THE DRILL SERGEANT: Highlands Pacific has reported the final assays it has received from a 14 hole diamond drilling program at its Olgal prospect in the Star Mountains, located 20 kilometres northeast of the Ok Tedi mine in Papua New Guinea.

 

Star Mountains prospects and Olgal drilling. Source: Company announcement

The company was made to wait until assaying of the bottom of the final hole of the 14 hole program to receive the best results, which included:

596 metre at 0.61 per cent copper and 0.85 grams per tonne gold from 24m down hole (at a 0.2 per cent copper cut‐off), including 294 metres at 0.67 per cent copper and 1.16 grams per tonne gold from 320 metres down hole (at a 0.5 per cent copper cut‐off).

“This hole is quite a surprise and the grade exceptional and more than justifies the effort and resources that we have expended at Star Mountains in the last two years,” Highlands Pacific managing director John Gooding said in the company’s announcement to the Australian Securities Exchange.

“There is no doubt that this is a new copper gold porphyry province close to the established infrastructure of the Ok Tedi Mine.

“Importantly, with each hole we are increasing our conceptual understanding of the area and the interplay between the more than a dozen targets we have in mind to test.

“Drilling at Olgal has stopped for now with the rigs now located at the Futik and Pad48 prospects.

“Based on the Olgal results, we look forward to results from these and the next drill target at Rattatat in the coming months.”

Of the 14 holes drilled in the recent program at Olgal, 12 have encountered copper and gold mineralisation.

Monto Minerals has released the first batch of results it has received from a program of reverse circulation (RC) drilling conducted at the Confederation prospect, located 800 metres northeast of the Baal Gammon copper mine near the Herberton Tin Field of Northern Queensland.

The company said the initial batch of results has revealed a number of significant intersections, including:
 
–    6 metres at 4.33 per cent copper, 1.25 per cent tin, 106 grams per tonne silver and 301g/t indium from 87 metres;

–    9m at 1.56 per cent copper, 0.15 per cent tin, 43g/t silver and 102g/t indium from 123m; and

–    5m at 1.63 per cent copper, 0.2 per cent tin, 110g/t silver and 209g/t indium from 53m.

Monto said the results from the Confederation drilling program demonstrate the high grade nature of shallow copper mineralisation in the area and, given the proximity to the Baal Gammon mine, confirms the prospect as a potential additional source of high grade ore.

 

Source: Company announcement

“The initial batch of results received from the Confederation drilling program have confirmed the high grade nature of copper mineralisation in close proximity to the Baal Gammon pit and have also, rather unexpectedly, demonstrated significant tin grades associated with the copper,” Monto Minerals managing director James Allchurch said in the company’s announcement to the Australian Securities Exchange.

“The Confederation prospect provides great optionality for increased tonnes at the Baal Gammon operation and also represents a great deal of exploration upside given that both Baal Gammon and Confederation are located at the southwestern end of a strong northeast-trending aeromagnetic anomaly.”

Monto has completed the drilling program at Confederation and indicated that it will release results as they are received from the laboratory.

The company is currently finalising a forthcoming drilling program for Confederation, which will exclusively target high-grade tin mineralisation in the northern Herberton Tin Field.

This round of drilling is expected to commence late June 2012.

Mention Nevada and most people think of Las Vegas, but a package of three highly-prospective tenements acquired by this junior gold explorer has stacked all the odds in its favour.

Cassini Resources (ASX:CZI) successfully listed on the Australian Securities Exchange in January 2011 during a period that saw many other IPOs fail to achieve the same feat.

Cassini garnered support for its listing on the back of a tenement package of four early-stage projects in Western Australia located in the West Musgrave, out near Warburton; Forrestania; Peak Charles; and the Eucla Basin.

“We listed on the back of some tenements we believed, and still do believe, to be really good assets,” Cassini Resources managing director Richard Bevan told The Inside Story.

“They are all early-stage projects, but we believe they have a great deal of potential.”

The potential of Cassini’s WA projects is exemplified by the Musgrave project, which is situated in what had been a poorly explored province until the discovery of BHP Billiton’s Nebo and Babel nickel-copper-Platinum Group Element (PGE) sulphide deposits initiated a surge of aggressive exploration activity.

A number of gravity and magnetic anomalies have been identified on the Cassini leases which appear to have similar characteristics to the nearby Nebo – Babel deposits, none of which have been subjected to any serious drilling.
 
Cassini is expecting to finalise an access agreement with traditional owners at Musgrave by the end of May, which should result in the granting of exploration licences at the project.

“Once that is done we have a ground geochemistry program we anticipate commencing around July / August,” Bevan said.

“We are looking to add value and progress all of our WA projects, but our priority is progressing our North American projects.”

Casssini’s North America projects are set to become the envy of the ASX junior gold exploration sector.

Cassini Resources Nevada projects map.

“We have acquired three highly-prospective projects in Nevada that are situated amongst a number of multi-million ounce gold deposits and operating mines,” Bevan said.

“These projects are a lot more advanced than our Australian projects and provide us with three great opportunities to find something of significance that could possibly become a company maker”

The company is poised to acquire 100 per cent of private Australian company Search Resources, whose United States subsidiary company has signed a Joint Venture agreement with Nevada‐based gold/silver-focused exploration company Renaissance Gold.

Cassini will acquire the rights of the existing JV agreements to earn a 70 per cent equity interest in three prospective gold exploration projects in Nevada.

The most advanced of these projects is Pasco Canyon, which is endowed with existing defined drill targets.

The company has re-interpreted the geology at Pasco Canyon and will drill two to four deeper holes against the direction of previous drilling to intercept the mineralised zone.
 
“The three projects are all at slightly different stages of advancement,” Bevan explained.

“The Pasco Canyon project is ready to drill and we have already had the drilling permits granted.

“We are just finalising the commencement date for that drilling program and hopefully will be drilling by July/ August.”

The company’s second project in Nevada is Goldstar where rock chip sampling returned impressive results including 19.8 grams per tonne gold and 1,213 grams per tonne silver from quartz veining at surface, but is yet to be drilled.

“There is more sampling and mapping work to be done at Goldstar but we anticipate drilling on that project by the end of the year,” Bevan said.

The final project is the Leonid project, which is at an earlier stage of advancement than Pasco Canyon or Goldstar, however the company feels it could hold the most potential.

Over seven kilometres of anomalous gold mineralisation is already identified at Leonid.

Cassini intends following up exploration work by Renaissance Gold that has defined drill targets.

Leonid is situated within the Carlin Trend, which is considered to be one of the world’s richest gold mining districts.

The Carlin Trend is host to seven 20Moz-plus gold deposits, including the largest gold assets of major mining companies Newmont and Barrick Gold.

By 2010 mines operating in the Carlin Trend had produced over 100Moz of gold.

“The Carlin Trend hosts a number of significant deposits, which are located in close proximity, some just 20 kilometres away, from Leonid,” Bevan said.

“The early signs emerging from Leonid are that all the markers and pathfinders for a deposit are there.

“We expect to be in a position where we can commence drilling Leonid by the end of the year but we still have some preliminary work in terms of soil geochemistry testing as well as some surveying and mapping activity.

“In the next six months, before winter sets in over there, we should be able to progress all of these projects.”

Cassini is confident the bulk of the work required to progress its American-based project portfolio is not in the high-cost bracket.

The drilling to be conducted at Pasco is probably its most expensive task but the other groundwork is reasonably low-cost, which means the company will be able to keep proving up the project models without a huge financial outlay.

To understand how prospective these projects are, Bevan said it was important the market began to understand how prolific the state of Nevada is in terms of gold production.

In 2011 Nevada produced some 6.1 million ounces of gold, making it responsible for approximately 83 per cent of US gold production that year.

The US sits third in on the list of gold producing countries. If you were to take the US out of the list and replace it with Nevada it would come in at number six.

Despite having been explored and mined for over 150 years the region continues to yield new discoveries.

 

Cassini’s Nevada projects are situated near a number of multi-million ounce gold deposits

“Nevada is a mining state providing a well-trodden path for explorers with excellent infrastructure and expertise and equipment, all readily available,” Bevan said.

“There is a lot of exploration activity happening that significantly de-risks our projects and we also have a 30 per cent Joint Venture partner that resides in Nevada.

“We are also fortunate having our newly appointed executive director – exploration David Johnson, based in Salt Lake City, Utah.

“That combination provides us with a strong technical background with strong local links enabling them to access services and expertise.”

Johnson is an Australian-trained geoscientist who has worked for such companies such as Western Mining, Rio Tinto, LionOre and Independence Group.

His appointment reflects the make-up of the Cassini Board with the company’s chairman, Mike Young being a Toronto-trained geologist now based in Perth.

Young is also managing director of BC Iron, which successfully made the transition from iron ore exploration company to become the most recent iron ore producer in WA’s Pilbara region.

As exciting as the company’s Nevada projects are Bevan indicated Cassini Resources has no intention of turning its back on the WA projects it listed on.

“Our intention is to operate the two in tandem,” Bevan said.

“We have the capital to run both but we need to be mindful how we spend our money.

“The good thing with the Nevada assets, especially with some of the early drilling programs, is we should know sooner rather than later if we do have something there.

“We can then sit back and assess where we would be best placed to allocate our capital in terms of adding value.”

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

HEAD OFFICE
945 Wellington Street
West Perth WA 6005

Phone:    +61 8 9322 7600
Fax:        + 61 8 9322 7602

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

DIRECTORS and MANAGEMENT
Mike Young, Richard Bevan, Phil Warren, Greg Miles

MAJOR SHAREHOLDERS
Richard Bevan         7.44%
Freelight Nominees    6.80%
Mike Young            6.47%

SHARES ON ISSUE
18.75 million

MARKET CAPITALISATION

$2.81 million (at 15/05/12)

 

ONE OFF THE WOOD: On the road at the RIU Syndney Resources Roundup, Integra Mining managing director Chris Cairns put aside a few minutes from his busy schedule to bring The Roadhouse up to speed on the company’s Randalls gold project.

Integra has recorded a couple of important milestones recently with the first being the production of the first ore from the Maxwells open pit. What can you tell us about that?

Maxwells is the second open pit at our Randalls gold project. It has undergone pre-stripping over the last couple of quarters and is now in full production.

Maxwells will be our main source of ore over the next two and a half years. Notwithstanding that we expect to have the Majestic open pit available and permitted and ready to mine in March.

So with the stockpile, combined with those two open pits we certainly don’t have any lack of material.

Now it’s a case of making sure we maximise our cash flow and maintain consistency of production.

You were able to bring on production at Maxwells a bit ahead of schedule, which is a big achievement in the language of any mining company. How were able to achieve that?

Maxwells was intended to be in production by June but full production was achieved in April. Really it was just that material movements were a little bit better than what we anticipated.

I think that is one of the strengths of the operation. We have had sufficiently strong cash flows that have enabled us to do a major pre-strip at Maxwells and at the same time build up a 1.8 million tonne stockpile.  The invested mining cost of the stockpile alone is $60 million which could be considered foregone profit.  If we stopped mining and just processed the stockpile, it would net us $100 million cash.

 

Is that a fair indication of the overall health of Integra’s operations at Randalls?

It is. Certainly in the context that we have strong margins and we are not existing hand to mouth in terms of just-in-time type management of delivering ore to the mill.

We have the capacity to mine the deposits quickly and more efficiently. The unit costs are commensurately lower because we are moving a lot of material within a short space of time.

But it does mean that we had to have a lot of money tied up in work early as it was always our objective to de-risk the operation.

We have 1.7 years of milling capacity sitting in front of the mill in a stockpile.

If, heaven forbid, we did experience a pit slippage or we encounter any issues that you do experience from time to time in mining, we have that very strategic buffer up our sleeve.

Let’s shift our gaze over to Cock-eyed Bob, where you recently encountered more mineralisation underground; you were aiming for it, you knew it was there, you went after it, and there it was?

The Banded Iron Formations that host the three high-grade deposits including Cock-eyed Bob have nice high grades, but are not so nicely behaved in that the grade is highly variable over short ranges so it meant we couldn’t drill them out as an underground reserve from surface.

So you had to wait until you reached them in order to do that?

It was a far more efficient and reliable proof of concept that the underground operation is viable to go in there, mine out a 50,000 tonne bulk sample put through it the mill and reconcile the amount of gold that we have got. We are confident this will result in a clear demonstration of the profitability of underground mining these deposits.

That’s not an unusual mode of operation for a gold mine?

No, particularly when you have a high proportion of coarse visible gold.

We anticipate those deposits will be producing 60 per cent plus gravity gold, just to give you an indication of how much coarse gold is in them.

There is going to be quite a lot of variation in grade and contained ounces from day to day or week to week, but over the longer term those variations should smooth out.

The underground deposits will only be providing about 10 to 20 per cent of our overall volume with the rest of the mill feed being open pit material that is more reliable in terms of grade so the overall variance is significantly muted.

The Randalls project has come a long way during the extended conversation we have had since you began working it up. That must provide a great sense of achievement?

There’s a great story behind the story as well. In 2005 we determined we needed to acquire projects to enhance the Aldiss project closer to Kalgoorlie.

We identified the Randalls assets, bought them and as we were executing the deal, at the last minute, the vendor said, ‘we have this other tenement off to the west, we’ll throw that in for free’.

We identified six possible targets and went to the market to raise $5 million. On the sixth of those six targets, drilling the fifth of five holes we hit Salt Creek, which subsequently evolved into a 400,000 ounce disseminated, dolerite-hosted gold deposit.

Without that we wouldn’t have been able to develop the project the way we have because that large volume of very reliable grade mixes so well with our much more variable high-grade deposits.

Fast forward to 2012 and drilling is still uncovering new discoveries for Integra – a case in point being the recent Imperial discovery?

It was while we were in construction at Salt Creek that we discovered the Majestic deposit, which looks like just over 100,000 ounces at just over two grams per tonne from a nice open pit.

In November last year in the vicinity of Majestic we were following up some additional targets where we started hitting some really special mineralisation and were being surprised by such intercepts as five metres at 44 grams per tonne gold and 4.5 per cent copper.

Overall my feeling is, as we know it today and we’re still drilling, it is looking anywhere around six to seven grams average grade, maybe 1.5 per cent copper.

We need to do some met-test work to ascertain whether the copper is going to affect the gold recoveries, but indications from Majestic, which does have some copper in it, are that it doesn’t have a material impact.

It seems the more you unwrap Randalls the more it keeps on being the gift that keeps giving?

People kept telling us we wouldn’t find much gold to the east of Kalgoorlie or any decent sized deposits out that way. We discovered Salt Creek.

As understanding of the area evolves we consider it to be highly prospective for some very sound and fundamental geo-scientific reasons.

You’re no longer in the position where you’re drilling the last hole on your last target using your last exploration dollar?

Now the operation has one year under its belt and is stabilising at around 1.2 million tonnes per annum, we have plenty of feed sitting in front of the mill and we’re almost debt free.

All the hard work is done; we have a strong cash flow that supports our aggressive exploration program from here on.  Anything we add from here on in is pure profit with all the infrastructure in place and paid for.

ONE OFF THE WOOD: A portfolio encompassing prospective tenements in Western Australia and Burkina Faso gives Riedel Resources executive director Bruce Franzen plenty to talk about and he perched on a stool in the front bar this week to do just that.

Riedel has a portfolio consisting of projects in Western Australia and Burkina Faso. Which of these is winning to be the company’s major focus at the moment?

We listed about 15 months ago on the back of the suite of projects we acquired in Western Australia.

The main project and focus of all of our recent exploration activities is a gold and base metal project called Marymia.

It comprises of two tenements of approximately 430 square kilometres situated in the Doolgunna-Thaduna trend about 150 kilometres northeast of Meekatharra.

These tenements are part of a cluster of exploration activity within a 10 kilometre radius which includes explorers Ventnor Resources, Sipa Resources, and Lodestar Minerals.

 

We’ve been on the ground at Marymia since October last year and have recently completed soil sampling and detailed mapping over the entire 431 square kilometres.

We are presently finalising heritage surveys with the view to commencing a 5,000 metre air core drilling campaign to test high priority targets as soon as we can.

There certainly seems to be a lot of drill rig traffic heading up that way these days?

Everybody in the area is either drilling or planning to drill and subsequently news flow from all players is ongoing.

The area is evolving rapidly by virtue of the substantial exploration spend that is occurring.

This means that the area is financeable and consequently funding is being made available.

What did the soil sampling tell you?

We have recently published the geochemical results in regard to gold and this has produced a number of high priority drill targets – some of which are based on strong arsenic anomalies that are coincident with geophysical anomalies and mapping data.

We will be following up those high order gold targets in our upcoming drill program.

When will that drilling commence?

Final heritage clearance is commencing Monday, next week, so we expect to be able to commence drilling within a few weeks.

We concede, as is typical of this process, that we have been subjected to delays in the heritage clearance process which is nothing short of frustrating. Anyway, that’s what we are aiming for.

What’s happening with the copper geochemical results from Marymia?

The copper and base metals data is still being standardised and interpreted; however we expect results to be ready for release to the market within the next few weeks.

Is this the first time these tenements have seen any exploration?

There has been historical work at Marymia over the last 30 years, including RC and RAB drilling and some limited diamond drilling.

When we acquired the project, we had 20 years’ plus worth of data to reinterpret and that had been focused primarily on gold with a small amount of work looking at nickel.

We have been able to revisit all of the historical work and apply new technology and ideas, particularly in the area of geophysics which has changed immensely. This has given us a vastly different outlook for Marymia compared to past explorers.

Earlier exploration technologies didn’t have the same resolution that we have today, for example some of the structural controls that we now understand to be important at Marymia were simply not understood previously.

The gold price is also far superior these days which is stimulating significant focus for us on gold as well as copper.

What have you been able to identify that hadn’t been before?

We have come up with a stand out gold target that is represented by a seven kilometre arsenic halo coincident with a significant structure, which hasn’t been drilled or previously prospected at all.

It is sitting under cover which explains why in the past it was overlooked. We have demonstrated a distinct correlation between arsenic and gold mineralisation elsewhere in the tenement area where primary veins are exposed at or near surface.

This is a massive target, potentially, which is untested and we plan to test that in our next round of drilling. The team is currently in the field completing infill geochemical sampling over this anomaly to better define the key target area.

You recently added to your project portfolio by picking up some ground in Burkina Faso. What’s the story there?

We recently completed a transaction to acquire the rights over five gold permits in Burkina Faso from Golden Rim Resources.

Within 24 hours of completing that transaction we had guys on the plane and within seven days we had commenced an auger drilling program on the Gonsin permit.

 

You didn’t waste any time there, did you?

Burkina Faso has a pro-mining culture and as a developing country competing for foreign investment, has substantially less bureaucracy and impediments to gaining approvals for field exploration activities.

That meant we were able to move very rapidly without being hampered by onerous bureaucracy, it was absolutely refreshing.

As far as costs go, Burkina provides excellent value for your exploration dollar and they are very accommodating to encourage foreign companies to establish business there.

There are a lot of explorers in the country now, including a number of Australian companies as well as others from Canada and UK.

There does seem to be a particular buzz emanating from that part of the world at present but there are also Burkina-sceptics emerging saying perhaps its gold race has been run?

It’s not a case of there not being any gold there. The question is how much gold is there? That is the reality.

With only about five years of exploration completed to date in Burkina, we believe that it offers explorers staggering potential and could even look like Western Australia 100 years ago.

It is evolving rapidly and there are opportunities being created for everyone. We don’t see this changing in a hurry.

You were on the ground nice and quickly after its acquisition. What has that work led you to so far?

Right now we have a 5,000 metre auger drilling program underway that we expect to be completed within the next week or so. We expect results will start to flow in about six weeks.

Concurrently we have started soil sampling and trenching programs across two of the other permits in Tagou and Galgouli South.

So we are very active on the ground now in Burkina and, subject to the weather not closing in on us, which is the real risk, possibly by mid-July, we hope to have completed 2,000 metres of RC drilling planned on our Tagou permit as well.

Tagou is becoming increasingly prospective for us, in the sense that we are just 30 kilometres north of Mt Isa Metals’ new Nabanga discovery.

Their results this year have really changed the game in Burkina and shown that there are high-grade deposits in the country as well as the more typical large tonnage–lower grade deposits. This has come about by simply applying modern exploration methods to the right geology.

The artisanal miners have also proved that they can adeptly read ASX announcements and we have found a swelling population at Tagou keen to benefit from proximal structures to Nabanga to the south.

It is our intention to work collaboratively with the local artisanal miners to complete our planned geochemical programs.  We definitely see this as a positive development.

It would appear that Riedel has been able to situate itself right in the midst of two the worlds emerging exploration hotspots?

The Doolgunna – Thaduna area at the moment is arguably the most prospective metallogenic province in Australia.

There is a serious amount of activity occurring in the area other than the Sandfire development project. It would not surprise me if there were to be more than $50 million per year being spent on exploration in that area alone.

West Africa in general has Burkina Faso as well as Sierra Leone, Mali, Senegal, Niger, Ivory Coast, and Liberia all evolving rapidly and it is an extremely prospective area that has been acknowledged by the global industry as such.

What would say Riedel offers any potential investors at the moment?

The immediate opportunity for investors, and for the market generally, is to watch Riedel right now.

We will have results from our auger drilling at Gonsin that will be out in the near term followed by RC drilling at Tagou, plus commencement of the aircore program at Marymia focusing on the high priority gold targets which includes the 7km arsenic anomaly previously discussed.

They could be the stand out highlights for Riedel over the coming months and have the potential to significantly re-rate the company.