Blackham Resources Returns to Winning Form

THE INSIDE STORY: Just as a week is a long time in football, Blackham Resources (ASX: BLK) has shown the industry a quarter can be a long time in mining.

If Blackham Resources were to be compared to the fortunes of an Australian Rules Football club it would most likely be Richmond.

Its supporters are fanatical and are quick to let those in charge feel their wrath when things are down and are equally magnanimous when their team starts performing to their liking.

Blackham disappointed its followers last year when its 2017 June Quarterly reported the company had missed guidance of 17000 to 22000 ounces of gold at its 6.5 million ounce Wiluna gold operations in Western Australia, producing an sub-performance 15700 ounces.

This result had followed a lower return from the March 2017 quarter of 14900 ounce.

Blackham provided several reasons for the performances, including wet weather, wall slippages and lower than expected underground grades for missing expectations, however it also signalled a return to form was imminent, flagging a likely increase in grade profile, which would generate better production and Free Cash Flow from the September 2017 quarter.

Although gold production was still down for the September 2017 quarter at 15,619 ounces, there was a noticeable improvement in mill feed due to mining of bigger and higher-grade proportions of Golden Age underground ore.

Mill feed grade was weighed down by 39 per cent of the ore milled during the quarter being from lower grade stockpiles (0.7g/t) and access to a substantial portion of higher-grade M4 open pit ore was delayed into the December 2017 quarter due to the pit wall instability which was rectified during the quarter.

Blackham started showing a return to form during the December 2017 quarter when it reported that extensive waste stripping it had carried out during the calendar year 2017 had provided access to high-grade zones in both the Galaxy and M4 pits, in November and December respectively that would provide up to six months of access to consistent high-grade ore.

Mining at M4 and Galaxy is expected to underpin strong operational cashflows for Blackham in 2018.

Both got off to flying starts during December 2017 with 137000 tonnes of high-grade ore at 1.6 grams per tonne gold mined from the M4 and Galaxy pits and a further 7,887 ounces of gold mined from the two open pits in December.

When Blackham released its quarterly in January the two pits were already ahead of previous results with 11410 ounces of gold mined, more than the entire September quarter.

By kicking off mining of these high-grade M4 and Galaxy pits zones, Blackham began to build high-grade stockpiles, which was the first significant high-grade stockpile build-up the company had achieved since March 2017.

Blackham Resources started its return to Brownlow Medal-form in 2018 producing a strong March quarter at Wiliuna that increased gold production by 38 per cent from the previous December quarter including new monthly record gold production achieved in each successive month of the quarter.

In January Blackham produced 6,498 ounces of gold that was achieved along with a record low monthly All In Sustaining Costs (AISC) of $1,158 per ounce, which compared well to an average realised gold price during the month of $1,663 per ounce, demonstrating a clear step change in economics for the operation.

February’s numbers saw further improvement thanks to a low open pit mining stripping ratio of 1.5:1 (waste:ore).

The company chalked up another record month of gold production, combing with the low stripping ratio to set a record low monthly AISC for February of $912 per ounce with an average realised gold price during the month of $1,670 per ounce.

Rainfall and lightning events during the month threatened to destabilise mining operations once again, however this time the company was able to see them off and increased the high-grade stockpiles to 144000 tonnes at 1.7g/t gold – more than a month’s production.

“February’s operational results demonstrate a continued improvement of the turnaround that commenced in December 2017,” Blackham Resources executive chairman Milan Jerkovic said.

“Record production and further reduced costs from the operation underpinned another month of strong cashflow, whilst maintaining stockpiles with increased grades.”

Blackham completed a premiership quarter with another gold production record for the month of March pumping out 7419 ounces of gold, an impressive 11 per cent increase on February.

AISC were reduced in the March quarter to $1092 per ounce, representing a substantial 42 per cent decrease on the December of $1882 per ounce.

An average realised gold price of $1669 per ounce was achieved for the quarter and the company holds gold forward sales contracts of 29,417 ounces at $1725 per ounce over the next nine months representing approximately 50 per cent of targeted production over that period.

“The March operational results demonstrate a continuation of the step change in project economics that commenced in December 2017,” Jerkovic said.

“Record production and significantly reduced costs underpinned a quarter of strong operational cashflows, whilst building stockpiles.”

As at 31 March 2018, Blackham had improved its net debt position to $10.4 million, a much healthier position than at 31 December 2017 where it sat at $27.4 million.

The company also held cash and bullion of $29.6 million and secured interest-bearing debt of $40 million.

A $14.3 million term loan previously due on 31 December 2017 was refinanced in mid Jan’18.

Blackham’s improved performance was recognised in the form of very strong shareholder support for an underwritten Entitlement Offer that raised approximately $35.9 million.

“The funds raised from the Entitlement Offer puts Blackham in a strong position to execute on its free milling mine plan, as well as to advance exploration focussed on growing our free milling mine life,” Jerkovic said.

“As demonstrated by the strength of our operations in December 2017 and January 2018, the company is at an exciting stage, with 2018 likely to be a transformational year of strong operational and financial performance.”

During March, Blackham’s exploration team drilled a program consisting 84 RC holes that was focused on delineating further free milling open pit reserves over the four kilometres of strike at the Wiluna mine.

This drilling was undertaken to follow up on a program of 77,000m drilling completed during the 2017 financial year.

That drilling had established probable reserves of 669,000 ounces (7.7 million tonnes at 2.7g/t gold), which includes oxide and transitional reserves of 144,000 ounces (2.5 million tonnes at 1.8g/t gold).

The drilling is focused on free milling ores that can be processed through the current plant.

The company has revised Wiluna mining and metallurgical studies that are well advanced in this area following the Wiluna Expansion PFS published in August 2017.

The Expansion PFS confirmed the robust economics for a plus-200,000 ounces per annum long mine life operation.

Key outcomes were life-of-mine AISC of $1,058 per ounce (US$822/oz), IRR 123 per cent and NPV of $360 million before tax at $1600 per ounce gold price.

Blackham is now re-estimating the open pit oxide reserves around the Wiluna mine site as the Blackham management team believes the Wiluna free milling ores are an obvious feed stock for the current operating mill and has a plan to fast track mining approvals.


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

Level 2, 38 Richardson St
West Perth WA 6005

Ph: +61 8 9322 6418


Milan Jerkovic, Bryan Dixon, Greg Miles, Greg Fitzgerald

Draig Resources Eager to Develop Tribune Gold Discovery

THE INSIDE STORY: Draig Resources (ASX: DRG) aspires to fast track development of a high-grade underground and open pit operation at the company’s Bellevue project in Western Australia.

Draig Resources set a cracking exploration pace in 2017 at the company’s Bellevue gold project, located 400 kilometres north west of Kalgoorlie in Western Australia.

In March 2017, Draig appointed Steve Parsons as executive director and charged him with the responsibility of advancing Bellevue.

Parsons came well-qualified for the job, having been managing director of Gryphon Minerals, which under his watch grew to be included on the ASX200 group of companies, eventually being taken over for $100 million by a North American gold company in late 2016.

Parsons oversaw the discovery and delineation of Gryphon’s 3.6 million ounce Banfora gold project in West Africa.

“After I joined Draig, we spent the first six months looking to find what projects and opportunities were sitting out there waiting to be ‘rediscovered’ – ones that hadn’t been drilled to death and had exploration upside with high-grade mineralisation,” Parsons told The Resources Roadhouse.

“It has only been 12 months since I joined Draig, at which time the company owned just two mining licences covering 20 square kilometres of ground.

“These licences did, however, include the old Bellevue gold mine.”

The Bellevue gold mine stood out as an obvious starting point for the company, having been one of Australia’s highest-grade historical gold mines producing approximately 800,000 ounces of gold at 15 grams per tonne gold before it closed in 1997.

High-grade gold was mined at Bellevue for over 100 years through to 1997 when the operation shut down.

After the mine closure in 1997 it changed hands between some of the industry’s biggest-hitting companies yet very little modern exploration was undertaken as it never fell into their collective portfolio considerations.

This ultimately benefitted Draig Resources, which kicked off the first systematic exploration at Bellevue in the last 20 years.

“The Bellevue project was an amazing standout opportunity,” Parsons said.

“When we first looked at it, we were stunned to find it was a project with almost nothing done on it in 20 years, as it was, after all, one of the highest-grade gold projects of its day and has been sitting there idle.

“We always thought there was a very good chance we would find more high-grade gold – not just more, but a significant amount.

“There’s an old saying in the gold exploration community – one that a lot of people stick by – and it is one that does tend to ring true: if you want to find high-grade gold go to an old high-grade gold mine.”

Draig completed a small program of shallow diamond holes at Bellevue in August 2017 within the high priority Western Mineralised Corridor to gain an understanding of the project’s geology.

Two RC holes from this program confirmed previous historical intersections and provided confidence the company was drilling in the right area.

These holes returned intersections of:

2 metres at 8.67g/t gold from 30m and 2m at 3.66g/t gold from 109m; and

3m at 2.17g/t gold from 70m.

The company started a second phase of targeting drilling in November, and in December announced a new discovery.

The Tribune Lode is a Bellevue parallel structure located immediately to the west of the Highway Fault and about 300m to the west to the historic Bellevue underground mine.

It is in a relatively untested area mostly under the Western Mineralised Corridor shallow transported sand cover.

The Tribune Lode was intersected by drill hole DRRC0024, which returned assays of:

7m at 27.4g/t gold from 92m, including 5m at 37.5g/t gold from 92m.

This was followed up by drill hole DRDD0004 collared 80m south of the Tribune discovery drill hole, which returned:

5m at 16.5g/t gold.

Continued step-out extensional drilling further confirmed the high-grade mineralised system to be extended to the south, at depth and down plunge, with numerous high-grade drill intersections received from the latest round of results.

These include:

12m @ 12g/t gold from 68m downhole; and

2.5m at 29g/t gold from 147.5m and 3.8m at 5.2g/t gold from 133m;

4m at 9g/t gold from 57m downhole; and

The company recently completed a fully underwritten institutional placement raising $8 million, which will allow it to carry out an aggressive drill program at the Tribune Lode and explore for further high-grade zones within the highly prospective Western Corridor and beyond.

The placement resulted in new institutional investors enrolling on the company share register as well as strong support from existing shareholders.

“We see a real opportunity to significantly grow the Bellevue gold project into a standout high-grade gold project,” Parsons said.

“We took the approach that it would most likely be a two-year exercise to put some real geological thinking into the project, to bring in new, modern techniques and ideas and then go and test those ideas.

“Then, with pretty much with the first drillhole of our second drill program, we made the Tribune discovery that is in an entirely new parallel structure to what Bellevue sat in.

“So far we have defined it over about 550 metres strike length and since the start of the year the plan has been to drill that out on 80 metres by 40 metres spacings down to about 300 metres vertical depth.

“We expect that will enable us to calculate a maiden Inferred category JORC Resource, which we are hoping to release sometime in the middle of this year.”

Draig will launch into a second phase of exploration activity in the second half of this year that will focus on stepping out on the broader project area and systematically testing the shear Shear Zone that continues for about 20km to the north.

The second half of the year will also afford the company time to start looking at its recently acquired South Yandal project.

Draig exercised an option agreement to acquire 100 per cent of the highly prospective and underexplored Yandal South project, located between Echo Resources (ASX: EAR) Bronzewing project and gold processing plant as well as Red 5’s (ASX: RED) Darlot gold project and gold processing plant.

The project is only 40km to the east of the Bellevue gold project.

Draig has reviewed historical data at the Yandal project and identified targets for follow up exploration in a highly prospective greenstone belt.

The company intends to return to a first principles approach on the project conducting an extensive regolith and geological review of the project to assist targeting similar to the work leading up to the Tribune Lode discovery.

“Exploration is what we are good at and the company geologists and I wanted to develop a bigger footprint for the company,” Parsons said.

“We were interested in finding a complementary project within a 100 kilometre radius consisting good exploration ground that hadn’t been looked at closely.

“The Yandal project fell into that category and we have now grown our land position to over 1,400 square kilometres.

“It’s great to have a second project and our geologists can’t wait to get stuck into it however as the potential size Tribune starts to unfold the key focus for the company right now is the Bellevue gold project.”


Draig Resources Limited (ASX: DRG)
…The Short Story

Suite 3, Level 3
24 Outram Street
West Perth, WA, 6005

Ph: +61 8 6424 8077


Ray Shorrocks, Steve Parsons, Guy Robertson



Ventnor Resources Eyes Bright Future Through Silica Glass

There has been a great deal of market chatter recently concerning the expected rise in production of electric vehicles and the subsequent growth in demand for commodities to manufacture them.

However, there is one commodity that is as essential to the manufacture of these new vehicles.

This commodity is commonly found, which is possibly why it has received very little market attention of late.

It’s many, varied uses include the manufacture of the PVC elements, such as dashboards and door trims as well as the window glass of internal combustion engine vehicles to meet demand from the burgeoning automotive industries of India and China.

It is also used in construction as an important ingredient of concrete and common flat glass.

This wonder commodity is also used to produce high-grade glass that provides clarity to the screens of modern computers and televisions.

It is easily mined and found in any number of locations and it is an extremely precious resource the world is rapidly running out of.

This commodity…is sand.

Current supply deficits of sand are expected to blow out due to several reasons, an important one being Asian regional governments acknowledging sand as a strategic resource.

Global demand for industrial silica sand is forecast to advance 5.5 per cent per annum to 291 million metric tons in 2018, with a value of $12.5 billion.

China is the main reason the Asia/Pacific region will remain the largest regional consumer of industrial sand through 2018.

China has the world’s largest glass industry, which is expected to sustain industrial sand consumption for production of double-glazed windows, electronic display screens, photovoltaic panels, and other flat glass products.

The contribution of India cannot be discounted where activity will include production of sand moulds to manufacture automotive, machine tool, wind turbine, and other types of metal castings.

Renewable power generation is never far from the story and the increasing demand for high purity silica sand in the production of Photo Voltaic panels and Silicon-Metal composite material for high capacity lithium-ion rechargeable batteries has been well-documented in recent times.

Demand for sand is escalating to feed infrastructure-construction programs utilising concrete in Asia – particularly China, which in the last four years has poured as much concrete as the United States has in the past 100 years.

The looming lack of supply caught the attention of Bruce Maluish, managing director of Ventnor Resources, a company previously focused on gold and base metals exploration.

In October 2017, Ventnor Resources informed the market it had acquired the Arrowsmith silica sand project, located 270 kilometres north of Perth in Western Australia.

Ventnor applied for four Exploration Licenses totalling 400 square kilometres, convinced that Arrowsmith had potential to address dwindling sand supply in the Asia-Pacific region.

It has recently had two of these tenements granted – the Arrowsmith Central and Arrowsmith South prospects.

The remaining two contiguous exploration license applications are pending, including the Arrowsmith North prospect, which the company expects to be granted in May.

“The noise emanating from the global sand markets piqued my interest and I started looking for sand deposits,” Maluish told The Resources Roadhouse.

“The first place I started looking was the Perth basin, because it is close to home and because of its geomorphology that pointed to the possibility of high-grade silica sand deposits.

“The other important aspects I was looking for were tenements sitting on vacant Crown Land with proximity to a railway line.

“The Arrowsmith project immediately ticked a lot of boxes as it has the Eneabba-Geraldton rail line running straight through it, providing direct access to ship-loading facilities at the Geraldton Port, from where we can ship up to 50,000 tonnes at a time.

“There EL applications predominantly cover Vacant Crown Land and are extensively covered by cleared tracks from historic oil exploration seismic surveys and they can be easily accessed by driving down the Brand Highway.”

Even though the tenements had yet to be granted, Ventnor was able to carry out a shallow hand auger program to collect composite representative samples from the Arrowsmith North prospect.

A five-kilogram sample was submitted to Nagrom Laboratories for an initial testwork program, replicating conventional sand processing techniques that confirmed processing to upgrade the sand to glassmaking quality would involve a low-capital intensity, low technical risk operation and eliminated the need for processing chemicals.

The feed stock in the test had a head assay of 97.7 per cent silicon dioxide (SiO2) and after attritioning, magnetic separation and sizing, the 0.425mm to 0.85mm product achieved a grade of 99.5 per cent SiO2.

The remainder of the product, 0.212mm to 0.425mm, returned an assay of 99.3 per cent, however Ventnor remains confident additional testwork will improve both product grades.

Ventnor secured an option to acquire another, potentially high-grade, high tonnage silica sand project near Muchea, also north of Perth.

Like Arrowsmith, the Muchea silica sand project is strategically located adjacent to Brand Highway with a rail connection, this time to Kwinana port.

Due diligence carried out by Ventnor confirmed the potential of the prospect with assays indicating a high-quality +99.7 per cent SiO2 deposit over an area of more than 3,400 hectares.

Ventnor has determined Exploration Targets for the Muchea silica sand project, including:

For the area previously subjected to aircore drilling: 70 Million to 125 Million tonnes silica sand grading above 99.5 per cent SiO2; and

Where Ventnor has conducted hand auger drilling: 100 Million to 150 Million tonnes silica sand grading above 99.5 per cent SiO2.

These figures are expected to be supported by Exploration Targets at the Arrowsmith project of:

Arrowsmith North: 100 million to 140 million tonnes high-quality silica sand;
Arrowsmith Central: 40 million to 80 million tonnes high-quality silica sand; and
Arrowsmith South: 40 million to 80 million tonnes high-quality silica sand.

The ASX determined the option grant constituted a change in the nature and/or scale of Ventnor’s activities and brought ASX Listing Rules 11.1.2 and 11.1.3 into play.

This meant Ventnor has been required to seek shareholder approval for the proposed transaction and that it may not proceed should that approval not be given.

The company is also required to re-comply with ASX’s requirements for admission and quotation.

“When I was looking for ‘the right sand project’ for the company, I found Muchea,” Maluish explained.

“The sand at Muchea is extremely high-grade, it is, in fact, the largest high-grade silica sand Resource in the world.

“The key number here is 99.5 per cent silica – that’s what you can manufacture glass with, but it depends on the amount of iron, aluminium, titanium in it, to what quality glass you can produce.

“Normal glass has a green tinge, which is caused by the amount of iron, usually 100 to 200ppm.

“If you can get the iron content down to 50ppm you can produce ultra-clear glass, which is the hot product known as architectural glass, our product can meet that.”

Ventnor has been investigating markets in, and fielding enquiries from, the Asia-Pacific region for the supply of high-quality silica sand.

The company is keen to take advantage of the current environment brought on by the commodity’s increasing demand and diminishing supply from both the Muchea silica sand project and the complementary Arrowsmith silica sand project.


Ventnor Resources Limited (ASX: VRX)
…The Short Story

Level 1
6 Thelma Street
West Perth, WA, 6005

Ph: +61 8 9226 3780


Paul Boyatzis, Bruce Maluish, Peter Pawlowitsch


Aruma Resources – Pursuing a Major New Australian Gold Discovery

Aruma Resources (ASX: AAJ) is targeting large scale sediment- hosted gold deposits at its Eastern Goldfields project area in Western Australia.

With the Slate Dam project, it may be on the cusp of the state’s next major gold discovery.

There’s no such thing as a ‘quick chat’ with Aruma’s managing director Peter Schwann once he starts talking about the company’s 100 per cent-owned Slate Dam project.

Schwann has been around the industry longer than most, and was quick declare the Slate Dam project as, “The best gold project I have had in my entire career.”

Slate Dam is Aruma’s major project and is located 40 kilometres from the Western Australian home of gold mining, Kalgoorlie.

Further north, the company also has the Beowulf gold project, which it pegged in 2017, that covers 490 square kilometres of gold prospective greenstone sediments.

Schwann draws comparisons to Slate Dam from the Invincible gold deposit, being mined by global gold major Gold Fields at its nearby St Ives operation, which set a new discovery benchmark for gold explorers in the Western Australia goldfields.

The Invincible deposit is considered by market watchers as one of the most important gold discoveries in recent decades for many reasons.

Invincible highlighted potential for new substantial gold systems within an existing gold district, hosted by an alternate geological setting.

It also readjusted the way geologists regard lithological units within the region, which were previously thought to never contain gold.

Invincible broke all the rules by being a hydrothermal gold deposit formed near the geological contact between the Black Flag Group and Merougil Sediments.

Schwann revisited Aruma’s land package paying close attention to the potential of sediment-hosted gold deposits.

He concluded that Slate Dam could also potentially be hosting gold in the Black Flag Group.

In February, Aruma received results from its maiden drilling program of Slate Dam testing the project’s large seven square kilometre historical gold anomaly.

The drilling was highly successful and identified a 20m thick zone of gold mineralisation extending from surface to a depth of around 200m, which remains open.

The first results from the drilling included:

5 metres at 3.8/t gold from 10m; and

7m at 2.1g/t gold from 11m.

The intersection from SDRC20 was part of a 16m at 1.34g/t gold from 8m hit that resulted in Aruma discovering a new mineralised gold zone.

The results also continued to draw parallels to the initial Invincible discovery drill results, which included:

3m at 5g/t gold from 73m;

4m at 3g/t gold from 79m; and

6m at 2.3g/t gold from 46m.

Following the success of the maiden drill program, a second phase of drilling is already underway at Slate Dam, designed to provide further results towards what Aruma anticipates will be a substantial maiden Resource estimate.

“Our maiden drilling results immediately justified drilling the previously known gold anomalism and validated our sediment-hosted gold model at Slate Dam,” Schwann told The Resources Roadhouse.

“They also showed that the extent of that historic anomaly is limited only by the insufficient historic drilling and sampling.

“The importance of our strategy to control the whole stratigraphic belt, both at Slate Dam and Beowulf, also became evident demonstrating the favourable stratigraphic trends to the north and south could continue to extend mineralisation.”

The discovery of new large, high-grade gold anomalies at Slate Dam continued as predicted with new anomalies identified over an area of 1.3 kilometres in strike length and 250m in width, with a peak value of 444ppb gold plus 10 further gold zones of greater than 10ppb.

“The discovery of those anomalies extended the main gold system we discovered at Slate Dam,” Schwann said.

“More importantly, they provided immediate, high priority drill targets for our next phase of drilling.”

The new anomalies were identified during a recently completed geochemical program at Slate Dam, which included a soil sampling and a rock chip sampling program.

While all this was happening, Aruma added a 28sqkm exploration licence to Slate Dam covering the eastern side of the highly prospective Transfind Granite, which hosts the Trojan and Transfind open-pit gold mines.

It followed up by signing a binding Sale and Purchase Agreement with Westgold Resources (ASX: WGX) to acquire 100 per cent of the Trojan gold project (ML25/104).

Under the terms of the deal, Aruma issued six million fully paid ordinary Aruma Resources shares to Westgold as payment in full for the project.

Located approximately 55km south east of Kalgoorlie, the strategic acquisition of the Trojan project slotted into Aruma’s landholding like the vital piece of a jigsaw puzzle with anomalies traversing the tenement borders.

The Trojan lease fits the company’s belief in Slate Dam’s potential to host large sediment-hosted gold deposits.

Schwann considers the potential success lies in the geological dolerite dykes that dot the Slate Dam landscape.

“I love these dolerite dykes,” he said.

Schwann described the dolerite dykes as the old geological plumbing system of the region that the alluvial fluids emerged through.

He supported his thesis by listing the gold companies and the mines they had discovered near dolerite dykes.

The list included names such the Paddington gold mine of Norton Gold Fields that is located just south of a dolerite dyke.

He also cited the Kambalda area, host to Aruma’s benchmark Invincible deposit, which is also located adjacent to dolerite dykes

“The soil samples that returned the gold hits at Slate Dam were taken due north of a dolerite dyke,” Schwann explained.

“The Trojan open pit sits in between two dolerite dykes.

“So, we think the area we have now consolidated is very exciting.”

Trojan includes a JORC 2012 Indicated and Inferred Resource estimate of 2.8 million tonnes at 1.61 grams per tonne gold for 144,800 ounces of gold (at a 0.70g/t cut‐off) at the Trojan Open cut extension.

Aruma has received an up to date data base that it will appraise in the coming months.

The company considers there to be potential for Trojan to generate near-term cash‐flow from a resumption of mining operations at the project.

The main focus now is to evaluate the gold mineralisation under and around the Trojan open pit and undertake targeted exploration at the project.

The second phase of drilling at Slate Dam will consist of around 30 reverse circulation (RC) drill holes for a total of up to 4,000m, with planned drilling depths up to 200m.

This drilling will include extensional holes to follow up the 20m thick trend of gold mineralisation identified by the maiden drill program.

It will also include repetition holes, which are hoped to discover stratigraphic repetitions of the gold mineralised system to the east.

Drilling will endeavour to extend the dip and strike potential of the major gold shoots identified in the first phase of drilling and define higher grade lodes within these shoots.

Further drilling of a six-hole RC drilling program is also underway at the nearby Beowulf project that is to involve drilling depths of up to 100m.

Aruma’s Beowulf exploration model is the same as the model it has developed for Slate Dam, in which nuggets define the greywacke beds in between the underlying shale, which is the drill target for the discovery of gold lodes.


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

Level 1
6 Thelma St
West Perth WA 6005

Ph: +61 3 9321 0177



Paul Boyatzis, Peter Schwann, Dr Mark Elliott


Lithium Australia Closing the Lithium Economy Loop

Lithium Australia (ASX: LIT) is moving towards its goal of becoming the first Australian integrated lithium company capable of capitalising on all major sectors of the lithium supply value chain.

Lithium Australia’s ethos received industry support with the release of a report sponsored by the Association of Mining and Exploration Companies (AMEC) from the Future Smart Strategies think tank that identified opportunities awaiting Australia should it choose to take them.

Those opportunities pretty much sit in the hands of anybody who uses a mobile phone or computer, or drives an electric vehicle (EV), or uses any other modern technological lifestyle enhancing device.

These all use batteries – lithium-ion batteries (LIBS) to be precise – which is fast becoming the most important sector on the planet.

The AMEC sponsored Future Smart Strategies report claimed the compound growth estimates baseline for the battery energy storage sector to be above 10 per cent per annum, adding that some estimates indicate periods of year on year growth of 50 per cent peaking during the mid-2020’s.

It highlighted factors expected to impact on these figures, including consumer technology adoption rates, cost reduction, impact of environmental policies, functional convenience and competition between new and existing manufacturers.

“It is also accepted that Lithium, due to its availability and chemical ability to efficiently mobilise electrical charge, will remain as the key material component of these batteries well beyond 2030,” the Think Tank said.

“Exploiting lithium as an energy store has allowed EVs and other weight-sensitive electronic applications, such as mobile electronics, power tools and, most recently, robots and drones, to become ubiquitous.”

According to Future Smart Strategies, the opportunity currently sitting in Australia’s lap stems from the many local advantages it enjoys within the global lithium industry.

Australia currently mines most of the world’s lithium and all minerals necessary to domestically manufacture batteries.

Future Smart Strategies threw down a lithium gauntlet, declaring, “Now is the time for Government and industry to act as other supplier countries are already acting to value-add downstream.”

If there were such a thing as a lithium-ion battery powered crystal ball, then Lithium Australia would have the right to claim being the first to put it to use.

The company has been involved in the research and development of chemical processing technology for the economic recovery of lithium from spodumene and lepidolite minerals since 2014.

During this time, LIT it has progressed development of the company’s SiLeach® process, a halogen-accelerated sulphuric-acid leach processing technology that efficiently digests and recovers metal values from treated minerals, without the need for high temperature, or energy and environment intensive roasting of typically refractory lithium minerals.

It can be used across a wide range of lithium feedstock beyond the usual spodumene, including mica, using low energy consumption, producing high metal recoveries and extensive by-product credits.

LIT believes commercialisation of the SiLeach process will allow exploitation of micas, the most common lithium minerals, which are currently considered waste.

LIT has received confirmation from patent authorities of the SiLeach process’ novel, inventive and industry application.

Lithium Australia completed a preliminary feasibility study (PFS) in July 2017, on the application of the revolutionary SiLeach® technology to the recovery of lithium chemicals from micas.

The study enhanced the company’s confidence in the process with engineering design studies and financial modelling demonstrating a large-scale pilot plant (LSPP) using the SiLeach® process can produce lithium chemicals from waste micas on a competitive basis.

The studies also identified multiple avenues for more substantial capital and operating-cost reductions.

LIT believes the construction and operation of the LSPP to be a necessary step in the successful commercialisation of the SiLeach process.

Operation of the LSPP will allow the company to integrate data collected on an industrial scale to evaluate its next aspirational step, which is full commercial production.

The LSPP is designed to produce lithium carbonate equivalent (LCE) at an annualised rate of 2,500 tonnes from approximately 27,500 tonnes of lepidolite mica feed (to a maximum grade of 4.5 per cent lithium dioxide (Li2O)).

Output of this scale is approximately one-tenth the scale of output of a full-scale commercial lithium carbonate production facility.

Production of by-products could also be part of the LSPP’s development with by-products like potassium sulphate (K2SO4), sodium silicate (Na2SiO3), caesium (Cs) and rubidium (Rb) potentially produced using the SiLeach process.

“Being able to advance the SiLeach process to an industrial scale is a critical element in the research and development required to bring a superior process into the lithium industry,” Lithium Australia managing director Adrian Griffin told The Resources Roadhouse.

“We are confident of success, which will subsequently enable us to utilise mine waste in the production of lithium chemicals – that is one of our great sustainability goals.

“Our technology offers a solution to the problem of the large quantities of lithium continue that continue to be discharged to waste streams emanating from the production of a range of industrial minerals.

“Such waste streams, which most commonly contain lithium micas, may very well prove the most cost-effective source of primary lithium.

“The development of more efficient processing technologies to allow exploitation of such materials is a major corporate achievement of Lithium Australia.”

Lithium Australia understands a rapidly expanding battery industry needs to plan a sustainable future, which will require better utilisation of primary resources, higher rates of recycling energy metals from LIBS and improved battery production techniques.

Less than 10 per cent of batteries in Australia are recycled and most of the lithium waste produced from mining operations, both here in Australia and globally, is discharged to tailings.

Lithium Australia looking to ‘close the loop’ and create a circular economy for the production and utilisation of LIBs and is integrating technologies to achieve that outcome.

It recently finalised due diligence for the acquisition of advanced cathode material producer, the Very Small Particle Company (VSPC), which owns a proprietary process to produce advanced high-quality lithium iron phosphate battery cathode nano-powder material, a pilot plant situated in Brisbane Australia, complete with advanced laboratory and testing facilities.

LIT also announced an Inferred Mineral Resource of 25 million tonnes grading 0.45 per cent Li2O at the Sadisdorf tin-lithium-tungsten project in Germany, where it is farming into a joint venture (JV) with Tin International AG.

“We have demonstrated SiLeach can unlock Sadisdorf as a true polymetallic operation, recovering lithium from residues of conventional tin concentration processes,” Griffin said.

“The Sadisdorf resource has potential to feed a 25,000 tonnes per annum lithium carbonate plant for 10 years.

“Sadisdorf has similar grades to the nearby Cinovec deposit (Czech Republic) and is not far from the Zinnwald deposit of Deutsche Lithium GmbH.

“All of these deposits have similar characteristics, making them difficult, if not impossible, to commercialise using conventional lithium processing technology – SiLeach provides the solution.

“We are where the most rapidly expanding consumption of lithium is happening outside China, which means Lithium Australia is are well placed to take advantage of that expanding market.”


Lithium Australia NL (ASX: LIT)
… the short story

Level 1,
675 Murray Street,
West Perth WA 6005

Ph: +61 8 6145 0288


Adrian Griffin, George Bauk, Bryan Dixon


Corazon Mining Poised to Deliver in 2018

An active, targeted and focused approach sees Corazon Mining on the cusp of delivering on the potential of its two core projects.

Corazon Mining (ASX: CZN) has always had a strong direction and focus at both its projects – the Lynn Lake Nickel Sulphide Project in Manitoba Province, Canada, and the Mt Gilmore Cobalt Project in northern New South Wales.

Thanks to recent exploration efforts the company is now better placed than ever to reap the rewards for its efforts.

Corazon completed the acquisition of the entire Lynn Lake nickel-copper sulphide Field, historically one of Canada’s largest nickel producing regions, in 2015.

It was the first time the Lynn Lake Mining Centre had been consolidated under the ownership of one company.

Since that time, Corazon Mining has systematically explored the project area; a process that has seen the company define and continually refine its priority targets over three completed field seasons.

This work has included drilling, ground geophysics, downhole geophysics and geochemistry, and has resulted in detailed geophysical and geochemical models for the stand-out target, at the Fraser Lake Complex (FLC), located five kilometres south of the Lynn Lake Mining Centre in the southern region of the company’s project tenure.

With this work complete, at time of writing, the company had confirmed new high priority drill targets and was finalising preparations for its next phase of drilling at FLC – and, with the high amount of positive, supporting exploration data generated to date combined with a highly evolved technical interpretation of these results, there is a heightened level of anticipation about the potential of the upcoming drilling program to deliver a major new nickel sulphide discovery.

Now it becomes a case of ‘watch this space’.

Corazon’s focus at the Mt Gilmore project is the Cobalt Ridge prospect, which hosts one of the highest-grade cobalt deposits in Australia.

“What is important to note, is that it is a ‘pure-play’ cobalt sulphide prospect, not a re-badged nickel – make that cobalt – laterite target, which should equate to a simpler, easier and more cost effective processing flow sheet for any future mining operation,” Corazon Mining managing director Brett Smith told The Resources Roadhouse.

“The company acquired the Mt Gilmore project in mid-2016.

“It is located 35km from the major regional centre of Grafton in north eastern New South Wales.

“Corazon Mining owns a 51 per cent interest in the project and has the exclusive right to earn up to an 80 per cent interest in the project.”

Consistent with its approach to Lynn Lake, the company has systematically advanced exploration at Mt Gilmore with similar strong success.

It has completed two substantial drilling programs at Mt Gilmore – one in the second half of 2016 and a second phase program in late 2017.

Drilling, primarily targeted the high-grade Cobalt Ridge prospect, and assay results have continued to validate Cobalt Ridge as a unique, high-grade, cobalt-dominant deposit.

Two phases of metallurgical test work have also been completed on Cobalt Ridge mineralisation, and this work has delivered exceptional results, which has strengthened the company’s view on the development potential of the project.

Corazon believes Cobalt Ridge may have the potential to supply a quality cobalt product, suitable for use in the emerging lithium-ion battery and rechargeable battery sectors.

As with most success stories, timing plays a key role.

This point is not lost on Corazon as it eyes the development of its cobalt asset at the same time that global demand for ‘technology metals’ (like cobalt, lithium and graphite) is expected to surge as the commercial adoption of these new battery technologies begins to take hold.

Cobalt is a critical component of next generation batteries.

The price of cobalt has already experienced sharp growth – from around US$22,000 per tonne in February 2016, to around US$40,000 per tonne in February 2017 and now to a long term high of more than US$80,000 per tonne – and the outlook remains strong.

Add in the fact that current global supply is constrained and skewed toward African production, and it is easy to grasp the huge opportunity that Mt Gilmore project represents for Corazon.

“Our recent metallurgical test work at Cobalt Ridge yielded recoveries of 93.6 per cent cobalt and 98.4 per cent copper,” Smith said.

“The concentrate mass represented only five per cent of the initial mass feed, with the concentrate grading at 2.02 per cent cobalt and 5.18 per cent copper.

“Also, it is important to note that this metallurgical test work was from lower grade material than the Phase 1 test work, yet still delivered these exceptional results.

The test work is on-going and is focused on defining down-stream concentrate processing options and detailed process engineering studies, as part of the wider development plan for the project.”

All results from the most recent drilling program have been reported.

Drilling has highlighted multiple cobalt, copper and gold mineralised trends.

The Main Cobalt Lode has been the primary drill target and is up to 25 metres in true width and contains multiple narrow zones of higher-grade mineralisation.

Mineralisation at the Main Cobalt Lode is open in all directions, and there is considerable scope to define extensions, and to define additional parallel lodes.

Geochemical and geophysical surveys are currently underway, and this work will assist in defining new drill targets for the next phase of drilling.

In the immediate short term though, the focus returns to the FLC at Lynn Lake.

Corazon’s exploration at the FLC to date has resulted in the discovery of a large magmatic sulphide system with the potential to host substantial nickel-copper sulphide deposits, and all holes drilled in the previous round of drilling were mineralised over their entire lengths.

The FLC has the physical and chemical characteristics that suggest it is prospective for hosting large, Lynn Lake-style nickel-copper-cobalt deposits, and the company’s drilling has confirmed this potential, consistently intersecting Lynn Lake mine-grade nickel-copper-cobalt mineralisation.

The missing piece in the model remains the pursuit of a discovery hole at the FLC, which puts Corazon’s current activities at the project into sharp focus.

The management of two potentially company-making projects is no small feat for a listed junior resources company, but it is something Corazon has handled exceptionally well – due in part to the seasonal variances of each project; field work at Lynn Lake is best undertaken in the northern winter where the frozen surfaces make access and work easier, and the company has been able to focus on Mt Gilmore through the winter months in Australia.

Also, due to the quality of the projects and their obvious potential to deliver value, Corazon has always enjoyed dedicated support for its capital raising activities, which have allowed it to continue to advance both projects.

It is fully funded for its current planned activities at both projects.

The ongoing exploration success at both the Mt Gilmore and Lynn Lake projects continues to provide Corazon with dual, highly exciting opportunities with the potential to deliver much value for shareholders, and it remains focused on delivering this on both fronts.


Corazon Mining Limited (ASX: CZN)
…The Short Story

Level 1
329 Hay Street
Subiaco WA 6008

Ph: +61 8 6142 6366


Clive Jones, Brett Smith, Jonathon Downes, Adrian Byass


Blackstone Minerals Consolidating Canadian Cobalt

Blackstone Minerals (ASX: BXS) listed on the ASX in January 2017 on the back of three Western Australia-based projects.

The Red Gate and Middle Creek gold projects and the Silver Swan South gold-nickel project all provided encouraging results and attracted a good deal of investor attention during the company’s first few months on the Australian bourse.

However, it was an opportunity to provide its shareholders with exposure to the potentially lucrative and fast growing cobalt market that Blackstone Minerals just couldn’t pass up.

In July, Blackstone Minerals entered into a binding Heads of Agreement to acquire 100 per cent of the Little Gem project, located in British Columbia, Canada.

“Our three Australian assets are all very good early exploration projects; however, our aim has always been to find a company making asset, which is what we believe Little Gem has the potential to be,” Blackstone Minerals managing director Scott Williamson told The Resources Roadhouse.

The Little Gem project was discovered in the 1930s by prospectors who identified a pink cobalt-bloom on weathered mineralisation.

There has been very little modern-day exploration conducted at Little Gem with the main activities being airborne geophysical surveys, including magnetic, radiometric and electromagnetic (EM) surveys carried out in the 1970s and a further two drill holes completed in 1986.

Work undertaken by the original explorers resulted in the development of three adits with drilling carried out underground and detailed channel sampling taken.

Results from this work generated some exceptional cobalt and gold assays including:

Surface channel samples of massive sulphides returning assays up to:

0.4 metres at 5.7 per cent cobalt and 1,574grams per tonne (≈50oz) gold.

Underground adit channel sampling of massive sulphides returned multiple high-grade intersections including:

1.8 m at 4.4 per cent cobalt and 73g/t gold; and
2m at 3.1 per cent cobalt and 76g/t gold.

Historic underground drilling from adits returned multiple intersections including:

1.8m at 2.4 per cent cobalt and 112g/t gold;
3.3m at 1.4 per cent cobalt and 12.3g/t gold; and
2.9m at 0.9 per cent cobalt and 12g/t gold.

High-grade cobalt and gold mineralisation was demonstrated to be open along strike and down dip.

Blackstone Minerals’ move into the cobalt space had it playing catch up to other companies that had entered earlier, but it didn’t take long for it to make its mark.

The first hole drilled as part of the company’s maiden drilling program at Little Gem intersected massive, semi-massive and disseminated mineralisation, returning:

4.3m at 1 per cent cobalt and 15g/t gold, including 1.1m at 3 per cent cobalt and 44g/t gold.

Importantly, these initial results were consistent with the historic drilling and adit channel sampling data.

The first hole only tested the upper portion of the mineralised target but was able to identify multiple zones of massive sulphide (cobalt-gold) mineralisation within a broader alteration halo.

“After finalising the acquisition around September 2017, we were able to hit the ground immediately,” Williamson said.

“The very first hole confirmed the data we had inherited and gave us confidence that we really are onto something at Little Gem.

“Our belief is growing that we are dealing with something that could be one of the highest-grade cobalt-gold targets in the world today.”

With the project demonstrating its potential, Blackstone became eager to see how the geological setting shaped up against other, world-wide, cobalt-gold occurrences.

The one that stood out was the Bou-Azzer primary cobalt district in Morocco where cobalt has been mined for the past 75 years.

“There are fifty different deposits within that belt, not just cobalt, a lot of other metals too, it is a highly-endowed base metals province, which has produced over 100,000 tonnes of cobalt metal,” Williamson said.

“What we have been able to determine is that we have the same geological setting as Bou-Azzer with the contact between serpentinized ultramafics and granodiorites at Little Gem.”

Galvanised by the geological outcome, Blackstone made its next move, which was to acquire the extensive land holdings along strike from Little Gem, giving the company control of an impressive land position over the proven high-grade gold and cobalt mineralised belt.

The acquisition increased the Little Gem project’s land tenure to approximately 335 square kilometres while taking the target strike zone from 12 kilometres to over 48 kilometres.

“The similarity to Bou-Azzer was hard to ignore and was the impetus behind pegging the entire belt wherever that same setting occurred,” Williamson explained.

“We now have four times the strike extent potential and we believe we could be sitting on something that is much larger than the couple of prospects we made the original acquisition on.

“This district has been well-explored and is well-understood for gold, but we are the first to be looking here for cobalt, and the first, we believe to understand the geology and the similarities to Bou-Azzer.”

The work Blackstone has carried out to date has not only verified the previously identified mineralisation at the Little Gem prospect.

It has also provided information on the Jewel gold-copper prospect and discovered a new high-grade gold-copper prospect named Roxey.

The Roxey gold-copper prospect is located 1.5km west-southwest of Little Gem and sits along strike to that prospect’s cobalt–gold mineralisation.

Blackstone visually identified Roxey while undertaking due diligence on Little Gem, taking rock chip samples within the target area, which assayed up to 24g/t gold, 1.9 per cent copper and 24g/t silver.

Mineralisation at Roxey is associated with quartz-pyrite altered diorite containing chalcopyrite.

Surface rock chip samples were also taken to verify the mineralisation at the Jewel prospect, located 1.1km north-northeast of Little Gem.

These returned assays of up to 98g/t gold and 3.2 per cent copper.

Blackstone interpreted these results to confirm its earlier investigations that revealed historical samples of up to 0.6m at 75g/t gold and 0.45m at 153 g/t gold from underground and surface channel sampling and up to 6.9g/t gold, 19.25 per cent copper and 137g/t silver from underground rock chip sampling.

Mineralisation at Jewel sits in a serpentinized ultramafic near the easterly trending/steep south dipping contact with the quartz diorite/granodiorite that hosts the Little Gem prospect.

“Jewel and Roxey aren’t cobalt targets, they’re copper-gold targets,” Williamson explained.

“So again, we are dealing with geology similar to Bou-Azzer, this time being multiple base metals occurrences with high gold grades.

“This is the sort of mineralisation that will work in any commodity price environment.

“We don’t need the cobalt price to keep running for this project to work.”

Blackstone’s immediate focus is the completion of the maiden drill program at Little Gem to follow up the outstanding initial results and to further understand the full potential of the prospect.

This is expected to reboot in Q2 2018 with drilling focused on delineating the extents of the mineralisation with potential to deliver a maiden resource in the medium term.

“We are very pleased that we have been able to make such rapid progress at Little Gem,” Williamson said.

“We have already moved it along to be a project with real scale in a district that hosts such compelling high-grade cobalt and gold mineralisation.

“We can’t wait to complete an aggressive exploration campaign over the coming year.”


Blackstone Minerals Limited (ASX: BSX)
…The Short Story

Suite 3, Level 3
24 Outram Street
West Perth, WA, 6005

Ph: +61 8 9425 5217


Hamish Halliday, Scott Williamson, Andrew Radonjic, Steve Parsons, Bruce McFadzean, Michael Konnert


Azure Minerals Eyes Mine Potential at Oposura

Azure Minerals (ASX: AZS) is drilling up an initial Mineral Resource at the company’s high-grade zinc and lead Oposura project, located in the northern Mexican state of Sonora.

Azure Minerals is no stranger to Mexico where it has the Mesa de Plata and Loma Bonita silver-gold deposits on its Alacrán project, where Teck Resources is earning a 51 per cent interest.

The 771 hectare Oposura property is located on the same Laramide Copper Trend, that extends from Arizona to central Mexico, as the Mesa de Plata and Loma Bonita deposits.

Oposura is 150 kilometres by road northeast from Hermosillo, the capital city of Sonora where Azure has its Mexican-based exploration and administration office.

The project contains a mineralised zone hosting massive, banded, and disseminated sulphides containing high-grade zinc, lead and silver mineralisation.

The mineralised zone forms an extensive, relatively flat-lying horizon influenced by minor small-scale folding and faulting.

“Put more simply, this material is massive sulphides, and it outcrops at surface under a gently sloping hill,” Azure Minerals managing director Tony Rovira told The Resources Roadhouse.

“A large proportion of the mineralisation will be able to be extracted by open pit, but not like a standard open pit.

“Because the deposit outcrops on the side of a hill, we will basically be taking a scallop off the side of the hill.

“When we reach the point where the pit wall is tall enough we will go underground using a room and pillar mining method, as mineralisation is mostly horizontal.”

For a project of its potential, Oposura has been inexplicably neglected for many years.

Major mining companies Anaconda Copper Company and Mexican company Industrias Peñoles both conducted exploration and exploratory mining activities on the project between the 1940s to 1970s.

This work developed over 500m of mine tunnels within the ore zone, small-scale trial stoping to provide bulk samples for metallurgical testwork, and about 100 surface and underground diamond drill holes.

Of course, these results – although plentiful – are not up to speed in terms of JOC Code 2012 compliance, which means Azure needs to bring the project into the 21st century.

Azure began its drilling at Oposura last year with the aim of completing a Mineral Resource estimate by April 2018.

The resource drill-out covers known mineralisation identified by historical exploration, upon which Azure released an Exploration Target for Oposura of 2.5 to 3 million tonnes grading 10 to 12 per cent zinc plus lead (Zn+Pb).

“We have results for over one hundred diamond holes previously drilled along with the drill logs and assay sheets, so we are confident we know what’s there already,” Rovira said.

“We are replicating some of the drilling and that will give us confidence to utilise some of the historical drill results as well.

“The current drilling entails twinning of some of the historic holes, with others being drilled just nearby, or in between earlier holes.

“So far, every hole we have drilled has replicated the historical results.

“We are confident the historical resource will be updated to JORC 2012 standard and will be similar to what was produced historically.

“We see ourselves as having a deposit there that just needs to be defined and then published – and that is exactly what we intend doing.”

By the end of January 2018, Azure had completed 110 diamond drill holes for approximately 7,200m of the planned resource drill-out program.

Interestingly, most of the holes drilled along the eastern part of the deposit intersected fresh, unoxidized, massive sulphides within 10 metres of surface.

This was consistent with previous sampling of near surface mineralisation in the historical underground workings and is a good indication for an initial open pit mining operation in this area.

Most recent assay results have shown further near-surface, high-grade zinc and lead mineralisation intersected in the East Zone, including:

2 metres at 42.6 per cent Zn+Pb from 37.5m;

2.9m at 16.1 per cent Zn+Pb from 18.9m;

2.1m at 15.4 per cent Zn+Pb from 27.9m; and

2.2m at 14.2 per cent Zn+Pb from 15.2m.

The result from OPDH-036 extended the high-grade mineralisation south of a previously reported hole:

16.6m at 22 per cent Zn+Pb, including 9.3m at 36.9 per cent Zn+Pb.

Mineralisation was extended 170m to the west of surface outcrop by drill hole OPDH027:
2.65m at 10.4 per cent Zn+Pb

The mineralised horizon remains open in that direction.

“We currently have three rigs drilling at Oposura and should have the resource drill-out completed towards the end of February,” Rovira said.

“We will be working on the resource estimation during February and March, which means by April, we should be able to publish our initial Minerals Resource.

“We expect it will be in line with the exploration target we previously released.”

Once the current resource drill-out program is complete, Azure will continue drilling to expand the area of currently defined mineralisation and, ultimately, the resource, and to explore for repetitions and extensions of the mineralised zones.

Preliminary metallurgical testwork at Oposura produced positive results highlighting excellent recoveries of commercial-grade concentrates of lead-silver and zinc concentrates.

Flotation tests demonstrated consistent zinc recoveries exceeding 70 per cent producing zinc concentrates grading 55 per cent zinc, and lead recoveries exceeding 80 per cent with lead-silver concentrates grading more than 55 per cent lead and greater than 300 grams per tonne silver.

“As this is a flat-lying sulphide deposit we envisage it being a very simple mining operation.

“From a processing point of view – being sulphides – it floats like a dream, producing a very high-grade lead-silver concentrate and another, high-grade zinc concentrate, with very good recoveries.

“It is a crushing, grinding, flotation produced concentrate with no contaminants and we are already getting interest from various metal smelters who would like to put their foot on the product.”

Azure believes Oposura is a feasible development option for a company of its size.

Because of the size of the project, Azure is eyeing development options most likely be processing in the order of 300 to 400 thousand tonnes per annum to produce perhaps 25,000 to 30,000 tonnes of metal in separate high-grade zinc and lead concentrates per annum.

“At about 1,000 tonnes per day, it is modest in size, but it is achievable for a company of our size to build a mine and processing plant that will facilitate that,” Rovira said.

The company’s confidence reflects what is happening elsewhere in the district with other companies with similar deposits and grades completing studies have determined capital costs of around $30 to $40 million.

“We see something around $30 to $40 million capex for the project being what a company our size can do without selling the farm to get it, Rovira continued.

“The other benefit of having such a relatively compact deposit is that it doesn’t require a long lead-time feasibility study to bring it to fruition.

“We see a scoping study being completed around the middle of 2018, and then going directly to a feasibility study to be ready by the middle of 2019 and a decision to mine shortly thereafter.

“We consider the Oposura project as being the ideal opportunity for us to be able to transition from junior explorer to becoming a mining company.”


Azure Minerals Limited (ASX: AZS)
…The Short Story

Level 1, 34 Colin Street
West Perth, WA 6005

Phone: +61 8 9481 2555


Peter Ingram, Anthony Rovira, Wolf Martinick


Diversified approach to reap rewards for Pioneer Resources

With the Sinclair Zone Caesium Project rapidly advancing towards production and exploration success on multiple fronts, Pioneer Resources’ (ASX: PIO) diversified project development strategy is poised to bear fruit.

Pioneer Resources has always taken a diversified approach to delivering value to shareholders.

Knowing that pinning a company’s hopes – and funds – on the success of a single project is an extremely high-risk, albeit, high-return strategy, Pioneer has adopted a ‘portfolio approach’ to its exploration strategy.

“As a company, we have always sort to maintain and develop a portfolio of projects and prioritise the allocation of funding and resources to them based on our assessment of their potential to deliver shareholder returns,” Pioneer Resources managing director Crook told The Resources Roadhouse.

“It requires both a technical and commercial approach to help ensure that we are pursuing the right projects and over time we have refined our targeting and identification processes, and it helps that we have a board with a strong mix of technical and corporate knowhow.

“Pioneer has assessed and explored a number of projects and have and added and subtracted to our project portfolio accordingly, but we feel extremely pleased with the current projects within the company – to the point where we believe the Pioneer project portfolio has never been stronger, nor has the company been in a better position to realise value for shareholders.”

That optimism is based on a portfolio of projects in key, global demand-driven commodities, all strategically located relative to requisite infrastructure in jurisdictions with low sovereign and geo-political risk.

Pioneer’s most advanced project, and current core focus, is the Sinclair Zone caesium project, located within the company’s 100 per cent-owned Pioneer Dome lithium-caesium-tantalum (LCT) roject in the Eastern Goldfields of Western Australia.

The company continues to advance the project towards production – with mining activities scheduled to commence in the following quarter.

Pioneer made its world class caesium discovery at the Sinclair Zone, as part of its LCT focused drilling programs at Pioneer Dome, in October 2016.

The caesium at the Sinclair Zone presents as the mineral pollucite, a rare caesium mineral found in extremely differentiated LCT pegmatite systems.

The Sinclair Zone project has a JORC 2012 pollucite Mineral Resource Estimate of 10,500 tonnes of pollucite at 17.1 per cent caesium oxide (Cs2O) in the Measured category, which makes it the world’s third largest known pollucite deposit.

Pollucite is a high-demand niche commodity with a lack of ready substitutes.

It is primarily used in the manufacture of caesium formate brine, a high-density fluid used in high temperature-high pressure oil and gas drilling.

It acts as a lubricant and helps deliver higher production rates, and is non-corrosive on drilling equipment and can enhance hydrocarbon recovery, plus it is largely non-detrimental to the environment.

The world’s supply of pollucite is highly constrained and the Sinclair Zone project has the potential to be a high margin operation for Pioneer and contribute significantly to global pollucite supply.

With this is mind, Pioneer is committed to the project’s rapid development, which continues apace.

Key agreements required to facilitate the commencement of mining are in place.

A Mining Lease (and Miscellaneous Licence) has been granted, and a Heritage Protection Agreement and a Mining Agreement with the traditional owners, the Ngadju Native Ti Ngadju Native Title Aboriginal Corporation, have been reached.

In addition, archaeological and anthropological heritage surveys have been completed and no objections have been raised for the Sinclair Zone project to proceed to mining.

Mine planning and permitting is ongoing with Flora and Fauna surveys concluded and a Clearing Permit lodged, a Project Management Plan has been submitted to the WA government and a detailed Mine Plan is progressing.

Discussions with potential off-takers continue to advance.

Drilling is currently underway, to further define the pollucite deposit.

Due to the high value of pollucite, Pioneer has reduced drill spacing to a nominal 10m by 5m pattern and results, which are due in March, will be used to help finalise the pit design and mine schedule.

In addition to the project’s pollucite, the Sinclair Zone hosts other minerals that may potentially also be commercially extracted and have a significant positive economic impact on the project.

These include lepidolite and microcline (potassium feldspar) and the company is in ongoing discussions with interested third parties.

Pioneer’s exploration projects have also delivered exceptional results, validating its diversified project portfolio approach.

The company recently completed highly successful cobalt and nickel sulphide drilling programs at its Golden Ridge project and has also commenced its next phase of drilling at its Mavis Lake lithium project in Canada, plus further LCT-focused exploration drilling at Pioneer Dome.

The Golden Ridge project is located south east of Kalgoorlie in WA and hosts substantial areas prospective for lateritic cobalt as well as nickel sulphides.

Pioneer recently completed a 31 hole – 3,084 metre reverse circulation drill program over four cobalt targets (Rocket, Leo’s Dam, Anomaly 13 and Anomaly 14 Prospects) at Golden Ridge.

The results were highly positive with 16 holes intersecting cobalt mineralisation; with a highest grade of 1.6 per cent cobalt, and a thickest intersection of 31m at 0.15 per cent cobalt from a depth of 43m.

Pioneer’s nickel sulphide focused drilling at Golden Ridge was also successful, intersecting nickel sulphide mineralisation of 22m at 1.02 per cent nickel and 475ppm copper from 202m.

“This discovery of a broad zone of disseminated nickel sulphides is highly significant,” Crook said.

“It validates and strengthens Pioneer’s nickel sulphide geological model for the project as being analogous to other major nickel sulphide mining camps in the region, such as Kambalda and Widgiemooltha.

“And, based on the success of these programs, planning for the next phase of field work at Golden Ridge to further unlock the project’s lateritic cobalt and nickel potential has already commenced.”

The Mavis Lake project provides another potentially valuable string to Pioneer’s bow.

Pioneer has an Option Agreement and Strategic Alliance with International Lithium Corp (TSX.V: ILC) to earn up to an 80 per cent interest in the Mavis Lake, and Raleigh, lithium projects, in the province of Ontario.

Drilling at Mavis Lake has consistently intersected spodumene-bearing pegmatite mineralisation and the current phase of drilling – an initial 1,200m diamond drilling program commenced in January – is no exception.

This drilling is targeting extensions to spodumene-bearing pegmatites intersected at the Fairservice prospect in the previous round of drilling.

The first hole in the current program intersected three spodumene-bearing pegmatites, including one with a down-hole thickness of 20m (from a depth of 82m).

Drilling is ongoing and is expected to be completed and all results available by the end of March.

It is worth noting the strong focus within Pioneer’s project portfolio on lithium and cobalt.

Both are acknowledged as core components in next generation battery and energy storage technologies, and with global demand for these ‘technology metals’ expected to surge over coming years as mainstream commercial adoption comes online, Pioneer will continue to pursue the development of its projects as a core priority.

With the Sinclair Zone project on schedule for production in the near-term and continued strong results from its exploration activities, 2018 is shaping as a year of value delivery for Pioneer and its shareholders.


Pioneer Resources Ltd. (ASX: PIO)
… The Short Story

21 Ord Street
West Perth WA 6005

Ph: (08) 9322 6974


Craig McGown, David Crook, Wayne Spilsbury, Allan Trench


Metalicity Increases WA Zinc Footprint

Metalicity Limited (ASX: MCT) recently increased the company’s zinc presence in the northwest of Western Australia with the purchase of two under-explored projects.

Metalicity strengthened its zinc project pipeline with the acquisition of the high-grade Napier Range zinc project and the Emanuel Range zinc project.

The combination of the two projects equals the Lennard Shelf zinc project, located in the Lennard Shelf of the Kimberley Region, WA.

Metalicity views Napier Range as a low capital and near term producing zinc production opportunity, while Emanuel Range represents an early stage but highly prospective zinc exploration project with an extensive 30 kilometres strike of largely untested targets.

The company believes these projects will complement the development of its large scale long life Admiral Bay zinc project, located in the adjoining Canning Basin of the Kimberley Region.

The Admiral Bay zinc project is one of the world’s largest undeveloped zinc projects and contains an extensive mineralized corridor over an 18 kilometre strike.

Metalicity has established a JORC Code 2012-compliant Inferred Mineral Resource at Admiral Bay measuring 170 million tonnes at 7.5 per cent zinc equivalent (ZnEq) (4.1 per cent zinc, 2.7 per cent lead, 25 grams per tonne silver) at a cut-off grade of 3 per cent zinc plus lead (Zn+Pb).

This includes a higher-grade zone of 20 million tonnes at 10 per cent ZnEq at 7.7 per cent ZnEq cut-off.

“The acquisition of the Lennard Shelf zinc project provides more than one focus for the company,” Metalicity managing director Matt Gauci told The Resources Roadhouse.

“It delivers one near-term zinc producing asset and one highly prospective zinc exploration asset that will be of significance in our future development.

“The Napier Range zinc project is a potential high-grade, low-capital, near-term zinc development project that complements the pathway for our 100 per cent-owned Admiral Bay zinc project.

“We have already had positive results from field work, exploration targeting and base case financial modelling at Napier Range and we are keen to commence an aggressive exploration program to determine the project’s capacity to provide a source of cashflow for our ongoing advancement of the long-life Admiral Bay zinc project.

“At the same time, we will be seeking new discoveries at the Emanuel Range zinc project.”

The Napier Range zinc project is the most advanced of the recent acquisitions consisting of two granted mining licenses, an exploration license application and a granted general purpose license.

It comes with an already established JORC 2012 compliant Inferred Mineral Resource Estimate (MRE) at the Wagon Pass deposit, measuring 750,000 tonnes at 5.8 per cent zinc, 7.2 per cent lead, 54g/t silver (13.6% ZnEq).

It also hosts an adjoining Exploration Target Range (ETR) of 100,000 to 200,000 tonnes at 10 to 15 per cent zinc equivalent.

At Napier Range, Glencore and Teck (via Lennard Shelf Pty Ltd (a 50:50 joint venture) retain an option to earn a 51 per cent participating interest in the Wagon Pass tenements if a new JORC Inferred Resource has been discovered, by either completing and sole funding a Feasibility Study, or spending $20 million on the assessment of the inferred resources.

A report by independent geological consultant CSA Global, determined that extensions to the Wagon Pass deposit, and additional deposits, are considered likely if the project were to be systematically explored.

The report outlined nine targets, one for resource extensions to the Wagon Pass deposit and eight further targets, adding that that the area is underexplored.

Metalicity has a program of resource and exploration drilling planned for the March Quarter within the Wagon Pass deposit.

The drilling will also test along the four-kilometre strike extent at Napier Range, subject to requisite approvals and completion of the wet season.

As the Wagon Pass mineralisation is still open to the west, part of the upcoming drilling will entail two holes designed to test the N1 target area for a potential western and north-western extension of the mineralisation.

The holes are vertical and have been designed to test the Lower Napier Dunr5 and 4 units hosting most of the Wagon Pass mineralisation.

“Wagon Pass is of particular interest in that the mineralisation indicates there could be potential to extend the current resource to west of the deposit,” Gauci said.

“Although the remaining eight targets are located further south, they are sitting mostly in analogous settings to Wagon Pass.

“The CSA report noted that the drilling had occurred in the project area, but many of those drill holes did not test the favourable Lower Napier stratigraphy.”

The remaining eight targets are located further south, and along strike of the Wagon Pass deposit, mostly in analogous litho-stratigraphic settings within that favourable Lower Napier stratigraphy.

Metalicity agrees with CSA in that the area has been under-explored for additional deposits of the 0.5 to one million tonnes size.

“The targets for the upcoming program were selected based on having similarities with the existing Wagon Pass deposit in terms of interpreted stratigraphic position, overall geological setting, geophysical character, and proximity to exploration drilling and rock ship sampling results,” Gauci explained.

“The 750,000 tonnes ‘footprint’ of the existing Wagon Pass Mineral Resource guided the anticipated range in size of the targeted mineralisation, of between around 0.5 to one million tonnes per target.”

The Emmanuel Range zinc project is less advanced, but by no means any less-important.

It consists of one exploration tenement and two tenement applications near the Pillara, Kapok, Cadjebut and Goongewa Mines, in the Emmanuel Range of the Kimberley Region.

All the Emmanuel Range tenements cover the prospective stratigraphy and structural positions, in very close proximity to existing deposits or mines.

For example, E04/2453 is located less than two kilometres from the Pillara deposit, the largest Lennard Shelf lead-zinc discovery.

Funding for the upcoming drilling has been secured through a recently completed private placement to Australian and international institutional and sophisticated investors.

The placement was co-lead by Echelon Wealth Partners Inc. and Paradigm Capital Inc to raise $2.61 million via the issue of 58.25 million shares at 4.5 cents per share, with a 1 for 2 free attaching option exercisable at eight cents with a five-year term.

Besides being used to undertake resource and exploration drilling at the Napier Range project, the cash will also be put towards progressing Pre-Feasibility Studies (PFS) at the Admiral Bay project.

It will also be of assistance as the company undertakes due diligence and evaluation of a dual listing on the TSX Venture Exchange.

“The placement resulted in a number of key North American institutional funds joining our register, which is encouraging as we complete due diligence and evaluation of a TSX Venture Exchange listing,” Gauci said.

“It also allows us to concentrate on drilling and feasibility studies on our 100 per cent-owned Napier Range and Admiral Bay projects, while considering a spin out of our cobalt and lithium projects.”


Metalicity Limited (ASX: MCT)
…The Short Story

6 Outram Street
West Perth WA 6005

Ph: + 61 8 9324 1053


Andrew Daley, Matthew Gauci, Chris Bain, Mathew Longworth