Cassini Resources Shines Spotlight on WMP Cobalt Potential

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THE DRILL SERGEANT: Cassini Resources (ASX: CZI) answered investor and shareholder queries to provide a market update regarding the cobalt opportunities within the company’s West Musgrave project (WMP), located in Western Australia.

The WMP is part of an Earn-in/JV Agreement with OZ Minerals (ASX:OZL).

Cassini Resources said it had initiated a review of the West Musgrave project after considering recent rises in the cobalt price and the implications for the project.

The company considers one of these opportunities to be the amount of contained cobalt in the Nebo–Babel deposits that would be produced as a by-product of nickel and copper production.

The Nebo-Babel deposits contain approximately 30,000 tonnes of cobalt, which Cassini claims to be competitively placed against other cobalt dominant projects.

The company cited it 2015 Scoping Study, which included market advice that cobalt within nickel concentrates was healthy enough to attract by-product credits and proposed approximately 500 tonnes per annum of cobalt in concentrate for the life of mine (+10 years).

The Further Scoping Study (FSS) work currently underway will include new mine optimisation and financial modelling, likely to include a higher long-term cobalt price than the previous study.

The current spot price for cobalt is trading 95 per cent higher than the price used in the 2015 Scoping Study. 

Recent drilling at the One Tree Hill prospect encountered cobalt grades higher than present in the Resource for the company’s Nebo-Babel nickel-copper project with drill hole CZD0017 intersecting a massive sulphide zone returning:

3.2 metres at 0.1 per cent cobalt along with 2.16 per cent copper, 0.58 per cent nickel and 1 gram per tonne PGE within a broader disseminated zone of 34m at 1.05 per cent copper.

A review carried out by Cassini of the regional drill database is underway to evaluate potential cobalt opportunities that have not been previously recognised.

This has already identified cobalt anomalies in the historical drilling including:

5m at 0.24 per cent cobalt;
4m at 0.25 per cent cobalt; and
1m at 0.45 per cent cobalt at bottom of hole.

“The emerging theme of specialty metals associated with electric vehicles and other new technologies has gained substantial support over the last 12 to 24 months,” Cassini Resources managing director Richard Bevan said in the company’s announcement to the Australian Securities Exchange.

“In response to this, we have received significant inquiry from shareholders and the investment community on Cassini’s exposure to cobalt.

“While Cassini remains focussed on developing the nickel and copper resources at the West Musgrave project, the company is well placed to benefit from increasing prices in cobalt.

“Cassini is able to differentiate itself from its competitors in this space by already having a large resource that is extractable using conventional processing technologies.

“Our well-defined feasibility and development timeline should provide investors with confidence that Cassini will reap the benefits of rising cobalt prices in the short to medium term.

“We look forward to incorporating cobalt opportunities into our project-wide exploration strategy and continuing the development work on the Nebo-Babel nickel-copper project with our partner OZ Minerals”.

Email: admin@cassiniresources.com.au

Website: www.cassiniresources.com.au

What the Analysts Say

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WHAT THE BROKERS SAY: The Roadhouse’s friends at Breakaway Research run their ruler over lithium extraction play, Lepidico Ltd.

Website: www.breakawayresearch.com

Company: Lepidico Ltd (ASX: LPD)

Lepidico (ASX: LPD) owns the L-Max technology – a technology which enables the extraction of lithium from lithium micas like lepidolite

 In the past, these micas have been difficult to process and hard rock lithium miners have tended to mine only spodumene-rich deposits.

The L-Max technology leaches the lithium in a relatively straightforward process using commonly available reagents.

The process produces a number of valuable by-products and this value offsets the cost of producing lithium on a C1 cash cost basis (estimated by the company’s pre-feasibility study).

The company has released project parameters for its DFS and seeks to fast track development for first production in 2019.

The L-Max technology is a proprietary process that is the subject of International Patent Application which is pending in 148 countries.

The process allows the extraction and recovery of lithium from lithium bearing micas such as lepidolite and zinnwaldite in comparison to spodumene (pyroxene) which is present in the traditional hard rock deposits.

These Li-rich micas minerals have largely been overlooked as a source of lithium until the advent of L-Max which now presents a commercially viable process.

The company has completed a 140 hours mini-plant trial utilising the L-Max technology.

The plant was successful in processing a lepidolite concentrate to achieve a 94% recovery, producing a lithium carbonate with a purity >99.5%.

The mini-plant trial also produced various by-products from the leach liquor generated including potassium sulphate, sodium silicate and caesium/rubidium formate.

The successful mini-pilot plant trials encouraged the Company to commence the PreFeasibility Study (PFS) for a Phase 1 plant development utilising the services from its lead consultant, MinMet Services Pty Ltd.

The Study investigated technical aspects and the viability of a small scale commercial LMax plant which would process a lithium-mica concentrate feed at a rate of 3.6 tonnes per hour (tph) to produce approximately 3,000 tonnes per annum of battery grade lithium carbonate and a suite of valuable by-products.

Lepidico has been actively seeking projects (exploration through to projects with resources) that may provide mineralisation that will be amenable to L-Max processing.

The most recent has been the announcement of an ore access agreement with Grupo Moto over the Alvarrões lepidolite mine in Portugal.

The company recently announced it had signed a farm-in agreement with Pioneer Resources to earn a 75% interest in Pioneer Resources’ (ASX: PIO) ‘PEG009’ lepidolite prospect located within the Pioneer Dome project near Norseman.

The farm-in is by funding a drilling program to evaluate its lithium-mica resource potential, with the objective of delineating of at least 500,000 tonnes grading 1.2% lithium oxide (Li2O) or more to earn a 75% interest.

If this was successful, it would provide five years of feed for another Phase 1 L-Max Plant.

Lepidico has developed the patented L-Max technology with its chairman and inventor, Gary Johnson, and has the team to demonstrate its commercial viability.

The company is now clearly focused on:

The commercial implementation of the L-Max technology by establishing a plant at Kenora and processing lepidolite concentrate from the Separation Rapids mine, both in Ontario; and

Securing resources in a number of other projects and locating plants in other strategic markets around the world.

The recent pre-feasibility study on the Phase 1, 3,000tpa lithium production project has been completed at a high level of detail. Even at this Phase 1 stage, the project generates robust returns and has the capacity to provide a multiple share price uplift as the project’s parameters are firmed up in the forthcoming Definitive Feasibility Study and the project is financed, constructed and moves towards commissioning in 2019.

However, the exciting aspect of the L-Max technology and the company’s business model is its ability to be ramped up to higher production levels at Kenora (Phase 2 involves a production increase to 20,000tpa LCE) as well as being replicated across a number of world-wide projects.

The recently announced deal on the Alvarrões lepidolite mine in Portugal provides a potential second site in a European jurisdiction.

Meanwhile a takeover offer by Lithium Australia (ASX: LIT), albeit currently non-commercial terms relative to the share price, endorses the value of the L-Max technology and provides underlying share price support.

It has also generated momentum in Lepidico to ensure that the market understands the potential value of the L-Max technology.

Disclaimer: The above is intended as a guide only. The Roadhouse accepts no responsibility for investments made from this advice, successful or otherwise.

The views, opinions or recommendations of this article do not in any way reflect the views, opinions, recommendations, of The Resources Roadhouse.

The Roadhouse makes no representation or warranty with respect to the accuracy, completeness or currency of the content. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian financial services licensee before making investment decisions.

Fertiliser Production Vital to Keep Food on Global Tables

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COMMODITY CAPERS: The obesity epidemic sweeping western society hides a far more alarming reality, which is simply that the world is running out of food.

The reason for the impending shortage, however, does not rest at the unseen feet of our corpulent compatriots, it’s just that the world population is growing at increasing rates.

Depending on which expert you talk to, the world’s population is forecast to grow to somewhere between 9.5 and 10.5 billion people by 2050 from its current base of around seven billion.

Much of that growth is expected in countries developing very quickly, such as China, India and Brazil.

As population increases, the arable lands available are not predicted to follow at the same rate with arable land per person falling from a quarter of a hectare to around 0.15 of a hectare.

“The world needs to produce at least 50 per cent more food to feed nine billion people by 2050,” the World Bank said when discussing global food security.

“The land, biodiversity, oceans, forests, and other forms of natural capital are being depleted at unprecedented rates.

“Unless we change how we grow our food and manage our natural capital, food security – especially for the world’s poorest – will be at risk.”

In a recent report from the Western Australia Department of Agriculture and Food, entitled – Western Australian agriculture and food: a global opportunity – the Department claimed the State could become a world leader in food production.

“The Western Australian agrifood sector has a long‑awaited opportunity to grow by feeding the rapidly expanding urbanised middle class around the world, particularly in Asia, who are demanding high‑quality, traceable produce, especially protein,” the report said.

“Sector and government specialists agree the agrifood sector has the potential to grow and contribute more to the state’s economy.

“In support of this, the Western Australian Government has set a target of enabling the sector to double in real value between 2013 and 2025, using export value as an initial measure of progress against this.”

Western Australia’s top five agrifood export markets in 2014/15, were all located in Asia with exports to China, Indonesia and Vietnam growing by more than 20 per cent per annum over the past five years.

“The growth opportunity for Western Australia is real,” The report claimed.

“Given the strong demand coming from Western Australia’s major export destinations in Asia, the 2025 target could even be considered conservative.”

With this potential growth slated to become a reality, obvious potential exists for some industries to grow through domestic demand, one in line to enjoy this attention being the fertiliser industry.

“The Australian fertiliser industry generated around $3.9 billion in revenue during the 2016-17 year,” BDO partner in corporate finance Adam Myers said at the 2017 RIU Explorers Conference in Fremantle.

“There are approximately 289 businesses involved in the industry, however, only three companies make up over 55 per cent of that market.

“On a global scale, Australia makes up just two per cent of the market.”

There are three major type nutrients that are required – in amounts of hundreds of kilograms of per hectare world-wide – to yield good plant growth.

These are nitrogen (N), phosphorous (P) and potassium (K); together they constitute the NPK stamped on bags of fertiliser bought from garden centres every weekend.

They are not interchangeable and depending whether it is roses growing in Grandma’s garden, wheat in the fields of Western Australia or bananas in northern Queensland, the correct amount of each is vital to the cause.

Nitrogen ensures production of new cells and enzymes and it is responsible for leaf and stem growth.

It is also a major component of chlorophyll, which gives plants their green pigments.

Phosphorous – in the form of phosphate – promotes root development, encourages root growth and blooming and it is critical to the photosynthesis process as well as being an important ingredient in livestock feed.

Potassium – in the form of potash – encourages the uptake of water, increases plant resistance to drought and disease and activates enzymes significant for plant growth.

The astounding statistic in regards to fertilisers is that Australia doesn’t boast a domestic supply with all potash fertilisers consumed by domestic food producers being imported.

“Meeting the 2025 target is still going to take a considerable, coordinated and well‑directed effort,” the Department of Agriculture and Food observed.

“This will include a clear understanding of what consumers want; better targeted products and services; development and application of appropriate business models; supporting infrastructure; investment attraction; and government and sector partnerships.”

Myers suggested there would be plenty of opportunities arising for the local agribusiness sector as iy gains more interest, particularly from overseas.

This, he indicated, has already commenced with the past few years with investment rolling in from China, but most surprisingly, the bulk flowing into the country in the form of increased direct investment from North America and Europe.

“The returns on offer from Australian agriculture are attractive compared to what is being realised in foreign markets,” Myers explained.

“North American pension funds, for example, have been very active in seeking out large-scale Australian agriculture investment opportunities.

“These opportunities, however, are lacking given the makeup of our agriculture industry.”

Chinese investment into Australia reached $US375 million in 2015 and has continued to grow in 2016 and although there has been some significant attempts to invest that have been knocked back, the appetite remains.

One main contributing factor to this is the view of foreign investors that Australia is blessed with a relatively stable political environment and, just as important, a robust legal system.

“This combined with access to, and demand from, Asia for quality Australian made and grown food, the low Australian dollar and the perception that Australian land is cheap, have made Australia an attractive destination for Asian capital,” Myers said.

“The competition for Australian agriculture assets from local institutions has been very low

“Until recently, the returns on offer from other asset classes that they know a lot better – such as commercial property and equites have been higher

“So, the Funds have tended to stick to the traditional investment space.”

 

Australian Companies Making Their Mark on the Global Fertilser Market

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COMMODITY CAPERS: If a market appears, Australia has always been able to identify a mine to supply it. These ASX-listed potash-focused entities are showing how it’s done.


AUSTRALIAN POTASH (ASX: APC)

The main project for Australian Potash is the 100 per cent-owned Lake Well potash project, located 500 kilometres north-east of Kalgoorlie in the eastern goldfields region of Western Australia.

The project hosts a JORC 2012-compliant Inferred Mineral Resource, which has been measured considering potential future economic abstraction estimated at 18.4 million tonnes at 8050 milligrams per litre (mg/L) (8.05kg/m3) Sulphate of Potash (SOP).

A high-grade zone occupying the western part of the Lake Wells potash project has an Inferred estimate of 10.5 million tonnes at 9028 mg/L (9.028 kg/m3) SOP.

Australian Potash has also reported its Resource estimate using total porosity, which estimates the total amount of in-situ brine in the aquifer.

The company believes this allows investors to more easily make a comparison between its Resource estimate and estimates made by companies that choose not to disclose their resource estimates using specific yield.

Mineral Resource Estimate using total porosity the total in-situ Inferred Mineral Resource estimate has been reported at 70 million tonnes of SOP at 8.05kg/m3, including a high-grade zone of 40 million tonnes of SOP at 9.03kg/m3.


PARKWAY MINERALS (ASX: PWN)

Parkway Minerals (ASX: PWN) (formerly Potash West) recently took a plunge into the Western Australian salt lake sector with the establishment of the Lake Barlee potash/lithium brine project, located northwest of Kalgoorlie.

Parkway Minerals secured 10 exploration licenses covering 1,834 square kilometres of Lake Barlee, approximately 200km north of the township of Southern Cross in Western Australia.

Parkway has pegged nine exploration licenses, which are still in the application process, and recently agreed to purchase granted exploration licence 77/2347 from Dakota Minerals (ASX: DKO) giving the company a dominant landholding on the lake.

Parkway said this was a similar exploration model used by existing salt lake potash explorers at sites within Western Australia.

“This transaction allows PWN to accelerate its evaluation program on Lake Barlee,” Parkway Minerals managing director Patrick McManus told the Australian Securities Exchange.

“The region is very prospective as a source of potash from brines.

“Western Australia, Australia and our near regional neighbours are significant consumers of potash so there is a window of opportunity there for new local, low-cost supplies for the agricultural sector.”


AGRIMIN (ASX: AMN)

Agrimin has 100 per cent-ownership of the large-scale Mackay Sulphate of Potash project located on Western Australia’s largest salt lake covering approximately 2,784 square kilometres.

Agrimin completed a Scoping Study for the Mackay project in 2016, which indicated SOP production of 370,000 tonnes per year over a 20 year life, with average operating cash costs of US$256 per tonne Free on Board.

Production design for Mackay has SOP production commencing with brine being pumped from trenches into a series of solar evaporation ponds.

The Mackay brine deposit commences just below the surface and the Scoping Study incorporates brine extraction exclusively from trenches to a depth of only 5.5m into the lakebed.

The plan is to dry harvest the crystallised potassium salts from the ponds and feed them into a process plant.

Agrimin describe the process route as conventional, which will comprise milling, flotation, SOP crystallisation, drying and sizing.

The SOP products will be transported in bulk by road trains to a rail load-out located in Alice Springs and then railed to a port for shipment.


PLYMOUTH MINERALS (ASX: PLH)


Plymouth Minerals is excited by the potential of the company’s Banio in Gabon.

Historic drilling at the Banio project has demonstrated excellent geology, which the company considers to combine well with a supportive government, excellent logistical access to export and an identified market in South America.

The company released an Exploration Target last year defined in two areas totalling 126 square kilometres of the Banio potash project.

The potash (sylvinite and carnallitite) Exploration Target totalled 6 billion tonnes to 10.4 billion tonnes at 12 to 14 per cent potassium oxide (K2O).

This included a shallow high-grade potash (sylvinite) Exploration Target at the Alpha prospect of 262 million tonnes to 415 million tonnes at 18 to 22 per cent K2O*.

Two carnallitite targets (Ndindi North and Ndindi South) have also been defined with a combined 5.7 to 10 billion tonnes at 12 to 14 per cent K2O.

As this is an initial Exploration Target defined in two areas of the Banio potash project, Plymouth acknowledges there has been insufficient exploration completed to date to estimate a Mineral Resource in accordance with JORC 2012 guidelines and that any potential quantity and grade of the Banio Exploration Target is conceptual in nature.


VERDANT MINERALS (ASX: VRM)

Darwin-based Verdant Minerals (ASX: VRM) is developing a portfolio of phosphate and sulphate of potash (SOP) projects, located in the Northern Territory of Australia.

Verdant Mineral’s attention is on the company’s 100 per cent-owned Ammaroo phosphate project, located 180km south east of Tennant Creek and 90km from the Central Australian Railway line.

The Ammaroo phosphate project already boasts a resource of 1.145 billion tonnes of phosphate ore and an average grade of 14 per cent phosphorous pentoxide (P2O5) at a cut-off grade of 10 per cent P2O5 or 338 million at an average grade of 18 per cent P2O5 at a cut-off grade of 15 per cent P2O5.

Ammaroo is an advanced project, currently the subject of a bankable feasibility study (BFS) and associated environmental approvals process, for the development of a phosphate rock concentrate operation to produce up to two million tonnes per annum of phosphate rock concentrate for export to Asian markets.

The study and approvals process are expected to be completed in late 2017.

Verdant Minerals has flagged intentions to be freighting rock phosphate from Central Australia north to Darwin on the AustralAsia railway and then shipping it to Asia in late 2019.

Metro Mining Releases Bauxite Hills BFS and Upgrades Reserves

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THE DRILL SERGEANT: Metro Mining (ASX: MMI) announced completion of a Bankable Feasibility Study (BFS) for the company’s Bauxite Hills mine, located approximately 95 kilometres north of Weipa on western Cape York in North Queensland. 

Metro Mining said the BFS, was completed by MEC Mining, had confirmed strong financial returns from the project, including:

Initial capital cost of $35.8 million (including 10% contingency);
Average annual EBITDA of $145 million;
After tax NPV10 of $601 million;
After tax IRR of 81 per cent;
Life of mine revenue of $5.7 billion and life of mine EBITDA of $2.5 billion.

The BFS determined a 17-year initial mine life with production to commence in April 2018 at an initial rate of 2 million tonnes per annum ramping up to a steady state 6 million tonnes per annum over the first four years.

Metro Mining said the BFS had also demonstrated benefits from the company’s acquisition of Gulf Alumina Limited in December 2016.

“The completion of the Bankable Feasibility Study is an enormous achievement for the company and a testament to MEC, Metro’s project team and the quality of the project,” Metro Mining managing director Simon Finnis said in the company’s announcement to the Australian Securities Exchange.

“The BFS also confirms the benefits of acquiring Gulf allowing one integrated development plan across both asset bases.

“We look forward to moving into the construction phase in mid-2017 once all environmental approvals have been received and funding secured.”

The BFS integrated the resources acquired from Gulf Alumina, resulting in an increase to the company’s total ore reserve to 92.2 Million tonnes.

The study identified a Probable Ore Reserve of 43.9 million tonnes (49% total aluminium oxide [Al2O3], 14.6% total silicon dioxide [SiO2]) Direct Shipping Ore (DSO).

It also identified a JORC 2012-compliant Proved Ore Reserve of 48.3 million tonnes (49.8% total Al2O3, 12% total SiO2) DSO.

Email: info@metromining.com.au

Website: www.metromining.com.au

Image Resources Confirms Grade Extensions at Boonanarring

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THE DRILL SERGEANT: Image Resources (ASX: IMA) has confirmed a 5.6 kilometre extension of high-grade mineralisation associated with the company’s Boonanarring mineral sands deposit in Western Australia.

Image Resources describe Boonanarring is being arguably the highest grade, high-zircon undeveloped mineral sand deposit in Australia.

The recent drill program was located within a road reserve on the Quinns Hill tenement (E70/3100), consisting ten drill holes designed to test the extension of the high-grade eastern strand of the Boonanarring mineral sand deposit, adjacent to and to the west of the Brand Highway.

The design of the program was based on an extrapolation of previous drilling by Image and limited historic drilling by Iluka.

Previous reported drilling by Image on the southwest side of the Brand Highway included results of 8 metres at 21.6 per cent heavy minerals (HM) from 38m in drill hole IM0083; and 14m at 17.9 per cent HM from 40m in drill hole IX00103.

Hole IX00250 of the current program commenced on the eastern edge of the Brand Highway and contains 8m at 16.3 per cent HM.

Image said the high-grade mineralisation is present on the western edge of the Brand Highway.

Further results include:

IX00244
8m at 21.1 per cent HM from 23m; and

IX00245
8m at 23.8 per cent HM from 27m.

“The extraordinary high-grade results of this current drilling program north of Boonanarring have the potential to add significantly to the company’s inventory of high-grade mineral sand deposits in the North Perth Basin,” Image Resources executive exploration director George Sakalidis said in the company’s announcement to the Australian Securities Exchange.

“The company has also shown that the Boonanarring deposit is significant in size, as this drilling shows potential to be larger than 18.8 kilometres in length, with further upside potential both to the north and south.”

The company claimed the confirmation of the extension from results achieved during a recent drilling program undertaken at Boonanarring, where it is currently in the final stages of a Bankable Feasibility Study.

Image said it is planning to develop the project with a goal of first production in early 2018.

The Boonanarring deposit has estimated mineral resources of 43.8 million tonnes at 5.6 per cent HM with 18.1 per cent of the HM as high value zircon and with 72 per cent of the HM as valuable heavy minerals (VHM).

The area containing the current mineral resources at Boonanarring stretches 13.2km to the south on the east side of Brand highway.

The new drilling results confirm the high-grade mineralisation extends to the north on the west side of the Brand highway for an additional 5.6km.

“The results of the recent drilling program are extremely positive given the company’s current drive to move the company to first production at Boonanarring in early 2018,” Image Resources managing director Patrick Mutz said.

“The upside potential of additional high-grade mineralisation within pumping distance of the planned location of the wet concentrator plant at Boonanarring could add significant value to the project.”

Website: www.imageres.com.au

Blackham Resources Prepares to Increase Wiluna Processing Capacity

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THE INSIDE STORY: Blackham Resources (ASX: BLK) completed the first gold pour at the company’s Matilda/Wiluna gold project in Western Australia last year, a feat that would satisfy any number of companies.

Blackham Resources, however, is not your average company, something it has continually demonstrated since it began consolidating ground surrounding the Wiluna gold processing plant just a couple of years ago.

Blackham poured its first Matilda gold in the 3rd week of October 2016 and by the end of the December quarter had produced a total of 8,773 ounces of gold with 4,894 ounces produced in the month of December.

This all happened as Blackham completed refurbishment of the Wiluna gold processing plant and forged ahead to ramp up production to its Stage 1 production target of 100,000 ounces per annum.

The plant optimisation and de-bottle necking program is ongoing as the ramp up phase continues.

Gold production, at this stage, is running at a maximum level with Blackham maintaining its FY17 production forecast at 60,000 to 70,000 ounces per annum. 

That, however, was then, and the now keeps powering on with Blackham recently announcing a further upgrade to Mineral Resources at the Matilda/Wiluna operation to 63 million tonnes at 3.2 grams per tonne gold for 6.4 million ounces of gold.

Of this there are 31 million tonnes at 3.1g/t gold for 3.1 million ounces of gold sitting in the Measured and Indicated categories.

The large increase in Mineral Resources at Wiluna has been attributed to a shift of focus.

Previous estimates have focused on the high-grade underground mining at a 4g/t lower cut within the project area, however, regional exploration carried out by Blackham discovered substantial lower grade open pit mineralisation was not taken into consideration by the previous interpretation.

Blackham incorporated regional exploration drilling results to develop a new geological model, in which the mineralisation was re-interpreted above a 0.3g/t lower cut.

This model was the basis for the updated Mineral Resource estimate with potentially open pit-able material reported within an $1,800 per ounce optimised resource pit shell.

The modelling included updated Mineral Resources for a number of open pit sites within the immediate project area, including: Happy Jack; Creek Shear; and Bulletin, as well as the Adelaide/Moonlight/Lone Hand group of deposits.

Importantly the company announced a maiden open pit resource at Wiluna of 12.5 million tonnes at 2.6g/t for 1.06 million ounces, of which 730,000 ounces is in the indicated category, which will underpin the company’s expansion plan.

These Resources complemented Mineral Resources for the East and West Lodes that were reported in December 2016.

All resources are within a 20-kilometre radius of the Wiluna gold processing plant.

Blackham is now advancing mining and processing studies to increase processing capacity to more efficiently develop the upgraded Resource base.

A draft report by Orway Mineral Consultants (OMC) recommended a processing flowsheet for an additional 1.5 million tonnes per annum in a new crushing, grinding and flotation circuit to feed the existing BIOX plant.

The commissioning of this added capacity in addition to the recently refurbished 1.7 million tonnes per annum oxide circuit would increase total capacity to approximately 3.2 million tonnes per annum across the oxide and sulphide circuits.

With all Resources located within a 20-kilometre radius of the Wiluna processing hub, the expanded Wiluna plant would deliver substantial economies of scale to the combined project.

For now, the current mine planning will remain focused on the planned 1.5 million tonnes per annum sulphide circuit being fed equally from both the open pits and the Wiluna underground, which would have two of the existing five declines in operation at any point in time.

A new 1.9-kilometre long open pit resource model has been completed for the Happy Jack, Creek Shear, Gap and Bulletin and Lodes based on historic and recent drilling.

Total JORC 2012-compliant Indicated and Inferred pit resources for these lodes within an $1800 per ounce shell comprise 2.85 million tonnes at 2.75g/t gold for 250,000 ounces.

Underground resources have been modelled using a 4g/t lower cut and reported above a 2g/t cut-off outside the $1800 per ounce shell.

The pit optimisation results identified areas of limited drilling where Blackham considers potential exists to increase resources further, especially at the Happy Jack deposit and between the Gap and Bulletin pits.

The new open pit resource model for the Adelaide, Moonlight and Lone Hand deposits resulted in total JORC 2012-compliant Indicated and Inferred open pit resources within a $1800 per ounce shell of 0.7 million tonnes at 3.14g/t gold for 70,000 ounces.

Although the Mineral Resources for the East and West Lodes were updated in December 2016 to 8.6 million tonnes at 2.5g/t gold for 700,000 ounces (59% Indicated), Blackham has not included the mineralisation intersected in between the East and West Lodes in the current geological model.

This is due to the sparse nature of the drilling and the current uncertainty of the orientation of the mineralised structures, which remains open down dip and along strike to the north and south.

Blackham has two RC rigs and one diamond rig working around the clock on a 60,000m drill program around the Wiluna open pits aiming to upgrade the Wiluna open pit resources to the Measured and Indicated categories.

The company’s ambitions will be helped by funds from a recently-completed raising of $35 million through a heavily oversubscribed Placement that received strong institutional support from both existing and new shareholders.

The proceeds will accelerate the existing growth strategy by expediting conversion of the large resource base into reserves, improving and lengthening the mine life, advancing studies to enhance the Stage 2 expansion economics, and committing to Stage 2 engineering and long lead items on completion of the current Feasibility Study.

“The proceeds from this Placement will enable us to complete the Wiluna expansion studies aimed at lifting plant throughput to 3.2 million tonnes per annum,” Blackham Resources managing director Bryan Dixon told The Resources Roadhouse.

“The geological and mining studies we have completed to date demonstrate strong grades for an operation of this size.

“The initial expansion plan is expected to be completed in the near term and having a strengthened balance sheet will allow us to expedite our growth plans.”

Blackham recently demonstrated its intention to be a good neighbour in the region by striking a non-binding Memorandum of Understanding with GWR Group Limited (ASX: GWR) in regards to the latter’s Wiluna West gold project.

The deal is a good fit for both companies as Blackham has a big gold processing plant that needs to be kept fed and GWR has a deposit worthy of mining.

The Wiluna West gold project contains JORC 2004-compliant Mineral Resources of 3.48 million tonnes at 2.3g/t gold for an estimated 2.6 million ounces of gold, including an Indicated Resource estimate of 46,000 tonnes at 3.5g/t gold for 5,200 ounces and an Inferred Resource estimate of 3.43 million tonnes at 2.3g/t gold for 253,000 ounces.

The MoU sets the scene for Blackham and GWR to delineate, study and mine gold deposits at Wiluna West for processing through the Wiluna plant.

The MoU is grounded on the assumption both parties will agree to either a profit sharing or ore sales arrangement for Wiluna West.

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

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

Ph: +61 8 9322 6418

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

DIRECTORS
Milan Jerkovic, Bryan Dixon, Alan Thom, Greg Miles, Peter Rozenauers

S2 Resources Shifting Focus from Polar Bear to Sweden

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THE INSIDE STORY: S2 Resources (ASX: S2R) is continuing to make inroads with its exploration programs across its portfolio of both domestic and international projects.

S2 Resources owns 100 per cent of the Polar Bear gold project in Western Australia, which covers the southern continuation of the ultramafic stratigraphy that hosts the Kambalda and Widgiemooltha nickel deposits.

It is largely concealed beneath the salt-lake sediments and sand dunes of Lake Cowan and takes in approximately 130 square kilometres of underexplored ground located between the two, 10 million-ounce, world-class gold producing centres of St Ives and Norseman, and southeast of the two million ounce Higginsville gold operations of Westgold.

S2 Resources’ main target at Polar Bear is the Baloo gold deposit where the company recently announced an upgrade to the Mineral Resource estimate.

Towards the end of 2016, S2 completed a drilling campaign at Baloo down dip of the known Resource that identified further mineralisation over a strike length of at least 250 metres at depths of 100 to 200 metres below previous drilling and below the limits of the Baloo Mineral Resource estimate.

“The new surface Resources appears to have the potential for a good open-pit, but at this stage we’re just trying to follow the scent down dip and down plunge at Baloo to see where it takes us,” S2 Resources managing director Mark Bennett told The Resources Roadhouse.

“We’re not far from Higginsville where Avoca had some success doing a similar thing in chasing the trail of historic gold intercepts, which led it to the Trident and Athena deposits.”

Better results from the drilling included:

SPBD0351
6m at 2.23 grams per tonne gold from 263m and 8.4m at 1.63 g/t gold from 282m, located 130m down dip of previous drilling and 120m down dip of the limit of the Baloo resource;

SPBD0353
3.15m at 3.45g/t gold from 303.15m, located 80m south and down plunge of hole SPBD0351;

SPBD0352
7m at 2.36g/t gold from 369m and 5.45m at 3.3g/t gold from 378.75m, located 100m south and down plunge of hole SPBD0351

SPBD0349
11.9m at 1.3g/t gold from 399m, 0.9m at 44.1g/t gold from 413.75m, and 0.75m at 2.21g/t gold from 416m, located 45m south and down plunge of hole SPBD0352, and also 225m down dip of previous drilling and 130m down dip of the limit of the Baloo resource.

The results enabled the company to re-estimate the Indicated and Inferred Baloo Mineral Resource of 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 is a 115 per cent increase in contained gold from the previous resource estimate at the same lower cut-off grade, most of which comprises Inferred category material due to the broad spacing of the drilling.

Importantly, the deepest drilling identified a relatively thick, consistent zone of mineralisation dipping steeply to the east and plunging moderately to the south up to around 14m true thickness, which is open both down dip and down plunge beneath the drilling limits.

These results are encouraging; however, S2 Resources does find it hard to ignore the potential of its Skellefte project in northern Sweden.

Skellefte is in an established mining district that contains numerous major polymetallic zinc-copper-gold-silver volcanogenic massive sulphide (VMS) deposits.

In an area that also host the mining and smelting operations of local hero Boliden, S2 has approximately 551 square kilometres of ground, which it considers highly-prospective for similar polymetallic VMS mineralization and orogenic shear zone hosted lode gold mineralisation.

The company’s confidence in the Skellefte project stems from the inordinate number of targets it has to choose from.

S2’s first VTEM geophysical survey – the first ever undertaken over the historic 100-year old mining region – identified 64 EM conductors.

S2 has since increased this number with the identification of more than 40 new EM conductors by a second VTEM survey flown on ground the company has acquired since the first survey was undertaken.

Recent drilling carried out on the Svan Vit prospect intersected several narrow zones, measuring 10 to 30 centimetres, of sphalerite (zinc sulphide) mineralisation predicted by a down hole electromagnetic (DHEM)survey carried out undertaken in 2016.

Holes SSVT170005 and SSVT170006 were drilled into the upper part of a downhole EM (DHEM) conductor, approximately 25m west along strike from previous drilling.

The drill rig has now moved to the Bjurtraskgruvan prospect, which came to the company’s attention late last year.

Bjurtraskgruvan comprises outcropping massive sulphide mineralisation and has recorded mineralised intercepts in limited historical drilling.

The prospect is coincident with one of the new EM anomalies (Vargfors 401-4) identified in the recent VTEM survey.

S2 has collected ten rock-chip and float samples from this outcrop that have all been enriched in either zinc or copper-gold-silver.

Three samples graded at 2.68 per cent to 6.47 per cent zinc, with negligible copper, gold or silver, while the other seven samples graded at 4.71 per cent to 13.25 per cent copper, 0.26g/t to 6.74g/t gold and 30g/t to 95g/t silver, with negligible zinc.

A second phase of ground-based moving loop electromagnetic (MLEM) surveying at Bjurtraskgruvan extended the previously identified conductor some 200m along strike and 200m down plunge to the southwest beyond existing drilling.

Assay results from base of till (BOT) sampling located 150m to the west of the Bjurtraskgruvan gossan also identified a strong geochemical anomaly beneath cover along strike from the known outcropping volcanogenic massive sulphide (VMS) mineralisation.

The peak of the BOT anomaly comprises strongly anomalous silver (15.4g/t) with elevated lead (0.14%) and zinc (413ppm) concentrations.

An initial three holes have been planned to test the extended EM anomaly down plunge from known mineralisation and beneath the BOT anomaly.

“Polar Bear will probably not receive as much attention as it deserves in the short term as our main short-term focus will be centred on Sweden and the large number of drilling targets we have created there,” Bennett said.

“We expect to be very busy in Sweden between now and Easter, which means most of our exploration team who would normally be at Polar Bear will be up there to ensure we test as many targets as possible.

“Having generated so many targets through our VTEM surveys, there is really no way of discerning which target may be better than another, so it really is a process of drilling each one as quickly as possible to see what we can find.

“Having said that, it would be great if we were to find something big with target number ten rather than having to wait until target number 90.”

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.

Lithium Australia Developing a Varied Lithium Project and Technology Portfolio

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THE INSIDE STORY: Lithium Australia (ASX: LIT) has enjoyed much success developing the company’s own unique halogen-based hydrometallurgical process.

The company’s trademarked Sileach  process is a breakthrough technology that allows lithium to be extracted from spodumene, and other silicates, without expensive roasting. 

The Sileach process is a hydrometallurgical method of recovering lithium from a wide variety of lithium bearing minerals, including high-grade spodumene, currently the primary source of hard-rock lithium production.

The Sileach process aims to reduce the cost of producing lithium chemicals by recovering lithium without roasting, an energy-intensive, and expensive step required with conventional extraction.

Roasting is less environmentally-friendly compared to the hydrometallurgical approach of Sileach.

If proven commercially viable, Sileach will release value from stranded lithium silicate deposits where sub-economic grades have made them uneconomic. 

Historically, only the highest grade minerals are treated, as costs of conventional processing using roasting is high, therefore needing high-grades  to cover costs; but, if treatment costs are lower, cut-off grades decrease and more resources are economic.

A potential lowering of cut-off grades for resource calculations, means expansion of existing resources without requiring further drilling, and greater recovery of metal inventories.

Lithium is precipitated from solution in the Sileach process, allowing all impurities in lithium silicate feed to be rejected during the production of lithium chemicals to produce a high-quality product suitable for battery cathodes.

This means low-grade spodumene concentrates, and other silicates, which would be deemed unmarketable due to impurity concentrations, could now be considered viable process feed.

“We are determined to become a key player in the future of the lithium chemical supply chain,” Lithium Australia managing director Adrian Griffin told The Resources Roadhouse.

“To do that we have to do more than just produce a concentrate.

“We also need to be able to deliver to our customers what they want – which is a lithium chemical product at a low cost.

“Technology is the key to that success, which is what Lithium Australia is developing through its unique Sileach technology.”

LIT hopes to camp in the lowest quartile of the lithium production cost curve, from where it can confront higher rungs of the value chain, where existing expensive technology has, until now, barred entry for new competitors.

Testwork undertaken at ANSTO Minerals (a division of the Australian Nuclear Science and Technology Organisation) to produce lithium carbonate from material processed using the Sileach process surpassed set quality specifications.

Processing ore from Lepidolite Hill in Western Australia through the Sileach pilot plant produced battery-grade lithium carbonate.

The quality of the lithium carbonate either met or exceeded the specification of battery grade lithium carbonate produced by one of the world’s largest suppliers of lithium chemicals, FMC Lithium.

The result was a positive warm up to planned continuous Sileach pilot plant operations on spodumene concentrates from Pilbara Minerals’ (ASX: PLS) Pilgangoora project.

“Being able to produce lithium carbonate of such purity places the Sileach process in the hydrometallurgical limelight,” Griffin said.

“We have demonstrated the ability to process complex lithium ores, without the requirement of the traditional and expensive roasting step.

“We now expect to generate similar ground-breaking results with the production of lithium carbonate from Pilbara Minerals’ Pilgangoora spodumene concentrates.”

As development of the Sileach process rolls on, LIT continues to acquire and assess lithium projects worldwide, actively reviewing opportunities in Europe, Africa, the Americas and Australia.

The company’s deal with Pilbara Minerals is central to advancement of the Sileach technology.

The two entities are working together to progress the Sileach technology for potential future production of low-cost lithium carbonate by processing materials sourced from Pilbara Minerals’ giant Pilgangoora deposit located near the currently proposed processing hub LIT hopes to establish 
near Port Hedland in Western Australia.

Still in WA, Lithium Australia, and collaborators Poseidon Nickel (ASX: POS) and Lefroy Exploration (ASX: LEX) recently identified known and possibly buried lithium-tantalum bearing pegmatites at Mt Day in the Lake Johnston projects.

Airborne geophysics data from infill airborne magnetic and radiometric completed in December 2016 defined five additional lithium prospects; Whitten, Bulldog, Boundary, Trackside, and Floyd.

All pegmatites have been interpreted to be lepidolite-rich with varying amounts of lithium-bearing zinnwaldite.

The geophysical survey also defined new exploration targets in the form of exposed and shallowly buried pegmatites.

A leap across the border landed LIT into the South Australian lithium exploration and development sector via lodgement of an application for ground prospective for lithium on Kangaroo Island.

The application resulted from research to expand the company’s domestic lithium holdings, which identified a prospective geological setting on Kangaroo Island, leading to Exploration Licence Application 2017/00005, located in the most favourable ground on the eastern side of the island.

“Our broadened nationwide search is intended to de-risk our lithium exploration portfolio by gaining exposure to multiple lithium opportunities across multiple state jurisdictions,” Griffin said.

“The area we have identified on Kangaroo Island is in the right geological environment, has past identification of the lithium mineral suite and has some historic pegmatite mining.”

Lithium Australia travelled further across the water than Kangaroo Island to strike a farm-in and Joint Venture deal on the Electra project in Mexico.

The Electra project encompasses the Tecolote, Tule, and Agua Fria concessions and LIT can earn up to 65 per cent of the project from its partner Alix Resources Corporation (TSX-V: AIX).

LIT is currently working towards lifting its 25 per cent equity to 49 per cent.

The exploration target on the Tecolote concession is lithium-bearing, clay-rich horizons similar to the adjoining Buenavista concession owned by Bacanora Minerals Ltd and Rare Earth Minerals PLC.

The target zone at Agua Fria consists of lithium clays with only small amounts of contamination by volcanogenic detritus and is shallow dipping, exposed over widths of up to 800m and over a strike length of approximately five kilometres.

Numerous surface samples have returned grades exceeding 1,000 parts per million lithium – grades considered to be high in samples of this provenance.

Twenty-four samples from shallow trenching of the mineralised zone at Agua Fria have been sent to Nevada for metallurgical testing to determine: Mineralogy; Lithium distribution and grade; Scope for beneficiation; By-product potential; and Grade of by-products.

“We’re making solid progress on the Agua Fria concessions and have now reached the key metallurgical testing stage,” Griffin said.

LIT also has plans to improve the sustainability of the industry and to that end has launched a recycling division to implement the recovery of lithium and other cathode metals, including cobalt from waste batteries.

The company has identified that as the market for power storage, particularly lithium ion batteries, reaches maturity, recycling will become a necessity.

Much of the driving force behind recycling is the value of cathode metals, in particular, for cobalt.

Current recycling does recover most of the base metals, but lithium recovery is close to zero.

“The reason such disparity exists is simply because of the preferred processing technology used by the companies undertaking the recycling,” Griffin said.

“This can be resolved through the implementation of improved processing options.”

“We want to look at evaluating a logistic chain from ‘cradle to grave’ to determine the deportment of all components of lithium-ion batteries and develop a strategy to maximise the recovery of all materials used in the products at the end of their useful life.”

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

HEAD OFFICE
Level 1,
675 Murray Street,
West Perth WA 6005

Ph: +61 8 6145 0288

Email: info@lithium-au.com
Web: www.lithium-au.com 

DIRECTORS
Adrian Griffin, Bryan Dixon, George Bauk

Rox Resources Ready to Grow, Ready to Drill

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THE INSIDE STORY: Rox Resources (ASX: RXL) was like a kid anticipating Christmas as it waited to receive a $20.6 million cash and receivables package for the sale of the company’s Reward zinc project in the Northern Territory.

Rox Resources signed the definitive Sale and Purchase Agreement with Teck Australia Pty Ltd in January, divesting its interest in the Reward project to Teck.

Rox completed the transaction in mid-February and is eager to get out on the ground as fast as it can to start up exploration on the rest of the company’s portfolio of prospective nickel and gold projects.

“Now we have that money we will be flying,” Rox Resources managing director Ian Mulholland told The Resources Roadhouse.

“The market is expecting us to get on with business and that is exactly what we intend to do.

“The sale of our interest in the Reward zinc project has been the biggest, and most important, transaction in the company’s history.

“It has clearly demonstrated to the market that we have a team that is capable of acquiring, developing, and monetising exploration projects to create value for our shareholders.

“The deal with Teck means that we are now fully-funded with a steady revenue stream for the foreseeable future and we are keen to make the most of the opportunity we have been given.”

Rox is eager to continue to advance its 100 per cent-owned Fisher East nickel project in Western Australia.

Mineral resources have been defined at Fisher East across the Camelwood, Cannonball and Musket deposits of 4.2 million tonnes at 1.9 percent nickel containing 78,000 tonnes of contained nickel.

The company has a program of RC drilling planned for the Horatio, Mt Tate, Cutlass, and Sabre North prospects.

Sabre is emerging as the ‘next big thing’ at Fisher East and Rox is also planning a round of diamond drilling to progress it towards the definition of a maiden resource.

To date, Sabre has only been subject to relatively shallow RC drilling, with a best intersection so far of 10 metres at 1.9 per cent nickel.

Most of the known EM conductor at Sabre has not been tested by deeper drilling.
 
“We already have targets identified at Fisher East but we have been waiting for the money to come in from Teck so we can hit that ground with a more extensive drilling program,” Mulholland said.

“We intend drilling out a Resource at Sabre and other prospects along the belt – Horatio and Mt Tate – where we have hit fresh sulphides in aircore drilling.

“The chances of doubling the Resource at Fisher East are very strong so instead of the current 78,000 tonnes we will be targeting around 150,000 tonnes of nickel.”

Rox has a total of $191,200 of Western Australia Government Exploration Incentive Scheme (EIS) funding available for drilling at Fisher East.

It was recently awarded a grant of $119,200 for deep drilling at the Camelwood prospect to go with a previously approved $72,000 EIS grant for drilling at the Sabre prospect.

Rox’s 100 per cent-acquisition of the Collurabbie nickel- gold-copper-PGE project in Western Australia is almost complete with Satisfaction of the Conditions Precedent for the acquisition to be finalised.

In anticipation, the company has an aircore drilling program planned.

The Collurabbie project tenements are situated just 70km due east of Rox’s Fisher East nickel sulphide and Mt Fisher gold projects, and there are clearly development synergies for both projects.

The Collurabbie project hosts the Olympia nickel sulphide deposit, where historical drilling returned results, including 5.8m at 3 per cent nickel, 2 per cent copper and 5.3 grams per tonne PGE.

Beside Olympia, Collurabbie hosts a number of strong prospects, such as Agora, Leros, Paros and Rhodes (East and West) where indications of mineralisation were identified by previous exploration, but never really received any substantial follow-up work.

“Collurabbie has been an ignored project for too many years,” Mulholland said.

“The project’s name is recognised by the industry, having had a fleeting moment of fame in 2004 when the Olympia deposit was discovered.

“Then when BHP Billiton took over WMC it all seemed to go to sleep and the project was put on hold and never looked at again with the same intensity.”

The historic work at Olympia identified it as a high-grade deposit, however due to the work being completed in 2004 it now needs to be brought up to 2012 JORC-compliancy.

Rox realises it has a way to go to calculate those Resources, but it does anticipate cataloguing an exploration target of around 10,000 to 15,000 tonnes of nickel at 2 to 2.4 nickel equivalent.

From what the company has seen to date it considers there to be high levels of copper and PGEs at Collurabbie and of a mineral enjoying a recent renaissance – cobalt.

“There is a whole belt at Collurabbie that hasn’t had anywhere near enough work carried out,” Mulholland said.

“Despite that, previous explorers did manage to identify some great targets, but the follow-up just hasn’t been there.”

The previous Collurabbie project drilling also demonstrated its potential to host gold mineralisation with several intercepts from the Naxos project showing positive signs, including:

2m at 5.2g/t gold from 30m
2m at 2.4g/t gold from 60m; and
2m at 2.47g/t gold from 70m.

Gold exploration carried out in the 1990’s focused on the northern part of the tenements, however there has been no further work since 2000.

Gold is the main commodity of the 100 per cent-owned 973,000 tonnes at 2.75g/t gold Mt Fisher gold project in Western Australia, which is now subject of a $10 million earn-in Joint Venture with Doray Minerals (ASX: DRM).

A heritage survey was completed covering the area of an aircore drilling program that Doray plans to commence during the first quarter of 2017.

With the Reward project sale more or less sewn up, Rox is now looking for buyers for its 51 per cent (Earning 70%) of the Bonya copper project in the Northern Territory.

“We are conducting a sale process at the moment, and there has been strong interest,” Mulholland explained.

“The Reward deal means that we will have a very healthy war chest and we will certainly be out there looking for new opportunities.

“Our business model is pretty simple – we ‘Acquire, Develop, Grow and Monetise’ Australian mineral exploration projects.

“The Reward project shows how this strategy works and demonstrates our ability to deliver results and create value for our shareholders.”

Rox Resources Limited (ASX: RXL)
…The Short Story

HEAD OFFICE
Level 1, 34 Colin Street
West Perth WA 6005

Ph: +61 8 9226 0044

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

DIRECTORS
Stephen Dennis, Ian Mulholland, Brett Dickson