THE CONFERENCE CALLER: Those who speculate whether there has been an upturn in resource sector sentiment were given plenty to think about after the RIU Resources Roadhouse in Sydney this week.

Regular supporters and attendees of this event will most likely spend the next month having physio treatment for RSI injuries suffered from two solid days of giving the conference two-thumbs-up.

The build in sentiment has been on a slow burn for at least 12 months, since last year’s Roundup, which fully ignited at Diggers & Dealers in Kalgoorlie and continued to burn brightly at the Explorers Conference in Fremantle in February.

Conference organisers Vertical Events welcomed more than 750 delegates through the turnstiles over the two days, equalling the attendance figures of the boom times of 2012.

“That makes sense, because our Explorers Conference this year did the same, in terms of numbers,” Vertical Events managing director Stewart McDonald told The Resources Roadhouse.

“Obviously, the resources sector has picked up after a few down years and is now back to 2012 levels – with renewed interest.”

“A lot more brokers more corporate interest a lot of funds, a lot of capital companies, and a lot of brokers.”

Although the rise in numbers this year can be put down to the number of suits and corporate types present, there was also a notable representation from the retail side of the investment community.

“There has been a lot of brokers here, which is important,” Blackham Resources managing director Bryan Dixon told The Roadhouse.

“We have had the chance to speak with some of our retail investors, who had driven 150 kilometres to be here and speak with us, which I think is great.”

Blackham representative Jim Malone backed up Dixon’s comments.

“After Bryan gave his presentation, we had people lined up at the booth wanting to find out more about the Matilda project and the company,” Malone said.

On day one of the conference delegates were lining up outside the presentation hall, waiting for a chance to get in when other punters left.

Although the crowd dropped off slightly on day two, the auditorium was still packed to the gills with people prepared to stand and listen to the company presentations.

The consistency of the size of the crowd was unexpected by the Sofitel kitchen, which struggled to keep up with demand at lunch time.

Even after being fed and watered the crowd stayed on to hear the afternoon’s presentations, a symptom suggesting a diagnosis that everybody was there for the right reasons.

“The indications of improvement are definitely there,” McDonald said.

“Hopefully it’s a sign of more good things to come.”

THE INSIDE STORY: St George Mining (ASX: SGQ) is bracing itself for further encouraging drilling results from the company’s Mount Alexander project in Western Australia.

St George Mining has achieved a steady stream of positive drilling results at Mt Alexander since acquiring the project from BHP Billiton Nickel West in 2016.

The company recently announced the discovery of further massive nickel-copper sulphides at the Investigators prospect from a major drill program it currently has underway at the project.

Three from five drill holes completed at Investigators successfully tested three separate EM conductors.

“The discovery of further high-grade nickel-copper sulphide mineralisation at Investigators confirms the potential to significantly expand the known mineralisation at this prospect, where mineralisation has already been shown to be present recurrently over a strike length of 1.3 kilometres,” St George Mining executive chairman John Prineas said.

“We are very excited by this early success and the potential for more discoveries as the drilling continues.”

The drill holes – MAD43, MAD44 and MAD45 –all intersected massive nickel-copper sulphides while the other two drill holes – MAD41 and MAD42 – encountered prospective ultramafic but not targeted EM conductors.

MAD43 tested an off-hole DHEM plate at Investigators to a downhole depth of 180 metres, intersecting a 10.2m thick ultramafic unit from 147.8m with nickel-copper sulphides.

Drilling encountered a 9.42m thick interval, from 147.8m, of ultramafic with weak-moderate blebby and disseminated sulphides and a 0.73m thick interval, from 157.22m, of massive sulphides with spot XRF readings averaging 5.1 per cent nickel and 2.15 per cent copper.

MAD44 tested another DHEM plate, located approximately 65m to the west of the DHEM plate tested by MAD43.

MAD44 was also drilled to a downhole depth of 180m, intersecting 8.14m of ultramafic from 147.35m with rare disseminated sulphides and remobilised massive to semi-massive sulphides in granite just below the ultramafic contact from 155.69m to 156.11m.

XRF readings of the massive sulphide demonstrated variation in the nickel content from 5 to 6 per cent nickel in the core to 27 per cent nickel in the coarse grained pentlandite-rich rims.

MAD45 tested SAMSON Anomaly 6, intersecting ultramafic from 165.2m downhole with the profile of the sulphide mineralisation intersecting weak disseminated and blebby sulphides, moderate blebby and disseminated sulphides.

It also hit 0.88m of strong disseminated and matrix sulphides from 178m to 178.88m and 0.2m of massive sulphide from 178.88m to 179.08m.

St George is conducting additional DHEM surveys to better define the location of the EM conductors, which were originally modelled from surface EM data.

The drill program at Mt Alexander is ongoing with multiple targets at the Stricklands and Cathedrals Prospects yet to be drilled, with additional drill holes to be planned by Sat George after the DHEM surveys.

The company is confident the drilling is on track to discover more high-grade nickel-copper sulphides and to expand the mineralisation in the Cathedrals Belt.

St George has been pleased with the portable XRF analysis results showing high-grades of nickel and copper in the mineralisation the drilling has intersected.

The company is eagerly awaiting laboratory assays to confirm these values, which it also expects to indicate high values of cobalt and PGEs consistent with previous high-grade mineralisation intersected in the Cathedrals Belt to date.

St George also has a gold string to its project bow and has been drilling at it 100 per cent-owned East Laverton project, also in WA.

Earlier drilling at East Laverton focused on the Ascalon and Bristol gold prospects, identifying potential for gold mineralisation.

It also generated robust targets for follow-up drilling that were assessed by leading expert on gold mineralisation and targeting in the Yilgarn Craton of WA, Dr Walter Witt.

Witt’s review confirmed the strong gold potential at East Laverton, and prioritised multiple targets for exploration in 2017.

A reverse circulation (RC) drill program is currently underway on the highest rated targets in the Stella Range Belt, which are at Desert Dragon, Cambridge and Cambridge North.

“Reconnaissance exploration we completed recognised the significant gold potential at East Laverton,” Prineas said.

“We were pleased this prospectivity was confirmed by one of Western Australia’s leading gold experts.

“We are systematically progressing all our exploration efforts in 2017, working through our pipeline of attractive gold and nickel-copper sulphide targets.”

St George Mining Ltd. (ASX: SGQ)
… The Short Story

HEAD OFFICE
Level 1
115 Cambridge Street
West Leederville WA 6901

Ph: + 61 8 9322 6600

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

DIRECTORS
John Prineas, Tim Hronsky, Sarah Shipway

THE INSIDE STORY: Middle Island Resources (ASX: MDI) has made positive inroads to reviving the Sandstone gold project and processing facility, located between the mining towns of Mt Magnet and Leinster in the East Murchison Mineral Field of Western Australia.

Middle Island Resources’ stated strategy is to recommission the Sandstone gold operation at the earliest opportunity.

“The key thing for the recommissioning of the plant is to identify some near-term, higher grade accessible ore to put in at the front end of the proposed PFS schedule to improve the payback period,” Middle Island Resources managing director Rick Yeates told The Resources Roadhouse.

We are implementing that strategy using various means to increase the likelihood of success.”

Middle Island completed an extremely busy March quarter, completing both Targeting and underground mining Concept Studies.

Other activity included RC drilling of greenfields gold targets and diamond core drilling of brownfields targets, while an assessment of adjacent permits hosting additional quantified resources and exploration potential was undertaken alongside reviews of third-party gold deposits within the broader Sandstone district.

The Targeting Study identified multiple targets within the Sandstone project, including two larger, higher-weighted targets and numerous smaller, lower priority opportunities.

All targets are being reviewed against the exploration database to determine the company’s best approach for on-going exploration.

The study led into a ground gravity survey to infill an existing 400m by 200m survey on a 100m by 50m pattern to refine known and interpreted syntectonic, felsic intrusive bodies Middle Island has identified to be elements controlling the location of gold mineralisation within the project.

The survey was undertaken over the north-western half of the project, with two rounds of infill surveying completed over higher priority targets.

Middle Island commenced a RC drilling program at the Macintyre prospect (along with minor infill drilling at the north-eastern extremity of the Two Mile Hill open pit deposit), where previous RAB drilling identified broad zones of shallow sub-horizontal gold mineralisation.

The RC drilling is expected to identify and quantify additional shallow gold mineralisation that may contribute towards the early re-commissioning of the Sandstone gold processing operation.

“We completed these two drilling programs over Easter looking for extensions that could contribute to a readily accessible open pit Resource,” Yeates explained.

“Should infill results at Two Mile Hill come back as we anticipate we could drop the optimum pit a further 20 metres – potentially up to 40 metres – which makes a substantial difference to the economics of the project.

“Unfortunately, we have hit a backlog of assaying at the lab, which means the results we expected to be receiving in May, most likely won’t be available until June, however, we do think they will be well worth the wait.”

The Two Mile Hill prospect also received some diamond drilling attention, partly-funded by the initial phase of the company’s successful Exploration Incentive Scheme (EIS) application, under which 50 per cent of the direct drilling costs (to a maximum of $150,000) are to be reimbursed by the WA State Government.

The Two Mile Hill diamond drilling comprised two deep holes of 450m and 500m with two key objectives.

The first hole (MSDD154) targeted dual electromagnetic (EM) plates interpreted to represent lenses of massive pyrite replacement associated with gold mineralisation within the deeper elements of the Shillington BIF package, adjacent to, and intruded by, the north-eastern contact of the Two Mile Hill tonalite.

This style of mineralisation is consistent with broad intervals of high-grade gold encountered along the western margin of the tonalite.

The second hole (MSDD155) tested the depth of sheeted vein/stockwork gold mineralisation within the northern extremity of the Two Mile Hill tonalite, well below the realms of any open pit cutback, to confirm the continuation of gold mineralisation at greater depth than previous drilling and assess the target’s potential as a possible sub-level caving (underground mining) opportunity.

“We believe there is a great deal of potential at the Two Mile Hill prospect,” Yeates said.

“However, the capital costs associated with a sub-level caving exercise may well be beyond us.

“Having said that, we would be keen to bring that potential to the attention of some of the mid-tier, or major, gold producers.”

Middle Island Resources Limited (ASX: MDI)
…The Short Story

HEAD OFFICE
Suite 1
2 Richardson Street
West Perth WA 6005

Ph: +61 8 9322 1430

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

DIRECTORS
Peter Thomas, Rick Yeates, Beau Nicholls

THE INSIDE STORY: S2 Resources (ASX: S2R) has made encouraging progress with the drill bit at the company’s 100 per cent-owned Skellefte project in Sweden.

S2 Resources commenced drilling at the Skellefte project last year on the first of over 100 VTEM anomalies it has identified at the project.

S2’s first VTEM geophysical survey, completed after it had acquired the project, was the first ever undertaken over the historic 100-year old mining region.

The survey identified 64 EM conductors, which was quickly increased in number when 40 further EM conductors were located by a second VTEM survey.

The company recently released assay results for its first three diamond holes from Skellefte, drilled to test the down plunge continuation of known mineralisation at the Bjurtraskgruvan VMS deposit.

The three holes were drilled on a broad spacing, tasked with ascertaining the immediate strike and down plunge potential of the deposit’s known near surface mineralisation.

Highlights from the drilling included:

SBJK170003
14.71 metres at 2.2 per cent zinc, 1 per cent copper and 5.4 grams per tonne silver from 176m, including 2.13m at 8.2 per cent zinc, 1.7 per cent copper and 8.5g/t silver from 177m;

SBJK170001
3.25m at 0.5 per cent zinc, 1.2 per cent copper and 5.4g/t silver from 185.1m, located 40m east along strike from hole SBJK170003; and

SBJK170002
3.06m at 1.3 per cent zinc and 9.7g/t silver from 21.3m, located 154m up dip of hole SBJK170003.

“Based on what we know of the overall geometry of the mineralisation, we have interpreted these intersections to be close to true width,” S2 Resources managing director Mark Bennett told The Resources Roadhouse.

The best intersection S2 Resources has achieved to date has come from the last of the three holes to be drilled (SBJK170003), which is also the deepest point drilled, hitting a depth of approximately 150m below surface, some 330m down plunge from the outcropping mineralisation. 

“The drilling outlined a VMS-style system that has a strike length of 260 metres, a down plunge extent of at least 330 metres, and is open down plunge beyond this,” Bennett explained.

“Surface EM and down hole EM (DHEM) in SBJK170003 has also shown the mineralisation continuing down dip and down plunge with the mineralisation comprising an upper lens of pyrrhotite dominated massive sulphides containing sphalerite (zinc sulphide) and a subjacent structurally remobilised footwall stockwork zone of chalcopyrite (copper sulphide) veins and stringers.

“The results are encouraging enough for us to drill several more holes to test down plunge of these intercepts as soon as the rig completes initial drilling at another target,” Bennett said.

The Bjurtraskgruvan deposit is demonstrative of the untapped potential at Skellefte that is only now receiving serious exploration attention since being acquired by S2 Resources.

Bjurtraskgruvan comprises outcropping volcanogenic massive sulphide (VMS) style mineralization originally identified and drilled by the Swedish Geological Survey (SGU) in the 1940s.

This historic drilling outlined a gently south dipping and southwesterly plunging zone of mineralisation that has long been ignored.

Intercepts from the SGU drilling include:

BJG80009
3.8m at 5.9 per cent zinc, 0.6 per cent copper, 8g/t silver;

BJG80007
6.2m at 3.9 per cent zinc, 0.4 per cent copper, 3g/t silver; and

BJG80001
6.1m at 3.6 per cent zinc, 0.2 per cent copper, 4g/t silver.

The Skellefte drilling results followed a new Mineral Resource estimate for the company’s Baloo gold deposit in Western Australia.

The revised Indicated and Inferred Mineral Resource estimate for the Baloo gold deposit comprised 4.22 million tonnes grading 2 grams per tonne gold for a contained 264,000 ounces of gold at a lower cut-off grade of 0.8g/t gold.

This was a 115 per cent increase in contained gold from the previous resource estimate at the same lower cut-off grade.

Of note was that nearly all of the increase in the Baloo Mineral Resource estimate comprised Inferred category material as it was based on broad-spaced deeper drilling undertaken down dip from the previous resource limit.

“A relatively thick, consistent zone of mineralisation was identified dipping steeply to the east and plunging moderately to the south,” Bennett said.

“The mineralisation remains open both down dip and down plunge beneath the limits of this drilling, and based on our deepest drilling, appears to be thicker at depth.”

S2 Resources (ASX: S2R)
…The Short Story

HEAD OFFICE
North Wing, Level 2
1 Manning Street
Scarborough WA 6019

Ph: +61 8 6166 0240

Email: admin@s2resources.com.au
Web: www.s2resources.com.au

DIRECTORS
Jeff Dowling, Mark Bennett, Anna Neuling, Grey Egerton Warburton.

THE INSIDE STORY: A recent foray into potash has by no means dampened BC Iron’s (ASX: BCI) commitment to iron ore.

BC Iron receives healthy earnings from iron ore, but recognises commodity diversification provides protection in the event of longer periods of low iron ore prices.

To that end, BCI is supplementing its iron ore earnings bytargeting gold/base metals and agricultural minerals.

“Iron ore is primarily driven by the Asian infrastructure investment theme,” BC Iron managing director Alwyn Vorster told The Resources Roadhouse.

“Gold is more dependent on global economic/political issues, and agriculture and industrial minerals are linked to global food consumption, population growth and reduction in arable land availability.”

BC Iron struck a Joint Venture in March with Kalium Lakes Limited (ASX: KLL) over the Carnegie potash exploration project, north-east of Wiluna in Western Australia.

“The Carnegie deal came about because we were looking to diversify into commodities with different drivers to iron ore,” Vorster explained.

“This move into potash, added to the pending conclusion of a scoping study on our Mardie salt project, positions BC Iron well in agricultural and other industrial commodities leveraged to a growing global population.”

The Carnegie project is prospective for large sub-surface brine deposits, which could be developed into a solar evaporation and processing operation producing sulphate of potash.

BC Iron can earn-in a 50 per cent interest of the Carnegie JV by spending up to $10.5 million over the next 2 to 3 years leading to a feasibility study.  

Vorster explained the deal did not mean BC Iron would be exiting the iron ore sector, adding that despite recent negative market sentiments, he declared the company remains 100 per cent dedicated to the commodity.

“We have a substantial royalty stream coming in from Iron Valley, and a very valuable asset in our Buckland project,” Vorster said.

“These two projects will be responsible for at least 50 per cent of our future earnings, so attention and resources should be allocated to the iron ore arm of the business accordingly.”

Iron Valley isin the Central Pilbara and is operated by Mineral Resources (ASX: MIN) under a royalty agreement.

As at 30 June 2016, Iron Valley’s Mineral Resource was 238.7 million tonnes at 58.4 per cent iron with an Ore Reserve of 123.2 million tonnes at 58.8 per cent iron.

Iron Valley is working well for BC Iron – during the quarter ending 31 December 2016, MIN shipped a record of 2.1 million wet metric tonnes, providing a record quarterly EBITDA for BC Iron of $8.1 million.

This was the third consecutive quarter record production and EBITDA figures had been achieved.

The Buckland project is a strategic mine-to-port iron ore development in the West Pilbara.

A 2014 feasibility study forecast a mine at Bungaroo South and independent infrastructure solution comprising a private haul road and transhipment port at Cape Preston East.

BCI has approval to be foundation developer of a transhipping facility at Cape Preston East with capacity of up to 20 million tonnes per annum for 20-years to meet demands of its development concept for the project.

“With the iron ore downturn in 2014 to 2016, BCI did not allocate significant resources to Buckland,” Vorster said.

“We recently appointed Viv Roberts a general manager for the iron ore division, who was previously general manager for Christmas Creek from conception through to being a 20 million tonnes per annum operation.

“Viv is the ideal person to take Buckland forward, now it is basically construction ready.

“BCI aims to select specific contractor partners during 2017 and progress Buckland towards early works at the mine and port site.”

As it spreads risk and builds alternative sources of revenue, BC Iron hopes to create potential earnings from gold or base metal investment.

“A more advanced stage gold or base metals project is required in our portfolio in the shorter-term as the most likely source to supplement our current Iron Valley income stream,” Vorster said.

“We are in discussions with various parties and remain positive BCI can secure involvement in that space during 2017.  

“BCI is different from many other smaller sized companies in that we have stable low risk earnings, and larger shareholders who support our diversification strategy into quality assets.”

BC Iron Limited (ASX: BCI)
…The Short Story

HEAD OFFICE
Level 1
15 Rheola Street
West Perth WA  6005

Ph: +61 8 6311 3400

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

DIRECTORS
Brian O’Donnell, Alwyn Vorster, Michael Blakiston, Jennifer Bloom, Martin Bryant, Andrew Haslam