;
3m at 15.3g/t gold from 161m, including 1.05m at 40.3g/t gold; and
7.1m at 5.2g/t gold from 195.9m, including 2.1m at 12.4g/t gold and 2m at 4.6g/t gold.

“Drilling that had been done in the past had not been done to any great depth,” Vango Mining executive chairman Bruce McInnes told The Resources Roadhouse.

“We are probably the first to drill to any significant depth at Trident, and the step-out hole we are currently drilling is targeting a depth of approximately 600 metres and as we go deeper we anticipate intersecting repetitions of the high-grade mineralisation we have already encountered.

“We are drilling these deep holes at various targeted points to see what is beneath the known mineralisation at 250 metres.

“We know we have very good grades at the upper level, but if there is another underlying Resource there, obviously that would make it even better for us in terms of the potential scale of the deposit and the mining approach we may adopt.

“Trident we have always referred to as ‘the crown jewel’ of the company, which is proving to be a prophetic declaration as we believe it is going to be a significant and impressive asset just on its own.”

Vango Resources is by no means a newcomer to the region having established a Farm-in and JV agreement with Dampier Gold back in 2014.

“It took us two years to establish our 60 per cent earn-in to the Plutonic Dome area,” McInnes said.

“We then finalised negotiations for the purchase of the remaining 40 per cent from Dampier in 2016.”

Although the area had not been mined for many years, Vango recognised the potential for it to support future gold mining operations, be they underground or open pit.

The company’s initial thoughts were to establish a small gold mining operation then toll-treating the ore through a nearby mill – a strategy that would make good money, but a rethink by the company realised Plutonic Dome held potential to become a much bigger earner by making it one large standalone high-grade operation.

The change of strategy renewed the sharpness of the company’s focus on mining high-grade ore to be put through its own processing plant.

Once in production cashflow will fund ongoing exploration to find a lot more gold to keep the operation going.

“The Resources and Reserves we will upgrade using the results from drilling programs, particularly from Trident where we will be mostly focused again this year,” McInnes said.

“We aim to increase Resources to around one million ounces, and at the same time we will be using the results to glean further information for the plant construction.

“We don’t anticipate it will be a large plant initially, most likely around 250,000 to 300,000 tonnes per annum, with the ability to increase capacity as time goes on.

“It’s all about getting cashflow moving and then to use that cashflow to fund continuing drilling programs, and to continue our development as a gold producer.

“This company wants to be producing gold as soon as possible.”

Vango is now drilling to test a series of high‐grade gold targets at Trident as well as at the Cinnamon deposit located in the central part of the Plutonic Dome project area.

Three deeper pre‐collared diamond drillholes are testing for down‐dip repeats of the Trident flexure or ‘ramp’ structure that hosts most of the high‐grade gold mineralisation intersected to date at Trident.

This drilling will be targeting the shallow dipping ultramafic contact below the over‐thrust granite gneiss on 400m step‐outs from the high‐grade core zone while also testing the western part of the deposit, where the Trident gold mineralisation extends, up‐plunge, to shallow depth.

Mineralisation at the Cinnamon deposit is contained within a conglomerate, associated with the contact between a mafic‐ volcaniclastic/conglomerate footwall and felsic‐volcaniclastic/conglomerate hangingwall.

Earlier work carried out by Dampier Gold at Cinnamon showed the gold mineralisation intensifying where coarse-grained conglomerates are intersected by several interpreted cross cutting faults.

Dampier established a resource model for Cinnamon in 2011 showing the resource zone extending to over 400m in strike and open at depth below 200m.

Predominantly RC drilling intersections released by Dampier in 2011 demonstrate it potential to be, like Trident, an economic deposit in its own right.

Historic high grade drilling results from Cinnamon include:

BDRC0003
19m at 6.85g/t gold from 132m, including 11m at 10.57g/t gold

BDRC0430
24m at 4.75g/t gold from 146m, including 12m at 7.64g/t gold and

BDRC0365
39m at 4.56g/t gold from 76m, including 10m at 12.72g/t gold.

Vango is drilling two diamond holes into the main mineralised zones at Cinnamon to verify the previous RC drilling intersections and enhance its geological understanding of the deposit.

This will be followed by a more extensive drilling program to potentially define and extend the thick, conglomerate hosted, mineralised zones.

Cinnamon is being tested as a high‐priority, additional resource target that could potentially support the new strategy for a stand‐alone processing operation and provide an early open pit option.

“Our technical team is working on establishing which target, Trident or Cinnamon, should be our starting point,” McInnes said.

“At Cinnamon the targeted drilling will be looking to identify the shape of the ore body, because should it emerge as we believe, it will be an ideal starter open pit.

“That is exactly what we are looking for, a nice easy surface area that has considerable tonnage with good grades.

“We have completed all-in costings on surface mining using the Dampier Mining 2011 Resource grades.

“The planned drilling will tell us whether the grades t around Cinnamon could make it our obvious first target.”

 

Vango Mining Ltd. (ASX: VAN)
…The Short Story

HEAD OFFICE
Level 39, Suite 3
259 George Street
Sydney NSW 2000

Ph: +61 2 8278 9942

Email: info@vangomining.com
Web: www.vangomining.com

DIRECTORS
Bruce McInnes, Sean Zhou, Carol Zhang

 

Unlocking Slate Dam Gold Potential

THE INSIDE STORY: Aruma Resources (ASX: AAJ) has made considerable progress in rapid time as it targets large scale sediment- hosted gold deposits throughout its Eastern Goldfields project area in Western Australia.

Aruma Resources’ 100 per cent-owned Slate Dam project is located 40 kilometres from the home of WA gold mining, Kalgoorlie.

The company recently expanded the Slate Dam project area and consolidated ground holding via the 100 per cent acquisition of the Trojan gold project (ML25/104) from Westgold Resources (ASX: WGX).

To the north, Aruma has the Beowulf gold project, which it pegged in 2017, covering 490 square kilometres of gold prospective greenstone sediments.

The company’s present focus is Slate Dam, which it believes has comparisons to the world class Invincible gold deposit, being mined by global gold major Gold Fields at its nearby St Ives operation.

Determined to increase the proven gold mineralisation footprint at Slate Dam, Aruma has had drill rigs constantly spinning on the project since late last year, completing 63 RC holes for 6,774 metres in two phases of drilling which have produced a raft of encouraging results.

A Phase 2 drilling program was undertaken early this year at Slate Dam consisting 23 holes of reverse circulation (RC) drilling for a total of 2,778 metres to follow up results achieved from the first phase of drilling that defined what are interpreted as two major, tabular 20m thick shoots dipping 30 degrees to the west.

The Phase 2 drilling program did what it was asked in expanding the footprint of the gold mineralised system at the Slate Dam Project.

The drilling also confirmed the sediment hosted gold mineralised shoots that had been delineated by the Phase 1 drilling.

Assays showed the drilling to have encountered multiple intersections of anomalous gold mineralisation, with 12 of the 23 holes drilled intersecting gold mineralisation.

Aruma’s second phase program expanded the Slate Dam gold mineralised system to a total distance of at least four kilometres (from the north-west to the south east) – via the delineation a new gold shoot, christened S2.

“We took a great deal of encouragement from that second Phase of drilling at Slate Dam,” Aruma Resources managing director Peter Schwann told The Resources Roadhouse.

“While we continue to pursue further higher-grade mineralisation and the source of what we believe to be a significant new gold system at Slate Dam, our first two drill programs completed in the space of just six months, have taken the project from concept to validation and increased its potential to host significant sediment-hosted gold deposits.

“Importantly, the drilling continued to intersect gold mineralisation over a large portion of our initial target area, providing confidence to immediately commence a next round of drilling to look for extensions and repetitions, plus higher-grade zones.”

Aruma wasted little time getting back out on the ground and on 1 June kicked of its third phase of drilling at Slate Dam.

During this round, Aruma targeted the completion of approximately 3,000m of RC drilling across a total of 25 holes up to depths of 150m.

Recent Phase 3 drilling targeted priority areas to the north and south of the currently drill defined shoots at Slate Dam designed to extend the current gold mineralised system while hoping to identify repetitions of the mineralised system to the east and to the west of the drill defined area.

At the time of writing, Aruma had received assay results from the first eight holes (holes SDRC64 to 71) of this program, which continued strengthen the company’s exploration model for the project to host sediment-hosted gold deposits.

The Phase 3 drilling intersected widespread shallow gold mineralisation with seven out of the eight holes assayed intersecting anomalous gold mineralisation.

Of importance was that the drilling discovered a new gold trend to the east of the current drill defined area at Slate Dam, with a highlight intersection of 6m at 2.43g/t gold from 15m returned from within a broader zone of 15m at 1.1g/t gold (in hole SDRC68).

“The first assay results in the Phase 3 drilling returned multiple broad zones of gold mineralisation plus further strong grades,” Schwann said.

“The significant gold intersection in hole SDRC68 is of substantial importance as it duplicates the similar intersection of 7 metres at 2.1 grams per tonne gold in the nearby drill hole SDRC20 reported in our first phase of drilling.

“This is an important result, as it confirmed the presence of gold mineralisation and increasing grades to the east at the project, which was a key objective of this phase of drilling.

“We will now seek to extend these two near surface gold zones along strike and look for more repetitions to the east in the remaining holes in the Phase 3 program.”

Aruma’s drilling to date at Slate Dam has focused on a major, high tenor gold anomaly measuring 200ppb gold and covering an area of seven square kilometres, in the north of the project – and it will continue to prove up the gold system at this target.

In parallel, the company is about to embark on a detailed project-wide targeting program over the entire 255 square kilometre Slate Dam project area, and the Beowulf project, to define the next batch of priority drill targets.

“This is hugely exciting for the company, Schwann enthused.

“To date we have drilled one priority target at Slate Dam, which has resulted in the discovery of a significant sediment-hosted gold system.

“Now we are now expanding our focus to take in the in the entire 750 square kilometres of tenements at Slate Dam and Beowulf, with the aim of delivering multiple, new high priority drill targets.”

This work is already underway with a comprehensive data base for all the projects currently being constructed, utilising the extensive amount of available data on the projects.

Then the company will then apply magnetic surveys and aerial electromagnetic (EM) programs to generate and rank priority targets for the next phases of drilling.

Current timelines have the company ready to drill to first of the newly ranked targets in the final quarter of calendar 2018.

As part of this project-wide approach, Aruma may also pursue the opportunity to expand the known resources at Triton, which currently stand at 2.8 million tonnes at 1.61g/t gold for 144,800 ounces of gold (at a 0.7g/t cut‐off).

Schwann brings a keen sense of purpose and intent to the work ahead of the company.

“We have two outstanding greenstone belt projects – Slate Dam and Beowulf – in a highly sort after mineral district in the Eastern Goldfields, where the likes of AngloGold Ashanti, Northern Star and Silver Lake all have operations,” he explains.

“Our initial targeted drilling has delivered immediate success and we will continue advance that as a core priority, and that along with the opportunity to discover and develop district scale gold deposits makes the outlook for Aruma very exciting.

“If you look at Gold Fields Invincible Deposit, it was taken from discovery holes being drilled in 2012 to now being a world class gold deposit, which hosts more than three million ounces of gold.

“We believe the potential discovery upside for us is enormous, and we have a clear focus and plan in place to unlock this.”

 

Aruma Resources Limited (ASX: AAJ)
…The Short Story

HEAD OFFICE
Level 1
6 Thelma St
West Perth WA 6005

Ph: +61 3 9321 0177

Email: info@arumaresources.com
Web: www.arumaresources.com

DIRECTORS
Paul Boyatzis, Peter Schwann, Mark Elliott

 

Abra Mine Shaping as Lead Heavyweight

THE INSIDE STORY: Perth-based exploration play, Galena Mining (ASX: G1A) is making rapid progress developing the company’s 100 per cent-owned Abra lead-silver project in Western Australia.

The Abra lead-silver project is part of the company’s broader Abra base metals project, a regional tenement package in the Gascoyne region of WA that Galena believes holds potential for copper-gold deposits as well as further lead-zinc-silver deposits.

“We listed last year with the development of the Abra lead-silver deposit in Western Australia as our primary focus,” Galena Mining chief executive officer Ed Turner told The Resources Roadhouse.

“That is our focus and we are going flat out as we strongly believe that lead is not dead.

“The past ten years the London Metal Exchange (LME) lead stocks have been depleted due to not enough supply hitting the market.

“As a result, the price of lead has risen significantly during that time.”

Turner’s optimism and the company’s timing for the development of the Abra mine seems well placed as both coincide with a strong outlook for lead.

Although having been mined and used since people started digging materials out of the ground and using them to enhance their lifestyles, lead, just as some of its peer metals, has enjoyed renewed popularity.

Modern vehicles – be they electric or old school combustion engine driven – make up the largest use of lead in manufacture of batteries, which accounts for around 80 per cent of modern lead usage.

The remaining 20 per cent of applications include other traditional uses, such as weights and ballast, underwater cable sheathing, solder, casting alloys, chemical compounds, including PVC plastics and pigments, ammunition, glassware and radiation protection.

As technology advances, so too are expected uses for lead in the form of large storage batteries used for load-levelling of electrical power and in electric vehicles.

The growing market for electric bikes, in China alone, has led to an increase in demand for lead to make batteries for e-bikes.

Galena Mining recently released a Scoping Study for Abra that confirmed the lead-silver project as an economically and technically robust opportunity, with potential to become a long-life, high margin West Australian lead-silver producer.

The study delivered a pleasing economic outcome for the project by demonstrating that on pre-tax post royalties it can deliver a Base Case Net Present Value (NPV) of $394 million with an Internal Rate of Return (IRR) of 61 per cent (based on long term lead price of US$0.95 per pound, silver price of US$16.50 per ounce and USD: AUD of $0.75).

The study determined an initial mine life of 11 years, with opportunities identified to extend beyond 11 years, operating an annual throughput of one million tonnes per annum, with average grades of 9.7 per cent lead and 15g/t silver, producing 91,000 tonnes of lead and 450,000 tonnes of silver annually.

Processing of the ore will comprise conventional, off the shelf equipment, including crushing, grinding and two stages of conventional flotation and filtration to produce a lead-silver concentrate.

The processing facility construction cost is estimated at $66 million including $6 million of contingency costs.

Galena anticipates construction to commence during Q3 in 2019, with a 15-month time frame for commissioning.

The planned mining method will be via an underground mine accessed by a decline.

Mining activity is expected to commence early 2021 with the underground extraction undertaken through sublevel open stoping mining and partly by room and pillar mining, which in concert with paste filling high value stopes, will enable maximum extraction of the orebody.

“Our location in the Gascoyne region of Western Australia, not too far from the De Grussa mine, is advantageous, as we are looking at trucking the concentrate product,” Turner said.

“Should we produce one million tonnes per year from underground that will translate into around 130,000 tonnes of concentrate that we can truck down to Geraldton Port where they already export a lead concentrate product from Golden Grove and have done for some 20 years.

“We have all the permits in place for that.”

Average life of mine cash (C1) costs came in at US$0.46 per pound and total costs (C3) costs of US$0.56 per pound, including all royalties, making the proposed mine a high-margin, strongly cash generative operation.

Current market conditions and a favourable outlook for lead indicate strong upward movement in demand and pricing.

The lead price has averaged US$0.97 per pound over the last 10 years and peaking at US$1.14 per pound during June 2018.

The study was based on a lead price assumption of US$0.95 per pound.

Average LOM revenues are estimated to hit $251 million with operating cash flows of $104 million per year.

Pre-production CAPEX is estimated to be $153 million with a payback period of approximately 18 months.

The study incorporated a JORC code 2012-compliant Resource the company released in March this year, including:

Indicated Resource of 5.3 million tonnes at 10.6 per cent lead and 28 grams per tonne silver and an Inferred Resource of 5.9 million tonnes at 9.7 per cent lead and 29g/t silver (using a 7.5 per cent lead Pb cut-off) for a combined 11.2 million tonnes at 10.1 per cent lead and 28g/t silver.

This sits within a larger Indicated Resource of 13.2 million tonnes at 7.9 per cent lead and 19g/t silver and an Inferred Resource of 23.5 million tonnes at 6.9 per cent lead and 17g/t silver (using a 5 per cent lead cut-off) for a combined 36.6 million tonnes at 7.3 per cent lead and 18g/t silver.

“We proved up this high-grade Resource thanks to the amount of drilling we were quickly able to complete after listing just late last year,” Turner said.

“We drilled 8,000 metres of diamond core drilling between September and December 2017, which enabled us to establish that Resource estimate of 11 million tonnes at 10 per cent lead making Abra the highest-grade lead deposit in Australia.”

The Scoping Study results followed metallurgical testwork that demonstrated very high metal recoveries could be achieved at the project to produce an exceptionally high-grade and clean lead-silver concentrate.

The metallurgy results exceed the company’s expectations and what it had modelled previously.

Composite samples delivered lead concentrate grades ranging from 69 per cent to 81 per cent (averaging 74.5 per cent) with recoveries between 94 and 96 per cent (averaging 95 per cent).

Being able to produce such high lead grades in concentrate enables Galena to increase metallurgical recoveries above 96 per cent if it so desired while maintaining an extremely high lead-in-concentrate product.

“The exceptionally high-grade and clean lead-silver concentrate achieved at very high recovery grades should be viewed as having de-risked the metallurgy component of the project,” Turner said.

“It shows we are able to produce a very highly saleable product and a lot of smelters in China and Europe should be very keen to get their hands on it.”

For now, Galena’s next steps involve completing a Pre-Feasibility by September 2018 and completing further infill drilling to convert more JORC Inferred Resource material to the higher confidence classification of Indicated.

The company is also carrying out marketing exercises with potential buyers (i.e. smelters and traders) to obtain contract terms for Abra’s lead concentrate.

 

Galena Mining Limited (ASX: G1A)
… The Short Story

HEAD OFFICE
Unit 5
254 Churchill Ave
Subiaco WA 6008

Ph: +61 8 6166 3750

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

DIRECTORS
Adrian Byass, Jonathan Downes, Oliver Cairns, Tim Morrison

 

Conglomerate Gold Search Moves to Queensland

THE INSIDE STORY: Impact Minerals (ASX: IPT) has flagged a steady flow of news to emanate from the company’s portfolio of 100 per cent-owned gold and base metal projects across Australia.

Impact Minerals is running an aggressive exploration program encapsulating drilling for the Commonwealth gold-silver-base metal project in New South Wales, the Clermont epithermal gold project in central Queensland and the Mulga Tank gold and nickel project in Western Australia.

Other work will involve initial bulk sampling from the advanced Blackridge conglomerate gold project in Queensland, over which Impact acquired an option to earn a 95 per cent stake from Rock Solid Holdings Pty Ltd.

The project has a history of about 185,000 ounces of previous gold production from small shafts and related underground workings that are close to Impact’s Clermont project.

Impact added an adjacent 100 per cent-owned exploration licence taking the total land area to 91 square kilometres to form the Blackridge gold project.

Impact’s interest in conglomerate-hosted gold projects is nothing new and the acquisition of the Blackridge project follows a search the company carried out for such projects located outside of the Pilbara region of Western Australia.

In 2017, Impact picked up Pilbara Exploration Licences considered prospective for Witwatersrand-style conglomerate-hosted gold on the back of the Purdy’s Reward discovery by Artemis Resources (ASX: ARV), leading to its Joint Venture with Canadian company Novo Resources Corporation.

Earlier this year, Impact was approached by TSXV-listed Pacton Gold Incorporated, which made the company an offer described to The Resources Roadhouse by managing director Dr Mike Jones as being, “to good to refuse”.

Pacton Gold paid Impact CAD$350,000 cash and 2.125 million shares in Pacton (a value at the time of $1.7 million) for 100 per cent of the Pilbara gold project.

Pacton will pay CAD$500,000 cash for discovery of an Inferred Resource greater than 250,000 ounces of gold and Impact retains a two per cent Net Smelter Return.

While some industry watchers may have been surprised by Impact’s recent exchanges, the company remains confident of the potential for the discovery of another major conglomerate-hosted gold deposit in Australia.

“The magnitude of the discovery made by Novo Resources Corporation and Artemis Resources in the Pilbara is still poorly understood by most,” Jones lamented.

“The Black Ridge project now gives us some 25 kilometres of strike and about 37 square kilometres of basal conglomerate in Permian-aged rocks.

“There has been previous work done on the project, including drilling, but we feel very strongly – as Novo has shown in the Pilbara, and the reason that we got into the project – that evidence exists of a phenomenon called ‘the nugget effect’,” Jones said.

“Because the gold is locked up in very coarse nuggets with not much gold in between them, you must get your sample density right, to get an accurate estimate of how much gold is in there.

“This is the struggle that Novo is having.

“We are going to piggy back off the work they have done in the past 12 months, because they have already made significant breakthroughs in how to sample these deposits.

“Given the advanced nature of our new Blackridge gold project, it is only appropriate that we focus our conglomerate-gold exploration activities there whilst still retaining significant upside in the Pilbara in the form of a valuable shareholding in Pacton, a potential Discovery Bonus and a royalty.”

Blackridge is just one part of the company’s exploration push this year.

A strategic review of its projects identified eleven of the most prospective targets for gold and other metals across its portfolio for drill testing.

The Commonwealth and Clermont projects will be first to undergo treatment, while Mulga Tank and Blackridge will receive attention around September to October.

At Commonwealth, Impact has all statutory approvals in place to commence follow up drilling at the Silica Hill prospect where gold and very high-grade silver intercepts were returned from previously.

Recent drilling at Silica Hill intersected two zones of strong silica-sulphide alteration with anomalous gold and silver values over a combined thickness of more than 200m down hole including a high-grade gold and silver vein within an upper zone indicating significant potential for more veins nearby to the south.

The upper zone in Hole CMIPT72 returned:
46 metres at 0.04 grams per tonne gold and 5g/t silver from 200m downhole, including 0.4m at 2.5g/t gold and 327g/t silver from 257.2m.

The lower zone returned:
67m at 0.3g/t gold and 1g/t silver from 402m downhole.

“Silica Hill is a significant discovery we have had over the past few years at Commonwealth where there is an existing Resource” Jones said.

“Silica is a form of quartz and the project is called Silica Hill because this is a very large lump of resistive quartz and sulphide – it is one of the largest alteration systems I have seen, and we encountered some very high-grade veins close to surface and we are going to be drilling, at depth, below those.”

There is currently a modest Inferred Resource of good grade near surface in place at Commonwealth of 720,000 tonnes at 2.8g/t gold, 48g/t silver, 1.5 per cent zinc and 0.6 per cent lead.

Impact is keen to get in and demonstrate there are more tonnes to add to Silica Hill.

Another aspect to Silica Hill is that it hosts several unusual red minerals collectively called ruby silver and it is the only deposit in Australia that has it, certainly at the sort of quantities demonstrated to date.

Ruby silver is an extremely unusual mineral that is found in many epithermal systems around the world – ones that have some bonanza grades.

“We have intersected hints of some really good gold where the ruby silver is present, such as one metre at 21 grams per tonne, but we are also getting very high-grades of silver of 680 to 1000 grams per tonne,” Jones said.

“They were our discovery holes, but in the latest drilling we encountered around the 4000 to 6000 grams per tonne mark.

“Admittedly, these were over narrow veins, but it is indicating this system is producing bonanza results in places.”

Impact’s exploration interest at the Clermont project in the prolific epithermal gold-silver belt of the Drummond Basin was reinvigorated following a strategic review of the project.

An IP survey identified targets for drill testing after completion of the Commonwealth drilling over two key prospects, Retro and Retro-Extended, at the northern end of the Retro Fault System, a 10 km trend of gold-silver and base metal mineralisation.

“We have actually had this project for 12 years,” Jones explained.

“We have hung on to it through thick and thin, and we are finally in a position where we have the cash on hand to give it the attention we have always considered it deserved.

“The recent IP work we completed on Retro is a very good method of identifying quartz veins.

“What we thought was a discontinuous set of veins turns out to be quite a major zone of multiple veins spread out over six kilometres.

“There are multiple drill intercepts recorded that all need to be followed up and we have a major drill program ready to commence. Its going to be an exciting six months!”

 

Impact Minerals (ASX: IPT)
…The short story

HEAD OFFICE
26 Richardson Street
West Perth WA 6005

Ph: +61 (8) 6454 6666

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

DIRECTORS
Peter Unsworth, Dr Mike Jones, Paul Ingram, Markus Elsasser, Eamon Hannon

 

Production On Track and On The Rise

THE INSIDE STORY: Blackham Resources (ASX: BLK) is a gold producer that holds 100 per cent of the large Matilda-Wiluna gold project in the northern goldfields of Western Australia.

Production at the project commenced in October 2016, which hosts four large gold systems that currently has 6.5 million ounces in Resources at 1.2 million Reserves.

The company’s 6.5 million ounce Resource, of which some 50 per cent sits in the Indicated category with an average grade over three grams per tonne gold, is what makes Blackham stand apart from its peers.

Blackham is in a unique position – for a company with a market cap of less than $90 million, it commands an entire gold field right at the northern end of the Norseman-Kalgoorlie-Wiluna Belt where it controls over 50 kilometres of strike in a gold field that has, historically, produced over 4.4 million ounces of gold.

“Blackham Resources spent 10 years as an explorer and in the past 18 months we have been in production,” Blackham Resources executive chairman Milan Jerkovic told The Resources Roadhouse.

“Cash flow from production had originally been coming a lot slower than what we would have liked, however from the March quarter of 2018, we have turned that around by producing over 20,000 ounces of gold at below $1100 All In Sustaining Costs.

“The outlook is positive, and we believe we can maintain an 80,000 per annum rate without any additional capital being put into the operation.”

Blackham’s gold production star has been on the rise of late and the company underlined that by producing another record quarter of gold production in March of 7,419 ounces.

This represented an 11 per cent increase on the previous record month recorded in February of 6,713 ounces.

The March result included milling of 165,000 tonnes of ore with improved mill feed grades hitting 1.6 grams per tonne gold, compared to February’s 1.5g/t gold.

The figures contributed to a new record for quarterly gold production of 20,631 ounces, a marked 38 per cent increase on the December 2017 quarter, which produced 14,922 ounces.

“That we have been able to improve our gold production profile on a month-by-month basis demonstrates that we really have the project under control,” Jerkovic said.

“Even though the project has in recent times been much-maligned, the truth is that it hasn’t really received the attention it has deserved over the last ten years.

“Our approach to operating at Wiluna is significantly different to how previous operators have gone about things.

“We have now started focusing on the free-milling ores, primarily coming out of the Matilda mine and we will continue to mine that for the bulk of FY19.

“We have commenced mining at Golden Age in the underground part of the operation, which is a high-grade underground operation.”

Recent drilling undertaken from March to May 2018 consisted 19 surface RC holes for 2,117m and 30 underground diamond holes for 2,331m focused on extensions to the Golden Age deposit.

Results achieved from the high-grade free milling Golden Age orebody substantially extended mineralisation beyond current mining areas.

Drilling of the Golden Age lower extensions located mineralisation 150 to 300m below the current mining levels, returning:

GARD0033
6.9 metres at 15.5 grams per tonne gold; and

GARD0036
2m at 11.8 g/t gold.

Surface drilling at Golden Age North intersected high-grade shallower mineralisation amenable to both open pit and underground mining.

The March quarter 38 per cent increase in production was achieved primarily from the company gaining access to higher grade zones in the M4 and Galaxy open pits late in the December 2017 quarter.

“The bulk of our feed is coming from the Matilda mine and we are producing gold from an average grade of around 1.5 grams per tonne,” Jerkovic explained.

“We finished mining the M4 pit this quarter and we have now moved in to mining ore from the M1 and M2 pits.”

Blackham is currently evaluating the economics of the remaining Golden Age Underground Resource of 0.9 million tonnes at 4.5g/t gold for 129 ounces.

Studies so far have added a further 24,600 tonnes at 6g/t gold for 4,700 ounces of production targeted for between July and December 2018.

Reserve definition drilling will continue as Blackham seeks to increase its current 15 million tonnes at 2.5g/t gold for 1.2 million ounces gold reserves by converting more of the 6.5 million ounce gold Resources.

A recently completed free milling drill program extended shallow oxide and transitional mineralisation close to the Wiluna CIL plant.

The drilling encountered broad zones of shallow high-grade mineralisation intersected surrounding the modelled East-West pit cutback, in Blackham’s newly discovered cross structure zones that were not mined by previous operators.

Better intercepts included:

WURC0622
20 metres at 4.84 grams per tonne gold from 5m, including 9m at 8.76g/t gold;

WURC0623
19m at 3.52g/t gold from 3m incl. 1m at 5.27g/t gold and 3m at 5.62g/t gold and 2m at 10.63g/t gold;

WURC0619
22m at 2.97g/t gold from 11m, including 7m at 5.90g/t gold;

WURC0627
14m at 4.23g/t gold from 16m, including 7m at 7.66g/t gold;

WURC0617
22m at 2.38g/t gold from 3m, including 1m at 7.10g/t gold and 1m at 7.76g/t gold and 1m at 6.48g/t gold;

WURC0630
13m at 3.58g/t gold from 48m, including 3m at 5.30g/t gold;

WURC0624
15m at 2.70g/t gold from 32m, including 1m at 5.89g/t gold and 1m at 6.95g/t gold; and

WURC0625
19m at 2.00g/t gold from 40m;

Infill drilling at the Happy Jack pit has delivered further high-grade oxide and transitional intersections and enhanced confidence in the resource model interpretation.

The potential for increased sulphide resources was also highlighted by several holes that extended into the deeper fresh rock.

Better results included:

WURC0598
19m at 6.36g/t gold from 35m;

WURC0585
7m at 7.62g/t gold from 35m and 9m at 1.99g/t gold from 111m;

WURC0603
8m at 4.65g/t gold from 112m and 10m at 7.93g/t gold from 136m;

WURC0589
12m at 2.29g/t gold from 122m, 3m at 4.97g/t gold from 138m and 9m at 6.83g/t gold from 147m; and

WURC0602
8m at 2.30g/t gold from 2m, 23m at 1.59g/t gold from 18m and 20m at 8.70g/t gold from 72m.

Drilling was also completed around the Adelaide, Moonlight, Essex and Bulletin pits with moderate tenor results received.

Cutbacks on these pits also appear viable and are being assessed for future mining.

Blackham plans further drilling to close out open-pit mineralisation ahead of finalising mine designs for the free milling starter pits.

The next resources and reserves update will incorporate these results and is expected to be completed in the September quarter.

“We continue to spend around $6 million on exploration and Reserve growth, particularly on our free milling ore sources,” Jerkovic said.

“We have a lot of advanced brownfield opportunities and we have been drilling them significantly.

“We are now producing strong cash flow – it took a while for that to come, but back in the December quarter last year was a tough quarter for the company with a lack of ore being supplied to the plant.

“We now have our mine sequencing back on track and the plant is running nicely and we are feeding it our high-grade ore and producing strong cash flows.”

 

Blackham Resources Limited (ASX: BLK)
… The Short Story

HEAD OFFICE
Level 2, 38 Richardson St
West Perth WA 6005

Ph: +61 8 9322 6418

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

DIRECTORS
Milan Jerkovic, Bryan Dixon, Greg Miles, Greg Fitzgerald

 

Cassini Resources Contributing to Exploration Advance

THE INSIDE STORY: According to the Australian Bureau of Statistics, there was a 4.9 per cent rise in Australia-wide total mineral exploration expenditure.

In monetary terms that equates to $23 million, resulting in a spend of $498.5 million in the March quarter 2018.

The largest contribution, up four per cent, came from Western Australia, which spent $11.5 million.

ABS’s current quarter estimate is 24.4 per cent higher than its March quarter 2017 estimate.

More money means more drilling, which is a good indication the junior exploration end of town is living up to its job description.

“The trend estimate for metres drilled rose 2.4 per cent in the March quarter 2018,” ABS said in a recent report.

“The current quarter estimate is 13.5 per cent higher than the March quarter 2017 estimate.

“The seasonally adjusted estimate for metres drilled rose 9.4 per cent in the March quarter 2018.”

Although it was a late comer to the battery metal party, nickel has consolidated a place as a potential major contributor to the development of electronic gadgetry.

In the March 2018 Resources and Energy Quarterly from the Office of the Chief Economist, it was noted that, “Nickel prices are expected to remain high during 2018, before easing off as growth in the production of stainless steel slows and supply of pig-iron nickel rises.

The Chief Economist reported that the rising prices resulted in nickel and cobalt exploration expenditure almost tripling year-on-year, to reach $48.9 million in the December 2017 quarter.

Most of this expenditure, once again, came from Western Australia.

 

Cassini Resources (ASX: CZI) is contributing to these figures by operating a fleet of drill rigs as it progresses its West Musgrave nickel-copper project (WMP) through Pre-Feasibility while commencing exploration on its suite of 100 per cent-owned base and precious metal prospects.

Cassini’s stated objective is to advance the WMP and identify additional high-grade mineralisation to supplement potential ore feed and there are five drill rigs spinning to complete a regional exploration program.

Of five rigs, two are focused on exploration. with the other two carrying out a resource drillout and the final rig is drilling water bores.

The program is funded as part of the Earn-in/JV Agreement Cassini has in place with leading resources company OZ Minerals (ASX: OZL).

OZ Minerals has demonstrated its affection for the WMP from the get go and recently committed to the next stage of the earn-in, under which it will spend $19 million to earn a 51 per cent interest.

OZ will eventually move to a 70 per cent interest in the project through total expenditure of $36 million over a staged 3½ year period, of which there is just over two years remaining.

Cassini remains free carried during the earn-in period, through to a decision to mine.

“OZ Minerals’ present and future commitment to the WMP actually addresses a couple of very important aspects of the entire project,” Cassini Resources managing director Richard Bevan told The Resources Roadhouse.

“It speaks to the amount of investment that OZ Minerals is making to be part of the WMP and the level of importance and priority they place on what they are doing.

“They are very positive about the project, obviously, and they are doing everything they can to progress it through this Study phase as quickly as possible.

“They are allocating a lot of resources, consisting of time, money and people to achieve that.”

The JV is keen to rapidly progress the WMP through the Pre-Feasibility Stage, with the drilling rigs collecting metallurgical samples, completing resource infill at Nebo-Babel, drilling water bores as well as the regional exploration.

“The regional exploration program is now underway at the Yappsu and One Tree Hill prospects,” Bevan explained.

“There is also exploration underway aiming to extend the current Resource at the project around Babel and Nebo that represent opportunities to add some high-grade mineralised extension to the existing Resource

“Our exploration strategy has been around identifying additional high-grade Resources that we can add into the mine plan.

“All of these prospects we are now targeting represent great opportunities to do that.”

Cassini has identified priority WMP targets with the potential for providing high-grade nickel and/or copper mineralisation.

The immediate priorities for the 2018 program will be to follow-up the One Tree Hill discovery made in 2017, the Yappsu prospect, and further drilling at the Succoth copper deposit.

One of the harder operational aspects many smaller exploration/development resources companies encounter is getting market observers to fully understand the depth and range of activity being undertaken across their respective projects.

Cassini is eager to address this situation.

“The WMP is continuing strongly,” Bevan said.

“We have more than 40 people on site and five drill rigs operating, so there is quite a significant amount of work being carried out at present around the Pre-Feasibility Study and regional exploration.

“There is a 40,000 metre in-fill drilling program underway to contribute to a Resource estimate as well as a five to six thousand metre metallurgical program that is expected to drive the next round of processing and recovery testing.

“Throw in the extra exploration activity on top of it and there is plenty happening.”

Cassini has commenced exploration on the company’s wholly-owned West Arunta project where drilling targets have been generated on the back of Airborne Electromagnetic (AEM) survey, the company had flown in March 2018. Drilling is expected to commence in late June.

The West Arunta is an early stage sedimentary zinc exploration project in northern WA.

Independent contractor NRG flew its helicopter supported Xcite system, over the extent of the prospective basin, for a total of over 1,000-line kilometres to improve its understanding beyond previous geological interpretation, which was limited to a magnetic survey that had been processed to its limits, broad-spaced soil geochemistry and the very sparse geological data gathered from outcrop and drilling in 2016.

The AEM survey mapped stratigraphic horizons within the sedimentary basin identifying the Dione Horizon, which has been interpreted as a possible discrete, sulphide or graphite-rich and perhaps locally mineralised stratigraphic unit within the broader Bitter Springs Formation.

These are the type of horizons that are usually favourable targets for base metal mineralisation.

Cassini now has four datasets to support the conceptual targets at the Janus and Mimas prospects.

At the time of writing a drill program, designed to test the Janus and Mimas prospects, consisting of approximately 2,000 metres is planned, paid in part by funding provided by the WA Government’s Exploration Incentive Scheme.

“It’s worth noting that the Dione Horizon is not uniformly conductive but rather, is more conductive close to the major northeast trending fault corridor that defines the basin margin in this area,” Bevan said.

“This is consistent with the conductivity relating to hydrothermal sulphides controlled by basin margin permeability.

“The 2016 drilling did not test the Dione Horizon, but instead focussed on the gossanous outcrops which now appear to have resulted by ‘down-dip’ lateral dispersion through the weathering profile.

“Including the AEM data means the conceptual targets at Mimas and Janus are now each supported by several anomalous features drawn from independent data sets and are clearly the highest priority targets for future drilling.”

 

Cassini Resources Limited (ASX: CZI)
…The Short Story

HEAD OFFICE
10 Richardson Street
West Perth WA 6005

Phone: +61 8 6164 8900

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

DIRECTORS
Mike Young, Richard Bevan, Dr Jon Hronsky, Phil Warren, Greg Miles

 

Thunderbird Zircon Offtake Done: Ilmenite 50 per cent Complete

THE INSIDE STORY: Sheffield Resources (ASX: SFX) is progressing development of the company’s 100 per cent-owned, Thunderbird mineral sands project, located in north-west Western Australia.

Sheffield Resources is nearing the finishing line of the developmental process at the Thunderbird project, so it can start the next phase, including construction, commissioning, mining and production of zircon and ilmenite related products.

Thunderbird is one of the largest and highest grade mineral sands discoveries in the last 30 years hosting Mineral Resources of 3.23 billion tonnes at 6.9 per cent heavy minerals (HM) (Measured, Indicated and Inferred at 3% HM cut-off).

The Resources includes 18.6 million tonnes of zircon, 5.9 million tonnes of high-titanium leucoxene, 6.5 million tonnes of leucoxene and 61.7 million tonnes of ilmenite as well as a coherent and minable high-grade zone (at 7.5% HM cut-off) of 1,050 million tonnes at 12.2 per cent HM (Measured, Indicated and Inferred) containing 9.7 million tonnes of zircon, 3 million tonnes of high-titanium leucoxene, 2.7 million tonnes of leucoxene and 35 million tonnes of ilmenite.

The high in-situ valuable heavy mineral (VHM) grades for this zone of 0.93 per cent zircon, 0.28 per cent high-titanium leucoxene, 0.26 per cent leucoxene and 3.3 per cent ilmenite places Thunderbird within the top tier of global heavy minerals sands (HMS) deposits.

Sheffield’s Bankable Feasibility Study determined Thunderbird as being a technically minimal risk, modest capex project that will generate strong cash margins from world-class levels of production over its currently forecast exceptionally long mine life of 42 years.

While progress has been made at Thunderbird, Sheffield has also generated two new zircon rich projects located in the Canning Basin of Western Australia and the Eucla Basin of South Australia.

The company’s portfolio of HMS exploration projects now comprises the Dampier and Central Canning projects, located in the Canning Basin of Western Australia, the Eneabba and McCalls projects located in the North Perth Basin of Western Australia, and the Barton project located in the Eucla Basin of South Australia.

Sheffield has outlined an exploration strategy focussed on targeting additional large, high value, zircon rich deposits suitable for downstream processing at the Thunderbird Dry Mineral Separation Plant (MSP).

To that end, Sheffield has resolved to actively pursue and evaluate new mineral sands opportunities in Australia and overseas, with a focus on zircon rich deposits.

“We have commenced new drilling programs at the Thunderbird project with the expectation of establishing new Resources,” Sheffield Resources managing director Bruce Mc Fadzean told The Resources Roadhouse.

“Any increase on Resources or Reserves at Thunderbird could result in pushing the current mine life expectancy out well beyond 50 years.”

Once in production, Thunderbird will generate a high-quality suite of mineral sands products with specifications suited to market requirements.

These products include premium zircon suitable for the ceramic sector and low temperature roast (LTR) Ilmenite, one of the highest-grade sulfate feedstocks available globally and the product is also suitable for use within the high growth chloride slag market.

Sheffield recently announced the signing of a binding zircon offtake agreement with Qingyuan Jinsheng ZR & TI Resources Co. Ltd, for the minimum annual supply of 9,000 tonnes of premium zircon.

The agreement followed an earlier rush of customers signing on for binding offtake agreements that included:

CFM Minerales s.a for minimum annual supply of 4,000 tonnes of premium zircon;

Hainan Wensheng High-Tech Materials Company Limited for a minimum annual supply of 27,000 tonnes of zircon concentrate; and

Nanjing Rzisources International Trading Co Ltd for a minimum annual supply of 15,000 tonnes of premium zircon and 23,000 tonnes of zircon concentrate.

The offtake combination means 100 per cent of both zircon concentrate and premium zircon for Stage 1 of Thunderbird has now been secured under binding agreements.

Sheffield recently secured a maiden binding ilmenite offtake agreement for the future sale of LTR ilmenite from its Thunderbird deposit.

The Agreement, signed with Bengbu Zhongheng New Materials S&T Co., Ltd (Bengbu), is based on a five-year minimum annual supply of 150,000 tonnes of LTR ilmenite. This represents approximately 50 per cent of the estimated total volume of LTR ilmenite to be produced from Stage 1 of Thunderbird

“The Thunderbird LTR ilmenite is a premium feedstock for the sulfate pigment industry, however this agreement clearly shows we are able to also target the high growth chloride slag market,” McFadzean said.

With the zircon side of production covered and 50 per cent of LTR ilmenite under binding contract, over 75 per cent of total forecast Stage 1 revenue is now under binding agreement.

McFadzean explained that due to more stringent environmental requirements the chloride pigment sector, particularly in China, is set to enter a major growth phase which is providing an exciting and growing opportunity for our ilmenite product.

“All of the growth in production in pigment is in the chloride sector – even in China, they’re unlikely to permit any new sulfate plants,” McFadzean continued.

“For us to enter into that sector as a feedstock for chloride slag was a great win and we have received a lot of calls from producers and investors saying that they were impressed that Sheffield was able to break into that sector.

“We have always had the product with the potential to enter the chloride sector – we just never targeted it before.”

Important contractual agreements associated with the development of Thunderbird have continued to progress well, including the recently inked Port Access Agreement with the Shire of Derby-West Kimberley in WA.

The Agreement covers a minimum of 20 years of planned production from Thunderbird and provides long term access to a bulk handling facility and associated infrastructure located at the Port of Derby, from where Sheffield plans to export its mineral sands bulk products including LTR ilmenite, zircon concentrate and titanomagnetite.

Infrastructure at the Port of Derby was previously used for the export of base metal concentrates and is very well suited to the export of mineral sands products.

The company’s involvement with local communities has been integral to the progress made at Thunderbird.

Recently a co-existence agreement was successfully negotiated with the Walalakoo Aboriginal Corporation (WAC), the prescribed body corporate for the Nyikina Mangala native title holders, over miscellaneous licences that secured road access to the Thunderbird project.

The agreement covers the portion of the Thunderbird access road off the Great Northern Highway that coincides with Nyikina Mangala determined land and ensures the Nyikina Mangala people will participate in the development of the project through the receipt of throughput payments, employment, training and business opportunities.

“We were extremely pleased with the outcome of the negotiations with the Nyikina Mangala people,” McFadzean said.

“The resulting agreement recognises the interests of the Nyikina Mangala people and will ensure they play a pivotal role in the future of the Thunderbird project.”

Sheffield’s Thunderbird project is in one of the world’s best mining investment jurisdictions and is well placed to deliver long term, secure supply of high quality products to a range of potential customers.

Subject to permitting activities, the company is targeting initial production in 2020 with the initial planned production profile expected to fill emerging supply gaps in global mineral sands markets.

 

Sheffield Resources Limited (ASX: SFX)
…The Short Story

HEAD OFFICE
Level 2
41-47 Colin Street
West Perth WA 6005

Ph: + 61 8 6555 8777

Email: info@sheffieldresources.com.au
Website: www.sheffieldresources.com.au

DIRECTORS
Will Burbury, Bruce McFadzean, Bruce McQuitty, David Archer

 

Saturn Metals Priming Apollo Hill for Lift-off

THE INSIDE STORY: Saturn Metals (ASX: STN) listed on the ASX with the purpose of giving the Apollo Hill gold project the attention its deserves and has not received.

Saturn Metals became the beneficiary of the exploration success enjoyed by Peel Mining (ASX: PEX) at its base metals projects in the Cobar Basin of New South Wales.

Peel originally acquired the Apollo Hill gold assets hoping to become a West Australian gold producer; however, its discovery of the Mallee Bull copper deposit shifted its gaze.

Peel always considered the value of Apollo Hill, but also realised that a gold project with such potential sitting idle was wasteful.

There are few newly-listed, gold exploration plays with a healthier diagnosis than Saturn Metals.

Not even six months into its ASX-existence, Saturn has a gold project totalling around 1,076 square kilometres of contiguous tenements in 23 mining, exploration and prospecting licenses, located in the heart of one of Australia’s highest producing regions.

The company raised $7 million in its IPO and at March this year it still had a healthy figure of around $6.5 million in the company coffers.

It has also been successful in applying for a grant under a recent round of the Western Australian Government’s Exploration Incentive Scheme (EIS) that will cover 50 per cent of the cost of two RC/diamond holes planned to follow up on historic and recent drilling at the project.

“Our strategic land position is right in the heart of the Eastern Goldfields of Western Australia,” Saturn Metals managing director Ian Bamborough told The Resources Roadhouse.

“If you even thought, on a very basic level, about the synchronicity of plus-one million-ounce major deposits, it becomes obvious that there is a large gap in the strongest greenstone belt of the region and it sits pretty much where we are.”

The Apollo Hill project is approximately 60 kilometres southeast of the gold mining and processing town of Leonora in a neighbourhood dotted by numerous companies currently mining multi-million-ounce gold deposits.

The project came with an established JORC code 2012-compliant Inferred Resource of 17.2 million tonnes at 0.9 grams per tonne gold for 505,000 ounces of gold using a 0.5 g/t cut-off (maximum depth of the resource at 180m below surface).

The Apollo Hill project comprises two deposits, the main Apollo Hill deposit in the north of the project area, and the smaller Ra deposit in the south.

At Apollo Hill, Peel Mining had identified two zones of mineralisation: The West (or Main) Zone and the East Zone and when it handed the project over the Resource extended for about 1,100m in strike.

Peel had tested the Apollo Hill mineralisation using 30m spaced, 45 degrees trending traverses of drill holes.

For most traverses, the upper approximately 50m was tested by holes spaced at around 20 to 30m.

Below this depth the coverage is variable, ranging from around 20m spacing on some sections to commonly greater than 60m.

The western mineralised domain has an average width of about 70m while the eastern domain has an average width of about 100m.

Metallurgical testwork by Peel demonstrated gold extraction levels of more than 60 per cent by gravity separation alone and greater than 92 per cent of gold extractable via gravity and cyanidation.

Saturn Metals was quick to declare its intentions for growing the Resources and to extend the known mineralisation.

An airborne magnetic and radiometric survey was completed in March, providing district scale gold targeting information.

This was followed by a high-resolution ground gravity survey over two highly prospective areas within the tenement package.

The company expects the results from both surveys will improve its exploration targeting ability at the regional scale.

Since listing, Saturn has completed around 4,300m of RC drilling and a 1200m program of diamond drilling and has returned the RC rig to carry out further drilling.

Saturn anticipates the drilling will achieve on a multi-pronged basis, the first being to extend and open the system, while the next is about upgrading the current Resource, which it expects to have finished by around September.

The company is confident of developing Apollo into being a two-million-ounce gold district.

“We have conducted some specific drilling targeting higher-grade plunging shoots within the Apollo Hill gold system and that is going to do a couple of things,” Bamborough explained.

“If we find a high-grade shoot within the greater system then there is potential to lift the grade of the system.

“To put that in context: a 0.1 grams per tonne uplift on a 17 million tonne Resource will provide a further 50,000 ounces.

“We want to get above that 0.9 grams per tonne hurdle and bring that grade up over the one gram per tonne mark, which will mostly likely place us in an improved position when compared to our peers.

“The higher-grade shoots – if they emerge into what we believe they could be – could develop into being ore bodies within their own right within the bigger low-grade halo.

“There is tremendous leverage for making this project better.”

Recent near-surface extensional assay results from the earlier RC drilling compared favourably with historic drill intersections from Apollo Hill.

Better results included:

AHRC0024
12 metres at 2.8 grams per tonne gold from 4m, including 3m at 8.8g/t gold from 13m;

AHRC0019
20m at 2.5g/t gold from 52m and 11m at 2.28g/t gold from 84m within, 100m at 1.01g/t Au from 7m;

AHRC0029
22m at 1.01g/t gold from 52m, including 11m at 1.49g/t gold from 52m;

AHRC0032
10m at 1.5g/t gold from 49m;

AHRC0034
6m at 2.41g/t gold from 53m; and

AHRC0028
34m at 0.45g/t gold from 76m;

Saturn moved seamlessly into its maiden diamond drilling program at Apollo Hill comprising approximately 1,200m in nine holes to follow up on the Saturn RC drilling that had further highlighted the potential for several stacked, higher grade plunging shoots.

In addition to Saturn’s new RC results, intersections from historic drilling included 2m at 69.6g/t gold from 146m and 5.3m at 10.3g/t gold from 70.7m.

“The diamond drilling that we have just finished has been very much about finding further evidence of the higher-grade architecture and about having a really good look at the entire thing as well,” Bamborough said.

“Because of the way this area has been historically approached, generally as a big low-grade deposit drilled with wide spaced holes, I think people have had the mindset that this is all it can be.

“I’ve taken that hat off and have decided to look within at these beautiful gold shoots that are sparsely drilled.

“The higher grade historic intersections and our new drilling results are telling us how and where to focus.

“If these results had been achieved at a project such as Jundee, owners of the Newmont and Northern Star ilk would have been right in there with underground drill rigs giving It a good hammering.

“My vision is to create a paradigm shift for people on the deposit.

“Yes, we can make it bigger, but this is how we are now going to make it better.

“What I can say now, is that the geology that we have seen from the diamond holes is adding weight to those theories.”

 

Saturn Metals Limited (ASX: STN)
… The Short Story

HEAD OFFICE
Unit 1
34 Kings Park Road
West Perth WA 6005

Ph: (08) 6424 8695

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

DIRECTORS
Ian Bamborough, Rob Tyson, Andrew Venn

 

Peel Mining Enjoying Longer Southern Nights

THE INSIDE STORY: Peel Mining is primary focus is the Wagga Tank-Southern Nights project in New South Wales.

Peel has been exploring for high-grade base metals in the Cobar Basin for around eight years, where it has made three greenfield discoveries: Mallee Bull, Wirlong, and Southern Nights.

A fourth discovery, Wagga Tank is a rediscovery as such, as it had been found before the company arrived but had been neglected for nearly three decades.

“We started calling the Cobar Basin home after making the Mallee Bull discovery,” Peel Mining managing director Rob Tyson told The Resources Roadhouse.

“We have completed over 160 kilometres of drilling since listing and in the last financial year alone, we were probably close to doing 50 kilometres of drilling.

“That has been fundamental to us making discoveries.”

Peel followed a trail of historic drilling and prospecting results into the Cobar Basin left by earlier explorers.

At Wagga Tank, a study of historical data included 42 drill holes, revealing 24 with potential economic drill intercepts.

Discovered in the 1970s, no work had been carried out on the Wagga Tank deposit since 1989.

Discoveries made by Peel in the Cobar Basin, include the advanced Mallee Bull copper-polymetallic deposit, a 50:50 Joint Venture with CBH Resources.

It contains a JORC compliant Mineral Resource Estimate of 6.76 million tonnes at 1.8 per cent copper, 31 grams per tonne silver, 0.4g/t gold, 0.6 per cent lead and 0.6 per cent zinc (2.6% copper equivalent) containing approximately 119,000 tonnes of copper, 6.6 million ounces silver, 83,000 ounces gold, 38,000 tonnes lead and 38,000 tonnes zinc (175,000t copper equivalent) (using a 1% copper equivalent cutoff).

Pre-Feasibility Study work at Mallee Bull has investigated the conceptual development of the Silver Ray lens (formerly T1) as a ‘dig and truck’ operation, where ore would be milled at CBH’s Endeavor mine approximately 150km away, where surplus milling capacity exists.

The JV partners believe staged mining development of the Mallee Bull deposit could substantially reduce total capital expenditure.

The Wirlong deposit, discovered in 2015, is part of the Cobar Superbasin Project that is subject to a Memorandum of Agreement with Japan Oil, Gas, and Metals National Corporation (JOGMEC).

Wirlong has returned many important drill results in recent times, including:

WLRC015
4.9 metres at 4.3 per cent copper, 13g/t silver from 402.1m and 22m at 1 per cent copper, 4g/t silver from 332m;

WLDD001
9m at 8 per cent copper, 17 g/t silver, 0.21g/t gold from 616m and 38m at 1.18 per cent copper, 4g/t silver from 450m;

WLRCDD024
26m at 1.21 per cent copper, 5g/t silver from 227m and 10m at 1.01 per cent copper, 4g/t silver from 288m;

WLRC026
27m at 5.3 per cent copper, 23g/t silver from 286m and 9m at 1.27 per cent copper, 4g/t silver from 255m;

WLRCDD028
9m at 1.29 per cent copper, 7g/t silver from 412m and 19m at 1.36 per cent copper, 6g/t silver from 432m;

WLRCDD043
17m at 4.59 per cent copper, 8g/t silver from 738m;

WLRC052
31m at 3.19 per cent copper, 11g/t silver from 299m; and

WLRC035
9m at 3.29 per cent copper, 18g/t silver from 70m.

“Mallee Bull sits atop our project pyramid followed by Wagga Tank/Southern Nights, then Wirlong in terms of how advanced each is,” Tyson said.

“However, our 100 per cent-owned Wagga Tank/Southern Nights has surpassed Mallee Bull in terms of importance to the company.”

Peel announced discovery of the high-grade zinc-lead-silver Southern Nights in October 2017 then followed up with a succession of strong drilling results confirming it as one of Australia’s most important zinc polymetallic discoveries.

“From historic data, we noticed a near surface oxide gold zone, beneath which there is some supergene copper, gold and silver,” Tyson said.

“But the primary mineralisation that caught our attention was the deeper zinc-lead-silver rich massive sulphide.

“At the end of an 18-hole program validating the historical results, we had around 300 metres of strike and a system defined to 350 metres below surface and open in all directions.

“The alteration and mineralisation in the drill core indicated, however, that it was likely to be a much larger system that initially thought.

“That led us to carry out further exploration, primarily geophysics conducting aeromag, surface EM, IP and gravity surveys that lead us to Southern Nights.”

Recent drilling produced high-grade mineralised intercepts at Southern Nights, and from the intervening zone between Wagga Tank and Southern Nights.

Most importantly, the drilling confirmed the Wagga Tank and Southern Nights deposits to be linked together, essentially as parts of one large mineral system.

Drillhole WTRCDD123 returned a strongly mineralised intercept confirming the link between Wagga Tank and Southern Nights of:

14.45m at 2.43 per cent copper, 2.67 grams per tonne gold, 123g/t silver, 2.58 per cent zinc, 0.87 per cent lead from 435.55m.

The copper-gold mineralisation intercepted in WTRCDD123 indicates possible metal zonation within the Wagga Tank-Southern Nights mineral system, a common feature of Cobar-style deposits.

The mineralisation remains open in all directions including up-dip.

Positive news from Southern Nights continued as drilling testing at deeper levels at Southern Nights and in the Wagga Tank-Southern Nights corridor encountered critical host stratigraphic units, with mineralisation observed in all drillholes.

Follow-up drilling at two other prospects associated with the Wagga Tank-Southern Nights corridor also returned positive results.

Drilling at the Fenceline prospect encountered mineralisation which remains open along strike and down-dip while first-pass drilling at The Bird prospect, located about 1.5km north of Fenceline, returned anomalous geochemistry confirming base metal mineralisation associated with the chargeable geophysical IP target.

Assays for Southern Nights returned:

WTRCDD075
13.1m at 5.49 per cent zinc, 1.53 per cent lead, 0.39 per cent copper, 31g/t silver, 0.5g/t gold from 259.8m;

WTRCDD106
46.4m at 3.91 per cent zinc, 1.51 per cent lead, 60g/t silver, 0.17g/t gold from 227.6m, including 18.9m at 7 per cent zinc, 2.74 per cent lead, 112g/t silver, 0.35g/t gold from 227.6m;

WTRCDD108
11.9m at 3.02 per cent zinc, 1.39 per cent lead, 203g/t silver from 240m, including 7.4m at 4.88 per cent zinc, 2.08 per cent lead, 311g/t silver from 241m; and

WTRCDD122
42.45m at 1 per cent copper, 18g/t silver, 0.35g/t gold, 0.3 per cent zinc, 0.14 per cent lead from 483.55m, including 10m at 1.94 per cent copper, 30g/t silver, 0.61g/t gold, 0.14 per cent zinc, 0.13 per cent lead from 496m.

Follow-up drilling at Fenceline returned:

TBRC029
8m at 6.29 per cent lead, 33g/t silver, 0.94g/t gold from 94m;

TBRC030
6m at 2.62 per cent lead, 18g/t silver, 1.76g/t gold from 97m; and

TBRC033
3m at 5.41 per cent zinc, 2.78 per cent lead, 0.25 per cent copper, 43g/t silver, 0.15g/t gold from 159m.

“There is now two kilometres of strike from the top of Wagga Tank to the bottom of Southern Nights,” Tyson said.

“It is open at depth, open north and south and is located on the Western side of the Cobar Basin where we believe some major structures exist that are feeding the system.

“Everything we have seen to date indicates this is a Cobar-style system, so we are hopeful it will have that long vertical planer continuation these types of systems usually display.

“More importantly, it displays camp-scale mineralisation along two-kilometres of strike, making it a large-scale system.”

 

Peel Mining Ltd. (ASX: PEX)
… The Short Story

HEAD OFFICE
Unit 1
34 Kings Park Road
West Perth WA 6005

Ph: (08) 9382 3955

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

DIRECTORS
Rob Tyson, Simon Hadfield, Graham Hardie

 

Exploration Key to Gold Road Resources’ Future

THE INSIDE STORY: Development of the Gruyere gold project is on schedule to promote Gold Road Resources (ASX: GOR) to be an Australian gold producer.

As exciting that is, the company is determined to maintain its reputation as an explorer for, and discoverer of, rich gold deposits.

Gold Road Resources’ Yamarna exploration tenements cover 180 kilometres of greenstone strike, making it one of Australia’s largest greenfields gold exploration projects.

To put that in perspective, the tenements cover the same distance that separates the Western Australian goldfields hubs of Kalgoorlie and Norseman.

To focus the $23 million of exploration drilling Gold Road is conducting this year, it has separated its tenements into three delineated hubs.

The 100 per cent-owned Northern Hub encapsulates the Ibanez (Corkwood) and Bloodwood targets.

The Southern Hub, also 100 per cent Gold Road-owned, includes the Smokebush, Toppin Hill, and Wanderrie targets.

“Each of these hubs is a geological target area with multiple targets within each one,” Gold Road Resources’ Executive Director – Exploration & Growth Justin Osborne told The Resources Roadhouse.

“They are close enough to each other that should we start finding deposits within a camp that may be close enough to a deposit in another we could possibly develop another mining/processing centre, into which we can feed material from multiple camps.

“We want to be a producing exploration company: we want to be a decent sized producer at 150,000 ounces per year, but we also still want to be an aggressive exploration company.”

The company’s 50 per cent interest in the Central Hub includes the Gruyere gold project, where construction is being managed by Gruyere Management Pty Ltd, a wholly-owned subsidiary of the company’s 50 per cent Joint Venture partner Gold Fields Limited.

Currently all Yamarna Mineral Resources and Ore Reserves are located within the Gruyere JV tenements.

The Ore Reserve for Yamarna was recently increased by 6.3 per cent to 97.35 million tonnes at 1.2 g/t gold for 3.74 million ounces of gold.

This included a maiden combined Ore Reserve of 3.59 million tonnes at 1.55 g/t gold for 179,000 ounces for satellite deposits at Attila and Alaric after a Pre‐feasibility Study into developing each as open pit mines to provide satellite feed to the Gruyere process plant was completed.

Modifications to the mine design operational plan increased Ore Reserves at Gruyere by 44,000 ounces following to 93.76 million tonnes at 1.18 g/t gold for 3.56 million ounces.

Six million dollars (100 per cent basis) of Gold Road’s 2018 budget will fund drilling at the Gruyere JV focusing on resource definition drilling on additional high‐margin satellite deposits.

Early this year, RC drilling to convert the existing Attila‐Alaric Trend 12.32 million tonnes at 1.5 g/t gold for 596,000 ounces Mineral Resource to Ore Reserve commenced on the Montagne Deposit, which along with the Argos deposit contributes 207,000 ounces to the above figure.

“Exploration activity we have planned for the Central Hub, within the Gruyere JV, is focused along the Golden Highway – the Attila-Alaric Trend,” Osborne explained.

“Most of that will be infill drilling, and hopefully identify some new higher-grade zones in some of the Central Hub deposits, such as Montagne and Argos.

“If we can start proving those up on closer spacing, we might establish some pockets of high-grade Reserves that can be trucked across to Gruyere.”

In February 2018 Gold Road achieved 100 per cent-ownership of the Southern Hub tenements by acquiring the 50 per cent interest of its JV partner since 2013, Sumitomo Metal Mining Oceania Pty Ltd (SMMO).

Subsequent drilling confirmed high-grade mineralisation at the Smokebush Camp and along the 14-kilometre-long Supergroup Trend in the Wanderrie Camp, starting approximately 15 kilometres north of the Smokebush Camp.

Diamond drilling at Smokebush improved understanding and continuity of high-grade dolerite hosted mineralisation, returning intersections of:

18SMDD0005
56.25 metres at 1.95g/t gold from 98.75m, including 5.41m at 4.22g/t gold from 133.65m and 7.73m at 5.45g/t gold from 144m;

15SYDD0008
6.76m at 31.13g/t gold from 167.71m, including 0.94m at 191.36g/t gold from 173.06m; and

15SYRC00034
71m at 2.95g/t gold from 123m, including 6m at 5.34g/t gold from 143m

Diamond and RC drilling results from Wanderrie also confirmed potential to define several deposits, including:

18WDRC0149
2m at 17.45g/t gold from 80m;

18WDRC0157
1m at 17.27g/t gold from 134m and 5m at 4.5g/t gold from 140m;

18WDRC0156
5m at 3.63g/t gold from 85m and 2m at 10.31g/t gold from 130m; and

18WDRC0159
5m at 3.64g/t gold from 57m.

18WDDD0021
10.53m at 4.19g/t gold from 165m

“At both of those targets we intersected high-grade mineralisation,” Osborne said.

“We believe both have potential to progress to where we would like them to be by the end of the year, which would be ready to commence Resource drilling.”

Another Southern Hub target is Toppin Hill where previous drilling encountered 12m at 4.7g/t gold and 9.1m at 3.5g/t gold.

Toppin Hill was part of the South Yamarna JV with SMMO where the company had limited opportunities to conduct follow-up drilling after the original discoveries.

Aircore drilling on the Wanderrie Supergroup Trend confirmed 11 kilometres of strike, returning mineralised intersections of:

Satriani
17WDRC0033
2m at 14.74g/t gold from 73m;

Santana
17TARC0028
1m at 17.73g/t gold from 68 metres; and

17TARC0025
5 metres at 2.03 g/t gold from 108m.

The Northern Hub has demonstrated plenty of potential and Gold Road is eager to complete current diamond and RC testing at one of its highest‐ranked targets, Ibanez, within the Corkwood Camp.

Previous results from Ibanez include:

17CWRC0037
10m at 28.67g/t gold from 240m, including 2m at 136.57g/t gold from 240m; and

17CWDD0015
8.20m at 11.63g/t gold from 229.67m, including 3.33m at 27.48g/t gold from 232.26m.

Unseasonable heavy rainfall stymied Gold Road’s plans to gain access to Ibanez and the broader Corkwood area in February, however all necessary clearances have since been approved and the access track repaired allowing drilling of Ibanez to recommence.

The company’s true exploration roots will be on show when it gets to the Romano and Bloodwood targets in the Northern Hub.

Bloodwood and Romano will be the first ‘untested’ camps that Gold Road will have drilled for more than three years.

“Romano sits north of Gruyere along the same Dorothy Hills Shear and is a target we have been trying to get to for two or three years,” Osborne enthused.

“At Bloodwood we will be drilling out an approximate 15-kilometre strike length that is completely untested between Corkwood and Attila-Alaric.

“The magnetics we have seen from Bloodwood indicate there are some interesting target zones that don’t look any different to the target zones we originally encountered along the Attila-Alaric Trend.

“There is now 600,000 ounces of Resources at Attila-Alaric so if we are able to repeat that at Bloodwood and establish substantial Resources at Romano and Corkwood, that would then become the backbone of a new processing centre.

“The same goes for the Southern Hub.

“If we were to find half a million ounces at each of Smokebush, Wanderrie and Toppin Hill – that’s 1.5 million ounces in a centre that would be enough to justify a separate project development.

“Don’t get me wrong, it would be fantastic to find a one-million-ounce deposit in its own right, but if we were to establish three half-million-ounce centres, then that’s fine too.”

Anticipation is high amongst the Western Australia gold community for the opening of the Gruyere gold project.

As Australia’s next tier one gold mine, the Gruyere gold project is an important new project for WA that is expected to produce an average of 270,000 ounces per annum over the 13-year life-of-mine and low all in sustaining costs.

To give those figures some perspective it is worth noting that Australia is the second largest producer of gold in the world with 288 tonnes of gold produced in 2016-17.

There are currently 66 operating gold mines in Australia including 14 of the world’s largest, 11 of which are in Western Australia making it the country’s major gold producer, accounting for almost 70 per cent of Australia’s total gold production.

This means that if it was a country – which many Sandgropers would prefer – Western Australia would ranks as the fifth largest gold producer in the world.

The Gruyere Gold Project was discovered by Gold Road in October 2013 on the South Dorothy Hills Trend.

Just 10 months after making the Gruyere discovery, Gold Road had defined a substantial high-grade gold deposit which has since grown to 144 million tonnes grading 1.3 grams per tonne for 5.9 million ounces of contained gold, making it one of the largest undeveloped gold deposits in Australia.

The project attracted the attention of Gold Fields Ltd, which entered a 50:50 Joint Venture with the ambitious explorer.

Construction of the 7.5 million tonnes per annum Gruyere gold project commenced at the beginning of 2017 and since then the Project team has managed to tick off several important milestones, the biggest of which is to come in the shape of the first gold pour, scheduled for the beginning of the 2019 June quarter.

The delivery from discovery to first gold of 5.5 years will represent a great achievement by Gold Road and Gold Fields.

The Project milestones achieved over the past 18 months include:

Installation and establishment of the 648 room Gruyere Village by McNally Construction which was opened by the Hon. Bill Johnston, WA Minister for Mines in August 2017;

Construction of the Anne Beadell borefield, the main water supply for the Gruyere Village and early earthworks by GR Engineering Services and Desert Sands;

Completion by MACA of the all-weather 100 seater jet capable Gruyere airstrip, Gruyere main access road, clearing and part pre-stripping of the Stage 1 Pit and the life-of-mine Tailings Storage Facility, and commencement of the Yeo borefield which will provide water for mine operations;

Over 50 per cent completion progress by the Amec Foster Wheeler Civmec Joint Venture (ACJV) on construction of the Gruyere Process Plant and other infrastructure;

Completion of the 198 kilometre Yamarna Gas Pipeline (YGP), which was installed by Nacap Australia Pty Ltd on behalf of APA Group slightly ahead of schedule. All generators and gas engines have been installed at the 45MW Gruyere Power Station. Integrity testing is in progress ahead of anticipated commissioning of the power station in the December 2018 quarter; and

Delivery of all significant plant and equipment including SAG, Ball Mills and crushing circuit to site with installation underway.

The construction is fully funded by the Gruyere Joint Venture.

Construction of mining infrastructure commenced in the March 2018 quarter and mining activities are scheduled to begin in the December 2018 quarter.

At the peak of the mining services contract, Downer expects to deploy 170 personnel at Gruyere charged with moving approximately 31 million tonnes of material per year.

The Gruyere gold project will employ a total of 350 personnel once in operation.

 

Gold Road Resources (ASX: GOR)
…The Short Story

HEAD OFFICE
Level 2
26 Colin Street
West Perth WA 6005

Ph: +61 8 9200 1600

Email: perth@goldroad.com.au
Website: www.goldroad.com.au

DIRECTORS
Tim Netscher, Ian Murray, Justin Osborne, Sharon Warburton, Brian Levet