THE DRILL SERGEANT: Having raised $3.2 million from a recent entitlement offer Victoria gold exploration company Navarre Minerals is set to kick off the next stage of a drilling and geophysical testing program at its Bendigo North gold project.

Navarre has an air-core rig ready to commence drilling on the Tandarra prospect, located 40 kilometres north of Bendigo, on a preliminary 20 hole program.

This program is scheduled to be followed by a larger $4.2 million 50,000 metre drill program scheduled for October through to May 2012.

This larger program will also involve 110 line kilometres of geophysical survey as follow-up to significant gold intercepts the company drilled during May.

“The key feature of our exploration strategy is an ability to target quartz reefs buried beneath the Murray Basin sediments,” Navarre Minerals managing director Geoff McDermott said in the company’s announcement to the Australian Securities Exchange.

“These reefs are known to start from only 30 metres below the surface at Tandarra.”

From the May drilling program the company announced a 10 metre intercept of gold assaying 34.4 grams per tonne, starting at shallow depth of 37 metres below surface.

A subsequent geophysical survey of the target zone conducted in July delineated further drill sites, which will form the basis of the 20 hole preliminary stage program.

“We have completed a great deal of preparatory work on this program,” McDermott continued.

“Our early drilling is highly promising and our theories on an analogy with the Bendigo Goldfield to the south are now to be fully tested.”

The company said its main targets for the extended program are the quartz reefs, which it considers to potentially contain gold.

“The reefs are like tunnels of quartz that extend for several hundreds of metres, running largely north-south, parallel to the controlling fault structure of the region, the Whitelaw Fault”  McDermott said.

“Our proposition is that the same fault is integral to the control of the gold accumulations in the Bendigo Goldfield to the south, a field which has produced around 22 million ounces of gold since its discovery in the 1850s.

“These prospects have lain hidden by sands and clays of the Murray Basin cover for millions of years.

“It is highly likely that if they had outcropped, as they did at Bendigo, the old timers would have discovered them.”

THE DRILL SERGEANT: Burkina Faso-focused gold explorer West African Resources announced further wide gold zones from surface in RAB drilling at its Meguet prospect.

Meguet is located in the southwest corner of the company’s 100%-owned Boulsa gold project, which is situated just 25 kilometres northeast of Orezone Gold Corp’s 3.5 million ounce Bombore gold deposit.

West Africa completed a program of RAB drilling Meguet in July, with six sections, A through to F, drilled on northwest-southeast and north-south sections.

Each section was designed to test multiple vein orientations in artisanal mine sites, and conflicting information regarding vein orientations that had been logged from previous RC drilling.

In total, 213 RAB drill holes were completed for a total of 4101 metres all of which intercepted a coherent northeast-trending, northwest-dipping zone.

Best results from the drilling include:

10 metres at 7.67 grams per tonne gold from surface, ended in mineralisation;

10m at 2.77 g/t gold from surface, ended in mineralisation;

24m at 1.00 g/t gold from surface, ended in mineralisation;

24m at 0.84 g/t gold from 4m, ended in mineralisation;

12m at 1.59 g/t gold from surface; and

4m at 4.40 g/t gold from 8m.

“Shallow RAB drilling at Meguet has returned wide gold zones on all sections from surface,” West African Resources managing director Richard Hyde said in the company’s announcement to the Australian Securities Exchange.

“Now that we have confirmed the orientation of mineralisation, we will target these zones with deeper diamond drilling with our Company-owned drill rigs following the current wet season.”

According to the company announcement recent mapping of quartz veins from new exposures within areas of artisanal mining indicates the majority of vein-sets dip steeply to the north and northwest.

Other vein and fault sets occur in north-northwest to north-northeast orientations.

West African geologists have interpreted this to demonstrate this zone, along with bounding east-west and northeast shearzones, as a quartz vein stockwork zone.

Previous RC drilling carried out in this area returned broad 30 metre to 50 metre gold intercepts from surface grading 0.6 g/t to 0.9 g/t gold.

The company considers the recently interpreted stockwork zone to be a hanging wall zone to the higher-grade, northeast trending bounding mineralised zone, which previously returned 10m at 7.67 g/t gold and 10m at 2.77 g/t gold.

THE DRILL SERGEANT: Australian rare earths company Arafura Resources has confirmed the presence of further rare earths mineralisation at depth at its 100 per cent owned Nolans Bore deposit in the Northern Territory.

The results come as Arafura is approaching the end of a resource development drill program designed to test the Nolans Bore rare earths resource to a maximum total drilled depth of about 250 metres.

Assays from four drill holes that were carried out west and north-west of Nolans Bore are the first results Arafura has received from beyond the deposit’s Central North Zone from the systematic deep drilling campaign.

The best mineralised intercepts include:

– 31.7 metres at 2.3% rare earth oxides, 10.4% phosphorous pentoxide and 0.39 pound per tonne uranium from 161.9 metres;

– 29.8m at 3.5% REO, 15.4% phosphorous pentoxide and 0.57 lb/t uranium from 126.1m;

– 16.0m at 4.4% REO, 21.4% phosphorous pentoxide and 0.73 lb/t uranium from 233.4m;

– 37.5m at 3.7% REO, 17.0% phosphorous pentoxide and 0.65 lb/t uranium from 154.0m; and

– 17.3m at 4.5% REO, 22.1% phosphorous pentoxide and 0.81 lb/t uranium from 218.1m.

In its announcement to the Australian Securities Exchange, Arafura said the deeper mineralisation is likely to contribute to new JORC resources in a revised estimate for Nolans Bore, the company anticipates by the end of the year.

According to Arafura geological and radiometric logging of diamond core from the current campaign across other areas of the deposit have demonstrated widespread rare earths mineralisation at depth.

“Assays from deeper mineralised drill intercepts reported today are highly encouraging and, consistent with our view that the rare earths market will remain in undersupply this decade, very important in the context of assessing the extent of value creating expansion opportunities an increased resource at Nolans Bore may provide,” Arafura Resources managing director and CEO Dr Steve Ward said in the company’s announcement.

“By the end of the current campaign, we will have completed almost 100 kilometres of drilling of all types at Nolans Bore, representing a very substantial investment by the company that reflects the quality of the asset.
 
“Arafura has a number of work streams in progress as part of the Nolans Project Bankable Feasibility Study.

“Completing the expansion drilling program on schedule demonstrates our determination to complete the BFS as soon as possible, as we work towards securing project finance by the end of 2012.”

THE BOURSE WHISPERER: Mongolia-focused coal play Aspire Mining has received the thumbs up for the coal at its wholly-owned Ovoot coking coal project, located in northern Mongolia Ovoot project.

In a recently prepared marketing report international coal market consultants Wood Mackenzie confirmed coking coal from Aspire’s Ovoot project had highly attractive properties that would meet global seaborne market requirements.

In its report Wood Mackenzie said Ovoot coal could be described as ‘A strongly caking, hard coking coal with superior blend carrying capacity,’ and that hard coking coal would be an appropriate price benchmark.

The Ovoot project has a 330.7 million tonne JORC Compliant Resource with high washing yields of 80% and an 8% ash content, based on recent wash analysis.

Aspire said Wood Mackenzie stated that, based on available quality data, Ovoot coking coal was in an ideal range for mid volatile hard coking coal and fat coal classifications.

The consultancy also confirmed Ovoot coking coal presented as a value add blend coal – able to be blended with cheaper inert coals due its very high vitrinite content and good fluidity.

“The Wood Mackenzie Report confirms our view that Ovoot is a quality coking coal by any measure,” Aspire Mining managing director David Paull said in the company’s announcement to the Australian Securities Exchange.

“Confirmation that hard coking coal prices are an appropriate benchmark for Ovoot coking coal provides us with confidence to progress a prefeasibility study into the larger scale development of the project.

“Potential markets for our coal include all of the large high growth markets of China, India and Brazil as well as the established markets of Japan, South Korea, Taiwan, Russia and Europe.”

Aspire is considering development of the Ovoot project in two stages.
Stage 1 is a small scale development based on a 0.5 to 1 million tonne per annum starter open pit, providing direct ship ore.
This ore will be trucked 550 kilometres to the nearest rail siding at Erdenet, while work continues on developing a rail connection from the Mine to Erdenet.

From Stage 1 Aspire is predicting high yields of 80% and a 15 million tonne per annum indicative open pit run of mine.

With this in mind it is confident of achieving Stage 2 production of as much as 12 million tonnes per annum of coking coal with a rail connection to Erdenet and the Trans Mongolian Railway.

In its report Wood Mackenzie forecast a strong market for good quality coking coals over the medium to long term driven by large demand increases from rapidly expanding markets such as India and Brazil.

It says coking coal prices have rallied beyond historic levels and high premiums above thermal coal are forecast to continue.

Australian M&A activity reaches record high

Merger and acquisition activity has been fairly hot recently according to a recent report.

In its Australasia Investment Banking Snapshot released last week Thomson Reuters said Australian-involvement in mergers and acquisitions had reached a record high of US$130.3 billion so far this year.

The business information group said this represents an increase of 78.1% from the same period last year and the busiest year-to-date volume.

Not prizes for guessing the country’s metals and mining sector came in as the busiest with US$27.8 billion, up 31.5% from the same period last year.

However, the food and beverage sector gave the rock kickers a run for their money with one of the biggest upsurges.

Food and beverage transactions have reached a total of US$18.1 billion from 33 deals so far this year compared to US$118.2 million from 25 deals in 2010.

One takeover that has been gaining plenty of exposure is the takeover bid by Focus Minerals for fellow gold junior Crescent Gold.

Focus announced it had now made the bid free of conditions, which could be due to the circling of a Hong Kong-based company Stone Mining, which has built a hefty stake in Crescent of its own.

Focus said it now holds a current stake of 66.3% of Crescent, whose shareholders, with the exception of Focus, voted in favour of the acquisition and conversion of up to $A13 million worth convertible notes in Crescent by Focus.

The conversion would take Focus’ stake in Crescent to 74.2%.

However, throwing a spanner amongst the proverbial it has come to light Stone has increased its stake in Crescent.

Stone first appeared on Crescent’s shareholder register on August 1 after building up a 5.9% stake with $4.46 million worth of on-market purchases.

Since then it has accumulated a holding of 11.6%, effectively blocking the Focus bid for over 90% of Crescent, which would enable it to move to compulsory acquisition.

The board of Crescent has recommended shareholders accept the Focus offer after receiving a warning from its suitor a superior offer was unlikely to be put on the table, given it has already compiled a controlling stake.

Stone is obviously on the lookout for some Australian gold with its Toronto-listed parent company Stone Resources picking up a 30.9% stake in ASX-listed gold junior A1 Minerals.

Over at Australian resources company Meridian Minerals a binding Heads of Agreement was signed with the company’s largest shareholder Chinese company Northwest Nonferrous International Investment Company.

Northwest’s interest in Meridian, currently 41.34 per cent, is held via its subsidiary Northwest Nonferrous Mining Australia, under which Northwest has agreed to acquire all of the outstanding ordinary shares of Meridian not currently owned by Northwest by way of a scheme of arrangement.

Northwest has agreed to pay Meridian shareholders a cash consideration of 14 cents per Meridian share, valuing Meridian’s equity at approximately A$68 million.

In its announcement to the Australian Securities Exchange Meridian said the offer price represents an attractive premium for Meridian shareholders on a range of measures, which included:

– A 22% premium to Meridian’s closing share price on 18 August 2011, the last trading day prior to the announcement;

– A 27.3% premium to Meridian’s closing share price on 19 July 2011, the last trading day prior to Northwest’s takeover expression of interest on 20 July 2011; and

– A 30% premium to Meridian’s volume weighted average price (“VWAP”) since 19 July 2011.

“We look forward to agreeing the transaction documentation with Northwest in the coming weeks and moving towards completion of a successful outcome in the best interests of all Meridian shareholders,” Meridian Minerals managing director Jeremy Read said in the announcement.

“A little over two years ago, Meridian’s share price was trading at A$0.02 with a market capitalisation of A$1.5 million.

“Therefore, the board believes that the agreement we have reached with Northwest will allow all Meridian shareholders to capture the significant share price appreciation we have seen over the past two years.”

Meridian Minerals chairman supported Read’s optimism saying, “Northwest has been a supportive shareholder of Meridian over the past two years and the offer Northwest has made to acquire all of the outstanding ordinary shares of Meridian not currently owned by Northwest is a vote of confidence in the Lennard Shelf Project and the advancement of the Lennard Shelf which Meridian has made since it commenced work on the Lennard Shelf in November 2009.”

Meridian said both parties will now work towards finalising the structure of the transaction and an implementation agreement by 31 August 2011.

After this time the company said it expects the transaction to be implemented over the next two to three months.