Neometals Prepares for Life Beyond Mt Marion

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THE INSIDE STORY: A maiden shipment of lithium concentrates to China enables Neometals (ASX: NMT) to focus on downstream lithium processing in Kalgoorlie and fine tuning processing of titanium from its Barrambie project.

Neometals and Mt Marion lithium project partner Mineral Resources (ASX: MIN), recently completed the first shipment of lithium concentrates from Mt Marion lithium project to China.

The shipment of 15,000 tonnes of lithium concentrates was delivered to China’s leading lithium producer, and third member of the Mt Marion partnership, Ganfeng Lithium Co. Ltd.

The first production and shipment of lithium concentrate follows commissioning and continued ramp up of production from Mt Marion, which is forecast to produce 400,000 tonnes per annum at full capacity.

“The successful first shipment from Mt Marion is a great achievement for Neometals and our project partners,” Neometals managing director Chris Reed told The Resources Roadhouse.

“It has taken a lot of dedication and hard work to deliver a world class project in a fast tracked and cost effective manner from final investment decision to first shipment – all within 18 months.”

One important aspect of the shipment is that it starts a three-year period, after which Neometals and MinRes will regain 51 per cent production from Mt Marion.

To avoid wasting any time, Neometals and MinRes struck a Memorandum of Understanding in September last year, under which they will jointly assess development of a downstream lithium processing facility close to the Mt Marion lithium operation.

The favoured location for the development of a new direct hydroxide sulphate processing plant is near Kalgoorlie in the Eastern Goldfields region of Western Australia.

“The main idea behind the development of a domestic downstream processing facility is to eliminate the substantial bulk overseas shipping costs from the process,” Reed explained.

“We are investigating establishing a processing plant close to Kalgoorlie because it has a fortune of infrastructure – a gas pipeline, high voltage power, water and established roads, and sulphuric acid is manufactured in the area.

“Most importantly is the rail link to either of two ports – Kwinana or Fremantle – that we can ship our product through.”

Under the MoU, Neometals and MinRes will assess the technical and commercial feasibility of the construction and operation of a plant with nameplate capacity of 20,000 to 25,000 tonnes per annum of lithium carbonate equivalent production.

Instead of using its patented ELi process, the JV will instead use a conventional sulphate/caustic soda process that is commonly used by leading Chinese lithium converters, including Ganfeng.

The ELi process will continue to be utilised, but separately from arrangements under the MoU mostly for its application to traditional brines producers rather than spodumene/hard rock supply sources.

Elsewhere, Neometals has plans for its 100 per cent-owned Barrambie titanium project, which entail using a proprietary acid leach process to produce high purity titanium dioxide (TiO2), iron (III) oxide (Fe2O3), and vanadium pentoxide (V2O5).

Barrambie is one of the world’s highest grade titanium deposits, containing total Indicated and Inferred Mineral Resources of 47.2 million tonnes at 22.2 per cent TiO2, 0.63 per cent V2O5 and 46.7 per cent Fe2O3, at a cut‐off grade of 15 per cent TiO2.

A refurbishment of a laboratory and mini‐plant test facility in Montreal has been completed in preparation for a pilot study to be carried out on ore from the Barrambie project.

The laboratory facilities are at operational status, the mini‐plant has been refurbished and resumed operation on 12 December 2016 while the upgrade of the pilot facility is nearly complete.

“The mini‐plant operation results identified changes to the process that could deliver significant improvements to process economics and final product specification,” Reed said.

“We’ll have a closer look at these and hopefully be able to incorporate them into a revision of the PFS if they prove to deliver an improved project value.”

A full pilot plant evaluation of the proprietary hydrometallurgical technology is planned to commence in the second half of 2017 following the revised mini‐pilot plant optimisation testwork, after which Neometals will decide whether to start a Feasibility Study in 2018.

Neometal’s ultimate strategy is to advance the project to attract a titanium industry partner to fund and operate development of the Barrambie project on a shared equity or JV basis.

Neometals Ltd (ASX: NMT)
…The Short Story

HEAD OFFICE
Level 1, 672 Murray Street
West Perth WA 6005

Ph: +61 8 9322 1182

Web: www.neometals.com.au

DIRECTORS
Steven Cole, Christopher Reed, David Reed, Natalia Streltsova

Cassini Resources Hitches Prospects to One Tree Hill

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THE INSIDE STORY: One drill hole at One Tree Hill has strengthened Cassini Resources’ (ASX: CZI) belief in the exploration upside remaining in the company’s West Musgrave project in Western Australia.

The West Musgrave project (WMP) is subject to an Earn-in/ Joint Venture Agreement between Cassini Resources and OZ Minerals (ASX: OZL).

OZ Minerals can earn up to a 70 per cent interest in WMP by sole funding a minimum of $36 million on development and exploration, including completion of a Definitive Feasibility Study (DFS).

Cassini will remain as operator of the project until the DFS stage.

Recent activity under the JV involved the drilling of hole CZD0017 at the One Tree Hill prospect, located within the WMP about 13 kilometres southwest of the Babel deposit.

One Tree Hill first came to Cassini’s attention in 2015 when it undertook remodelling of down-hole electromagnetic (DHEM) data from historical drilling.

This resulted in the drilling of a previously poorly-defined EM conductor by hole CZD0008, which intersected two chalcopyrite-rich veins.

However, CZD0008 failed to intersect the original target and the existence of an off-hole conductor, with an extremely high modelled conductance, suggested the existence of pyrrhotite-rich massive sulphide mineralisation.

This conductor was the subject of the recent drilling, from which assay results have confirmed the discovery of magmatic copper-PGE-nickel mineralisation at One Tree Hill.

Drill hole CZD0017 returned:

34 metres at 1.05 per cent copper and 0.5g/t PGE (Pt+Pd) from 332m, including a massive sulphide zone of 3.2m at 2.16 per cent copper, 0.58 per cent nickel, 0.1 per cent cobalt and 1g/t PGE from 344.6m coinciding with the targeted DHEM plate.

The PGE and nickel concentrations intersected by hole CZD0017 have confirmed the presence of a magmatic style of mineralisation, which Cassini feels may be similar to mineralisation at the Succoth and Nebo-Babel deposits.

A collection of very strong indicators of a much larger mineralised system have emerged at One Tree Hill.

These include the apparent thickness of the gabbroic host intrusion being greater than 120m, PGE concentrations of 1g/t, and multiple broad zones of strong PGE anomalism in almost every hole drilled to date.

Cassini considers the results to show the prospect demands further testing by drilling and geophysics.

Although the nickel concentrations in the massive sulphides at One Tree Hill are low, Cassini is convinced the presence of higher grade nickel zones within a potentially much larger mineralised system are possible, as has previously been postulated for the Succoth deposit.

“These latest results from One Tree Hill build on the opportunity that is presenting itself out there,” Cassini Resources Managing Director Richard Bevan told The Resources Roadhouse.

“We now have a nickel development project with significant copper upside through the deposit at Succoth and early exploration success at One Tree Hill.

“One Tree Hill sits pretty much the same distance from Nebo-Babel to the southwest as Succoth is to the northeast and confirms that we are in a mining camp – we have now hit another mineralised system that has good copper and PGE grades and looks as though it could be part of something bigger.

“And it is very much under-explored – with no historic drilling between this drill hole and Nebo-Babel.”

Since being drilled, CZD0017 has been cased with PVC for a DHEM survey, which is anticipated to be carried out during the coming field season.

The DHEM survey will help the JV determine the orientation of any potential mineralisation, which currently appears to be open in most directions.

It will also expand the current DHEM coverage, which is limited to an approximate radius of 100m around CZD0008.

Geophysical reviews suggest the mineralisation in CZD0017 was not able to be detected from existing surface EM surveys and that it may extend beyond the range of the original CZD0008 DHEM survey.

“There has been some ground EM done previously, but we’re of the view that this hasn’t effectively explored the area as it hasn’t been able to identify these sulphide zones at depth,” Bevan explained.

“We believe One Tree Hill could be a significant discovery, because it confirms the prospectivity of an entire 40-kilometre corridor that we have identified.

“It warrants further exploration and drilling and adds value to the project

“Potentially it could be another nickel-copper-sulphide deposit to go with the three deposits we have already identified.”

While all this has been happening, the JV has been undertaking work to advance the Further Scoping Study (FSS) being carried out on the Nebo-Babel deposit.

Resource extension drilling is about to commence on several targets at Nebo-Babel considered most likely to provide an increase to the size of the existing high-grade domains within the deposits.

The aim is to find additional high-grade tonnes that would be mined early in the potential mine plan.

These targets include massive sulphide zones at Nebo, extensions to the Startmeup Shoot at Babel and definition of the roll-over zone at Babel.

“We consider all the targets we have identified to have significant potential to impact project economics if further high-grade mineralisation can be found,” Bevan said.

“Once we have a better understanding of these high-grade domains, in terms of the dip and strike extents, and variations in geometry and grade, then we will be able to plan the appropriate infill drilling that will be required during the PFS for the purposes of ore reserves.

“Additional drilling and a better understanding of the grade variations may also reduce several metallurgical test samples that will be required during the PFS.”

Beyond the WMP, Cassini is exploring for gold at the company’s 100 per cent-owned Mount Squires project.

Previous explorers identified several gold prospects with efforts leading to the discovery of gold mineralisation at the Handpump prospect, returning intercepts of:

15m at 2.3g/t gold from 31m, including 5m at 4.7g/t gold from 34m; and
12m at 1.3g/t gold, including 5m at 2g/t gold from 25m.

Exploration after the initial discovery was limited with only 26 RC holes at this prospect, however, mineralisation remains open in most directions.

Although still in the early stages of exploration, Cassin sees economic potential at Mount Squires through the thickness and tenor of its gold mineralisation.

“We consolidated the Mt Squires landholding last year by picking up some surrounding land we considered could be prospective for gold,” Bevan said.

“The benefit of gold exploration for Cassini – whilst we’re in the JV with OZ Minerals – is that we are out there conducting some exploration in our own right.

“It’s good that we are not just concentrating on the nickel and copper assets – we now have some diversity amongst the commodities we’re developing.

“We are reasonably confident that we can go out there, drill some holes and find not just an isolated prospect, but a new gold frontier.”

Cassini is preparing work programs for the Handpump prospect to be undertaken upon receipt of heritage and environmental approvals.

The company considers step-out and infill RC drilling is warranted at Handpump to determine the extent of mineralisation and controlling structures.

“Some of that previous drilling was carried out because there was some outcrop to investigate, but we feel there is potentially more prospective structures under cover and yet to be drilled,” Bevan said.


Cassini Resources Limited (CZI)
…The Short Story


HEAD OFFICE
10 Richardson Street
West Perth WA 6005

Phone: +61 8 6164 8900

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


DIRECTORS
Mike Young, Richard Bevan, Dr Jon Hronsky, Phil Warren, Greg Miles

Global Exploration Trends Set to Improve

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CONFERENCE CALLER: CSA Global’s manager of exploration Marcus Willson proved to be the antithesis to the buoyant mood at the RIU Explorers Conference in Fremantle, By Jacinta Payne

Willson took his audience on a trip down memory lane of the recent industry downturn presenting delegates with some stark realities of current exploration trends.

The world of exploration has looked gloomy since the 2008 crash, especially since the 2012 resurgence.

“In the words of George Harrison, ‘it’s been a long cold lonely winter’ ever since peak exploration in 2012,” Willson opened with.

After the 2008 global financial crisis, the sector steadily recovered with metals prices and market capital increasing.

“In 2010, on the back of stimulus led investment we saw a short-term return to investment and exploration through to 2012,” he continued.

The audience was looking for some optimism from Willson’s presentation as he went on to explain that since 2012 there has been a steady decline in market capitalisation as commodity prices have fallen.

“Of course, exploration budgets in the industry are strongly constrained by the metal prices,” he said.

Global spending on exploration for 2016 sat around $7 billion, although this number has risen in recent years, it is still half the pre-GFC levels of spending that resulted in around $14 billion spent on exploration.

“Access to financings has huge impact on a company’s ability to carry out exploration, particularly in the junior and mid-tier sectors,” Willson explained.

“I suggest this is a shift out of risk into more advanced projects.”

Of the $7 billion invested in exploration activities in 2016, nearly half was spent on chasing gold.
Given that particular commodity has been credited with providing the base from which the recent upward movement in the resources sector, it’s no surprise to learn that number continues to increase.

“Between base metals and gold we account for nearly three quarters of the global exploration budget,” Willson explained.

Steel, uranium and coal projects are in decline, while demand for battery metals are starting to rise.

Discovery costs are rising, and rates of discovery are falling. What does this mean for the future?

“We must be smarter in our exploration efforts and integrate science and technology,” said Willson.

“It is clear that we need access to greater funding to ensure the future of the exploration business.”

Data from the ASX says between 2014 to 2016 there was an average of eight successful resource IPO’s funded for each year. One month into 2017 and that number is already six.

“Estimating forward perhaps 2017 will see an order of magnitude improvement in funding for exploration,” he said.

“Perhaps the sun really is coming out again, and long may it shine.”

2017: Making Mining Great Again

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THE CONFERENCE CALLER: The overall sentiment on the first day of the RIU Exploration Conference 2017 in Fremantle was positive with delegates reflecting the current shift in market sentiment. By Jacinta Payne

That shift, according to Patersons Securities head of research Rob Brierly, is a positive one, with the cyclic nature of the resources market broadly starting to look up again.

Brierley told the largest opening day crowd the Explorers Conference in the past few years that the sector has started off strong in 2017. 

The last five years hit smaller resource companies harder than the larger companies at the big end of town.

Brierley said he is hopeful for 2017, which has already shown a, “remarkable comeback,” with junior resource companies is starting to outperform larger resource.

Commodities are contributing to the rise in confidence – in particular iron ore, which has staged a recovery of late to be sitting at US$87 the night before the conference.

Not too bad considering its position at the same time last year was a price of US$51 per tonne.

“(This graph) highlights the unpredictability of the commodity price, and that we are really hostage to a large consumer, and that consumer is China,” Brierley said.

Following Brierly to the podium, ANZ senior commodity economist Daniel Hynes said stabilisation in the Chinese market has led to a broad recovery of the global market.

He said there has been a boost to housing and infrastructure in China, from which steel made a positive shift in 2016.

Brierley said gold has, “lost its lustre”, over the last twelve months, but figures show gold is at US$1236 per ounce up from US$1222 per ounce last year, after a decline in late 2016.

Hynes expressed concerns over the United States beginning to implement US preference policies and the potential for a global trade war and price drops.

Base metals are recovering, but are still lagging in the 10-year outlook, however, Brierley predicts a potential copper deficit coming, “sooner than people think,” despite BHP Billiton’s expectation for balance until 2020.

Hynes also predicts a copper deficit in the near future, with disruptions in the production lines causing inventories to be relatively low.

The market may be starting to look up, but things still look shaky in the 5B submissions.

A little over half the 606 ASX-listed resources companies reporting held less than $1 million net cash as of end of December 2016, with less than 10 per cent reporting more than $10 million.

“I don’t know what they intend to do with less than a million dollars, but it’s not going to be a lot,” Brierley said.

“Everybody knows that exploration costs money. Its risk capital and it needs to be spent, otherwise a company will remain dormant.”

There is optimism in the air, with many conference delegates agreeing this year’s conference to be is busier and more positive than last year.

Cassini Resources managing director Richard Bevan told The Resources Roadhouse he thought the conference is busier and more, “buoyant”, than last year.

Blackham Resources managing director Bryan Dixon said he was happy there is more activity and funding back in the gold sector.

“The general market has been in fear mode for quite a while and people are back looking for opportunities again,” Dixon said.

Conference organizer, Vertical Events managing director Stewart McDonald was pleased with the turn out.

“Attendance is probably up by 20 per cent in terms of numbers, but up by a million percent in terms of attitude,” he said.

“Everyone’s positive.

“Last year was okay, because they’d just been through 2015 which was very, very bad.

“But this year is unbelievable.

“The value for these companies in attending and presenting at the conference is in outcome promotion.
“Being at the conference is more than a company simply advertising, here they are actually talking to people who are interested in learning about their projects and who can help them bring them to fruition.”

2017 Craig Oliver Award

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CONFERENCE CALLER: The winner of the Craig Oliver Award was revealed on the opening morning of the RIU Explorers Conference in Fremantle.

The award is in memory of Craig Oliver who was killed, along with other Sundance Resources Board members in a plane crash in the Congo in 2010.

It is presented to an ‘all round’ small to mid-cap company deemed to have excelled in areas including exploration, mining, corporate, market results, environmental and community over the previous 12-month period.

Previous winners include:

2011 – Independence Group;
2012 – Silver Lake Resources;
2013 – Sirius Resources;
2014 – Northern Star Resources;
2015 – Doray minerals; and
2016 – Metals X.

Nominees for the 2017 award were: 

Capricorn Metals;
Capricorn is advancing the Karlawinda Gold Project in Western Australia. 

Kidman Resources;
Kidman is chasing lithium and gold with its prime target being the Earl Grey prospect. One of its emerging gold prospects is Blue Vein, where high-grade hits have been encountered below a historic open pit.

Dacian Gold;
Dacian became a doyen of gold mining in Western Australia with its advanced blueprint for the Mt Morgans project.

Western Areas;
Western Areas was behind the creation of the Craig Oliver Award as Craig had been a well-regarded Director of the company.

Western Areas had excluded itself from being considered in previous years, however judges decided the ongoing performance of the company warranted a nomination.

Evolution Mining;
Evolution won the Diggers Award at Diggers & Dealers in 2016 and recorded a net profit for the 2016 December Half of $136.3 million.

Craig Oliver’s wife Shanelle remembered him as, “a man of vision, enthusiasm and determination.”

“His legacy should be an inspiration for junior miners and explorers,” she said.

She presented the award to Evolution Mining vice president business development Aaron Colleran.

“One of the things we don’t do well as an industry is stop and celebrate success,” Colleran said when accepting the award.

“We should celebrate our success more – we are amongst the smartest, most efficient miners in the world – there is a lot to celebrate.

“We’re too often bogged down in the day-to-day issues dealing with problems thrown at us by mother nature.

“Evolution has had a great few years, not because of our mines, but because of our people.

“We have a workforce committed to our core set of values of safety, accountability, excellence, and respect embedded across the organisation.”

Impact Minerals Ready For More Drilling Success in 2017

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TH EINSIDE STORY: Impact Minerals (ASX: IPT) closed 2016 with a cliff-hanging conclusion to a drilling program on the Silica Hill gold-silver discovery within the company’s 100 per cent-owned Commonwealth gold-silver-base metal project.

The Commonwealth project comprises three 100 per cent-owned exploration licences covering about 315 square kilometres of the highly-prospective Lachlan Fold Belt north of Orange in New South Wales, which is host to many major gold-silver-copper mines.

Impact Minerals left the market in a similar predicament to loyal audiences of television programs that end their summers by burning down the local café leaving viewers to wait until the New Year to learn the fortunes of their favourite stars.

Just before Christmas, Impact announced it had extended the sulphide mineralisation at the Silica Hill discovery by up to 50 metres down dip/plunge in the first two diamond drill holes completed as part of a follow up drill program.

The company signed off by telling us that assay results were not available and that we would have to wait, like the television audience, for their anticipated release date of around late January to mid-February.

Adding spice to the mixture, Impact informed us of the encouraging nature of the mineralisation it had encountered at Silica Hill, which comprises promising multiple narrow stockwork-style veins and veinlets together with disseminated sulphides in the rock surrounding the veins.

Everything being what an exploration play would want to see at the early stages of a discovery.

Readings with a portable XRF instrument on both holes (CMIPT048 and CMIPT049) provided further encouragement by indicating the presence of silver mineralisation over 100 grams per tonne occurring in many places both in the veins and the surrounding rock.

“The drilling we completed last year showed us the mineralisation seems to be at least as thick as what we had encountered in the discovery holes and appears to be hosting the right sort of mineralisation we would hope to see,” Impact Minerals managing director Dr Mike Jones told The Resources Roadhouse.

“These two holes have taken the total number of holes to have intersected visually significant mineralisation at Silica Hill to six drill holes so far, over an area of 200 metres by 100 metres down to a depth of 120 metres below surface and with an average true thickness of between 50 metres and 70 metres.”

It’s little wonder the market should be intrigued by developments at Silica Hill, given the short history of outstanding drill results the deposit has produced.

The silver mineralisation zone at Silica Hill strikes north east and dips steeply to the south east and, of note, appears to improve in grade as it gets deeper.

The mineralisation remains open in all directions including up-dip and is terminated by a fault, which Impact has interpreted to suggest further mineralisation may have been offset.

Impact’s eagerness to fast-track follow-up drilling at Silica Hill stemmed from results from the four previous drill holes (CMIPT046, CMIPT026, CMIPT043, and CMIPT011), which all returned significant intercepts on two sections.

Most notably was drill hole CMIPT046, drilled beneath Hole CMIPT026, which returned high-grade gold and very high-grade silver over a 41m thick intercept within a 74m thick zone of gold-silver mineralisation.

Key intercepts include:

74.5 metres at 1.2 grams per tonne t gold and 106g/t silver (2.9g/t gold equivalent) from 61 metres, including 41.3m at 2g/t gold and 176g/t silver (4.7g/t gold equivalent) from 61m, including 16.3m at 3.7g/t gold and 246g/t silver (7.6g/t gold equivalent) from 86m.

“The previous results we had achieved at Silica Hill demanded we follow them up in quick fashion, which we did,” Jones said.

“The follow-up program was designed to test for extensions to this mineralisation as well as further depth extensions to the Commonwealth deposit centred about 200 metres south west of Silica Hill.

“The earlier drilling demonstrated we had discovered high-grade gold associated with the very high-grade and bonanza grade silver veins that are clearly widespread across the prospect.

“The gold zone has already been shown to be twice as thick and almost twice the grade of the zone in the first two significant drill holes.”

Drilling at Silica Hill took a break over the Festive Season while Impact awaited statutory approvals to be granted for some of the drill holes.

Once these have been received, the company will be looking forward to delivering more news on further developments from Silica Hill.

Drilling will be keeping Impact Minerals occupied for a good part of 2017, as the company spends two Western Australia Government Exploration Incentive Scheme grants, totalling $300,000, on its 100 per cent-owned Mulga Tank gold and nickel project east of Kalgoorlie.

This will be supplemented by a recent refund of $1.07 million the company received from the Australian Tax Office for expenditure on research and development in the 2016 financial year.

The Mulga Tank project has been on Impact’s radar since it discovered high-tenor nickel and copper sulphides at the Mulga Tank Dunite during a maiden drill program in 2013.

Work carried out to date has identified three styles of nickel-copper mineralisation at Mulga Tank:

1. Extensive disseminated nickel in the Mulga Tank Dunite with assays of: 2m at 1.3 per cent nickel, including 1m at 2 per cent nickel and multiple 0.5m thick zones of 0.5 per cent to 1.2 per cent nickel within an intercept of 115m at 0.3 per cent nickel; Other thick intercepts include 21m at 0.4 per cent nickel and 59m at 0.3 per cent nickel.

2. High tenor veins at the base of the Mulga Tank Dunite with assays of: 0.25m at 3.8 per cent nickel, 0.7 per cent copper and 0.7g/t platinum group elements (PGE) and 0.3m at 0.7 per cent nickel; and

3. High tenor nickel sulphide in multiple komatiites in a flow channel in the upper part of the dunite with assays of: 0.75m at 0.85 per cent nickel, 0.35 per cent copper and 0.28g/t PGE (Pt+Pd+Au); and 6.7m at 0.5 per cent nickel.

“The style of mineralisation and the nature of the rocks we have seen at Mulga Tank immediately raised interest, mainly due to their similarity to those that host the large nickel deposits at Perseverance and Mt Keith,” Jones said.

“We collected around 2,500 soil samples at Mulga Tank back in 2015, which we have sent to be analysed using the ionic leach method at ALS Laboratories in Perth.

“An interpretation of the data is in progress and once that is complete we will use that to identify specific targets for our drilling program, which we expect to have underway by the middle of the year.”

Impact has identified the geological terrain hosting the Mulga Tank project to be the same as that hosting Gold Road Resources’ (ASX: GOR) Gruyere deposit of more than 5 million ounces of gold.

As Gruyere was before it came to prominence, Mulga Tank has been poorly explored for gold and Impact intends to make this a focus of the upcoming drilling.

Impact Minerals (ASX: IPT)
…The short story

HEAD OFFICE
26 Richardson Street
West Perth WA 6005

Ph: +61 (8) 6454 6666

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

DIRECTORS
Peter Unsworth, Dr Mike Jones, Paul Ingram, Markus Elsasser, Felicity Gooding.

Gold Road Resources Gets Back to Exploration Basics in 2017

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THE INSIDE STORY: Gold Road Resources is proving that although time is, by nature, an abstract concept, it is also a valuable commodity and the more you have on your side the better.

Gold Road Resources (ASX: GOR) struck the 50:50 Gruyere Joint Venture (GJV) deal in 2016 with an Australian arm of international gold producer Gold Fields Ltd.

The company completed a Feasibility Study for the development of the 6.2-million-ounce Gruyere gold project in October 2016, just before signing the JV agreement with Gold Fields.

The Feasibility Study confirmed the Gruyere gold project to be one of the longest life, lowest cost, undeveloped gold deposits in the world, supporting average annualised gold production of 270,000 ounces over life-of-mine of 13 years.

On the strength of the Feasibility Study, the Gold Road Board recommended progressing Gruyere to construction, opting to develop through establishing the Gruyere JV with Gold Fields.

The deal is worth, in monetary terms, around $350 million, but just as importantly it has delivered Gold Road the time to spend that money wisely by advancing other projects and prospects it has identified on the Yamarna Greenstone Belt in Western Australia.

“As soon as we discovered Gruyere we decided right there and then to explore it with development in mind leading to construction,” Gold Road executive director – exploration and growth Justin Osborne told The Resources Roadhouse.

“We’re doing that now, it’s just that we have a world-class gold miner building the project for us.

“That allows us to explore far more rapidly and aggressively than we would ever have been able to contemplate had we paid for the construction of the mine ourselves.

“It has basically moved us ahead four years – we would not have been at this point until around 2020-21 until after we had paid off all the bank debt.”

Under the terms of the JV deal, Gold Road received $250 million in December 2016, part of which has been swiftly allocated across its exploration timetable.

The company has allocated $12 to 15 million for exploration across the 100 per cent‐owned North Yamarna tenements.

Over $5 million has been earmarked for exploration across the Gruyere JV  tenements, with Gold Fields contributing an equal amount.

A further $1.5 to 2 million will be spent on exploring the South Yamarna JV tenements held 50:50 with Sumitomo Metal Mining Oceania Pty Limited, with Sumitomo also contributing an equal amount.

Simple mathematics brings total expenditure across North Yamarna, Gruyere JV and South Yamarna JV tenements for 2017 for Gold Road to around $22 million, with the provisional total spend including contribution from both JV partners across the Yamarna Belt hitting $30 million.

“A big part of that budget will be focused on bedrock drill testing anomalies and targets we have identified over the past three years outside of the Gruyere deposit,” Osborne said.

“We have spent a lot of time and effort gaining some understanding of the other Camp Scale Targets – particularly at Corkwood in the north and at Wanderrie.

“The big focus now is to get drilling into the bedrock associated with these anomalies, see what is causing them, and hopefully make some more discoveries.”

The upcoming work is off the back of a strong exploration performance in 2016 across the company’s tenement package, which included an update to the Ore Reserve for the Gruyere Gold Project to 91.6 million tonnes at 1.2 grams per tonne gold for 3.52 million ounces of contained gold, including 14.9 million tonnes at 1.09 grams per tonne gold for 0.52 million ounces in the Proved category.

Other news from the Gruyere JV included exciting high‐grade results from 4 metre composite aircore samples received from YAM14 in the South Dorothy Hills Camp Scale Target (Camp #1) within the Gruyere JV tenements.

The results included

16DHAC0665 
8m at 6.8g/t gold from 32m, including 4m at 12.11g/t gold from 32m; and

16DHAC0666
17m at 2.61g/t gold from 96m.

The company considers these results indicate the potential to double the strike length of the deposit with further drilling.

RC drilling conducted on the North Yamarna tenements returned assay results from the Ibanez prospect within the Pacific Dunes‐Corkwood Camp Scale Target (Camp #3) and the Santana and Satriani prospects within the Sun River‐Wanderrie Camp Scale Target (Camp #4).

The drilling confirmed the continuation of high‐grade bed rock mineralisation at:

Ibanez
16CWRC0024
19m at 2.52g/t gold from 94m, including 3m at 13.41g/t gold; and

Santana
16TARC0012
8m at 3.12g/t gold from 234m, including 2m at 8.24g/t gold.

Assay results from RC and aircore drilling programmes completed on the Riviera‐ Smokebush Camp Scale Target (Camp #5) within the South Yamarna JV tenements were highlighted by high‐grade RC results at the Smokebush prospect, which returned a best intersection of:

16SYRC0087
19m at 3.17g/t gold from 55m, including 2m a 8.76g/t gold.

Exploration-wise 2017 is shaping up as a big year for Gold Road, as the company gets back into doing what it does best – exploring for new gold discoveries.

The year’s exploration activities are scheduled to kick off in March with the programmes planned for the year doubling the company’s efforts for 2016.

On the North Yamarna tenements infill aircore drill testing will take place within the South Dorothy Hills Regional (Camp #1), testing the southern extension of the Dorothy Hills Shear Zone at Monteith. 

Full field aircore programmes will be conducted over the newly named Hopwood Camp Scale Target testing a 25 kilometre strike length of the Dorothy Hill Shear Zone south of Monteith and at Corkwood South, the southern half of the Pacific Dunes‐Corkwood Camp Scale target.

At Sun River‐Wanderrie (Camp #4) a follow-up programme of aircore drilling will focus on the Gilmour and Morello Targets, while the recent high-grade bedrock mineralisation encountered at the Santana prospect will be tested by follow‐up RC drilling.

Pacific Dunes‐Corkwood (Camp #3) will see more infill and extensional RC and diamond drilling this time following the high-grade bedrock mineralisation achieved at the Ibanez prospect. Infill aircore programmes have been planned to test and progress the Stratocaster and Mesaboogie targets.

Gruyere won’t miss out with deep diamond drill testing the underground potential of the down‐plunge extension.

Priority RC testing will be carried out on the northern mineralisation extension to YAM14.

Riviera‐Smokebush (Camp #5), within the South Yamarna JV tenements will undergo RC follow‐up of an aircore anomalism at the Riviera Target as will the Kingston North and Yaffler South Targets at Breelya‐Toppin Hill (Camp #2), while first pass aircore drilling will test the Mt Carlon Target.

“We’ve got quite a bit of work to follow up at South Yamarna and some first-class drilling targets to focus on throughout the year,” Gold Road Exploration Manager, Clayton Davy’s explained.

“The Gruyere JV will be a mixture of deep testing activity at Gruyere to identify that we really do have an underground position there.

“We need to confirm that and we want to get that done before the mine infrastructure gets put in place.

“Other work will focus on the potential satellite feed deposits, such as YAM14 and bringing them to the stage where we can do some more Resource work and get Reserves generated on them and look for extensions at depth – potential underground positions.”

Gold Road Resources (ASX: GOR)
…The Short Story

HEAD OFFICE
Level 2
26 Colin Street
West Perth WA 6005

Ph: +61 8 9200 1600

Email: perth@goldroad.com.au

Website: www.goldroad.com.au

DIRECTORS
Tim Netscher, Ian Murray, Justin Osborne, Martin Pyle, Sharon Warburton

Peel Mining adds New Mineralisation to its Cobar Projects

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THE INSIDE STORY: Peel Mining has continued to deliver consistent drill results from the company’s Wagga Tank and Cobar Superbasin projects, both located near Cobar in New South Wales.

The company is rapidly advancing the Wagga Tank and Cobar Superbasin projects while it draws up plans to update the current Mineral Resources at its flagship Mallee Bull copper-polymetallic deposit.

The Cobar Superbasin project is subject to a Memorandum of Agreement with Japan Oil, Gas, and Metals National Corporation (JOGMEC).

JOGMEC may earn up to 50 per cent interest by funding up to $7 million of exploration

Stage 1 expenditure commitments totalling $4 million were concluded in the September 2016 quarter, taking JOGMEC’s interest in the project to 40 per cent.

JOGMEC has commenced its Stage 2 commitments working towards an additional 10 per cent interest through the spending of a further $3 million, with activities recommencing in mid-January at the Wirlong prospect.

Wagga Tank is located on the western edge of the Cobar Superbasin, approximately 130 kilometres south of Cobar and around 45km southwest of the company’s Mallee Bull polymetallic discovery.

Wagga Tank is another Cobar-style polymetallic VHMS-type deposit where the presence of high-grade base and precious metal mineralisation was originally identified in the 1970s and 80s.

The project was subjected to substantial historical drilling, the last of which was conducted in 1989 that returned several significant drill intercepts.

Prior to Christmas, Peel undertook an initial drilling program at Wagga Tank, which was designed to confirm the presence of the high-grade intersections identified in the historic data.

The program consisted of eighteen RC drill holes, a number that may seem low at first, however their strike rate has been extremely high with many ending in mineralisation to the point where five were extended by diamond tail drilling and a further seven requiring extensions.

Subsequently Peel was able to do what the program was designed to – confirm the presence of high-grade zinc-lead-silver and gold-copper mineralisation at Wagga Tank, with latest results including:

WTRC003 (pXRF results, assays pending)
11m at 11.7 per cent zinc, 6.5 per cent lead, 67 grams per tonne silver, 0.3 per cent copper from 253m;

WTRCDD004
15m at 8.49 per cent zinc, 4.11 per cent lead, 114g/t silver, 1.57g/t gold, 0.31 per cent copper from 280m;

WTRC011
7m at 3.15 g/t gold, 1.1 per cent copper from 190m;

WTRC013
17m at 2.65 g/t gold, 0.54 per cent copper, 11 g/t silver from 211m (to end of hole), including 9m at 4.30 g/t gold, 0.72 per cent copper, 14 g/t silver from 211m; and

WTRCDD016
6.5m at 4.9 per cent zinc, 1.79 per cent lead, 22 g/t silver, 0.21 g/t gold from 330m;

“The focus at this stage remains very much centred on the Wagga Tank project,” Peel Mining managing director Rob Tyson told The Resources Roadhouse.

“The recent drilling results confirmed for us that Wagga Tank is what we thought originally it could be, perhaps more.

“The historic data certainly indicated some very high-grade mineralisation and we are learning more and more about the system as we go.

“It certainly is a large system –  we have encountered broad zones of alteration and mineralisation over 100 metres wide, but within that there are higher grade zones that are obviously of interest to us.

“That’s our focus initially – to chase the higher grades.”

Not to be outdone, Peel Mining’s other Cobar Superbasin target, the Wirlong prospect also returned extremely encouraging new near surface intercepts from a program designed to test for potential oxide/supergene copper mineralisation.

The Wirlong prospect is also developing into being a large, mineralised, hydrothermal system with a currently defined strike length of more than 2.5km.

Exploration carried out under the MoU has confirmed the area also hosts substantial high-grade copper mineralisation, which remains open both up- and down-dip and along strike.

A program of drilling recently completed at Wirlong, was designed to test for potential oxide/supergene copper mineralisation.

The drilling returned several new near surface intercepts from eight RC drill holes that were drilled to test up-dip from previously encountered mineralisation covering a strike extent of approximately 250m.

Importantly, all drill holes in this program intersected mineralisation.

Highlights from the latest round of drilling at Wirlong include:

WLRC035
8m at 3.63 per cent copper, 20g/t silver from 71m;

WLRC033
7m at 1.07 per cent copper, 4g/t silver from 99m;

WLRC034
6m at 0.97 per cent copper, 3g/t silver from 117m and 5m at 0.84 per cent copper, 4g/t silver from 144m; and

WLRC032
10m at 0.64 per cent copper, 3g/t silver from 106m.

Deeper drilling at Wirlong, designed to test for extensions to previously reported significant copper mineralisation, recommenced following the Christmas/New Year break.

The planned RC/diamond holes will focus on extending the known mineralisation as well as targeting potential higher grade structures.

“At the moment, most of our drilling is reasonably shallow by Cobar standards” Tyson said.

“The deepest hole also returned the highest-grade mineralisation, however we now have mineralisation defined over at least 250 metres strike and from near surface to approximately 500 metres below surface.”

Although there is a lot of effort being applied to Wagga Tank and Wirlong, Peel has not taken its eye of its main project, the Mallee Bull copper-silver-gold project – a 50:50 Joint Venture with CBH Resources.

A maiden JORC compliant Mineral Resource estimate for Mallee Bull was completed in May 2014, coming in at: 3.9 million tonnes at 2.3 per cent copper, 32g/t silver and 0.3g/t gold for 90,000 tonnes of contained copper, 4 million ounces contained silver and 43,000 ounces contained gold.

The Mallee Bull JV program of work to be carried out during the year is expected to commence some pre-development activity with the objective being bolster the current mineral Resource.

“We published that resource estimate coming up three years ago, and since then we have achieved considerable success in terms of drilling extensional and additional mineralisation,” Tyson explained.

“We hope to be able to quantify that achievement and demonstrate to the market how busy and successful we have been.

“If we can do that and continue to return the sort of results from Wirlong and Wagga Tank that we have been, then that will underline the fact there is real substance to the company and that we have moved along way from being a greenfields exploration play.”

Peel Mining Ltd. (ASX: PEX)
… The Short Story

HEAD OFFICE
Unit 1
34 Kings Park Road
West Perth WA 6005

Ph: (08) 9382 3955

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

DIRECTORS
Rob Tyson, Simon Hadfield, Graham Hardie

Caesium: Lithium’s little brother with big potential

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COMMODITY CAPERS: Some may consider it this to be an extremely tenuous connection, but the recent lithium bubble possesses a startlingly similarity to the whaling industry of old.

A prized find when opening up a whale in the olden days would be the discovery of ambergris, a solid, waxy, substance produced in the digestive system of sperm whales, which was highly-valued by perfumers as a fixative that allowed a scent to last much longer.

The present day mineralogical equivalent of ambergris may be, for lithium explorers, a discovery of caesium-hosting pollucite as they harpoon their lithium pegmatite-populated tenements with drill rigs.

Pollucite is a rare mineral of caesium that forms only in extremely differentiated zones of rare-metal lithium-caesium-tantalum (LCT) pegmatite systems.

Caesium Formate, the main down-stream product of pollucite, is a high-density fluid that looks very much like water, possessing the same viscosity, but is much denser.

It is mostly commonly used in high-temperature/high-pressure drilling by the oil & gas industry in the form of caesium formate brine as it reduces oil well intervention risks while also maximising production life and durability of the well.

For the scientifically minded among us – caesium formate brine is generally formulated with acid-soluble calcium carbonate particles and formation-friendly polymers to make low-solids drilling fluids, which can also be used as lower completion and screen-running fluids.

Breaking it down to more simpler terms – caesium formate provides well-documented benefits such as minimal damage to the hydrocarbon-bearing formation resulting in higher production rates.

It acts as a lubricant, is non-corrosive and is considered a benign chemical when compared to alternatives.

At present, the main producers of caesium are the Tanco mine owned and operated by Cabot Corporation in Canada and the Bikita Mine in Zimbabwe.

The Tanco mine is an underground caesium and tantalum mine, located on the north west shore of Bernic Lake in Manitoba, which Cabot claims to host the largest known deposit of pollucite, making it the world’s largest producer of caesium.

Although it is most commonly used in oil & gas drilling, Cabot says caesium formate brine has been successfully field proven in over 350 applications.

“It has been used successfully in high-pressure high-temperature (HPHT) fields at temperatures as high as 235°C/455°F and pressures up to 1,126 bar/16,331 psi with no fluid-related well control incidents ever,” Cabot claims on its web site.

“Its unique properties deliver a number of benefits, which make it ideally suited for clear-brine applications.”

According to Cabot, high-density caesium formate brine has been used as a completion fluid in hundreds of wells globally.

The company references a 2015 study by well engineering consultancy Ridge AS of 89 North Sea wells, which concluded that, “formate fluids outperform other fluids to deliver significant rig-time savings for both openhole and cased and perforated completions by enabling more time-efficient solutions”.

“With its high thermal stability and ability to protect downhole metals against corrosion, caesium formate brine is exemplary for well suspensions, even in HPHT environments,” Cabot states.

“It has been used in numerous operations worldwide at temperatures up to 235°C/455°F, including suspensions of 15 months’ duration with no adverse effects on downhole metals.”

The capability of high-density caesium formate brine to create hydrostatic pressure provides it with the ability to lower differential pressure across sealing elements and on wellbores and casings to prevent collapse while also protecting metals from corrosion.

“Formate brines have been used as packer fluids in numerous wells from the Gulf of Mexico to the North Sea, including one documented case of formate brine left downhole for six years under pressures of 965 bar/14,000 psi and temperatures of 177°C/350°F,” Cabot explains.

“When the production string was finally pulled from the hole it was in excellent condition – even the identification markings on the pipe were intact.”

Hoping to join the ranks of global caesium producers is Western Australia-based lithium exploration play Pioneer Resources (ASX: PIO), which has encountered what it considers to be potentially economic pollucite mineralisation at the company’s Pioneer Dome lithium-caesium project, located in the Goldfields region of Western Australia.

Drilling carried out by Pioneer in 2016 returned an intersection of 6m of high-grade caesium grading 27.7 per cent caesium oxide (Cs2O) from 47m, which at the time the company said was likely to be in the form of pollucite.

“Drill intersections of this grade and width are extremely rare; a literature search has identified less than five occurrences globally where caesium occurs at this grade and down-hole width,” Pioneer said at the time.

This was followed up late in the year with a further strongly mineralised caesium intersection, of 7m at 16.2 per cent Cs2O from 47m and 6m of 1.65 per cent lithium oxide (Li2O) from 56m, which Pioneer declared to and confirm an extension to the pollucite mineralisation encountered by the initial discovery hole.

Pioneer completed nine drill holes displaying visual evidence of having intersected the lens of high-value caesium mineralisation – considered most likely to be pollucite – over a strike length of approximately 60m.

Mineralisation remains open to the south, trending into an area where Pioneer considers additional caesium geochemistry anomalies to be present.

“The Pioneer Dome joins the ranks of a small group of extraordinarily differentiated pegmatite systems in the world,” Pioneer Resources managing director David Crook told The Resources Roadhouse.

“Pollucite is currently only found in significant amounts in three places in the world – that we know of – Tanco, Bikita, and now the Pioneer Dome.”

The Caesium Formate market is quite unique – so much so that it is difficult to get a complete handle on pricing, however there is some thought that a price of around $25,000 per tonne is not out of the question.

That makes the caesium market an extremely boutique market that could be very profitable for an exploration company looking to fund future activities.

Should Pioneer be able to work up a modest Resource of say, around 10,000 tonnes of high-grade pollucite, which could yield upwards of 3,000t of Caesium Formate, that could become a very worthwhile project to develop into, what could potentially be, a highly profitable revenue stream.

Gold and Cobalt the Preferred Flavour of Recent Listings

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IPO WATCH: The Roadhouse has been a bit slow catching up on all the new resources companies to have listed over the holiday break.

ARDEA RESOURCES (ASX: ARL)

Ardea Resources (ASX: ARL) is a spinout from Heron Resources (ASX: >>>) to work up that company’s portfolio of non‐Woodlawn exploration and development tenements.

The stock has traded at a premium to its 20 cent IPO value, which raised $6 million.

The company holds or will hold rights to Heron’s Kalgoorlie nickel project, which hosts a JORC 2012 resource of 805 million tonnes at 0.7 per cent nickel and 0.05 per cent cobalt.

The project is the subject of an ongoing Pre-Feasibility Study, focussing on high‐cobalt resources.

Other projects in the portfolio of Heron cast offs include: the Lewis Ponds gold-zinc project in New South Wales, theMt Zephyr gold and nickel sulphide project in the Eastern Goldfields of Western Australia, and the Bardoc Tectonic Zone, also in the Eastern Goldfields.

Website: www.ardearesources.com.au

COBALT BLUE (ASX: COB)

Cobalt Blue (ASX: COB) was spun out of Broken Hill Prospecting (ASX: BPL) and raised $10 million at 20 cents per share to join the booming cobalt-rush.

The company’s focus is the Thackaringa cobalt project, which covers an area of 63 square kilometres, located 23km west of Broken Hill in western New South Wales.

The company’s stated strategy is to advance the development of the Thackaringa Cobalt Project via a structured series of feasibility studies.

The steps involved include:

Stage (1): Targeting a 100 million tonne (JORC 2012-compliant) Inferred Resource base and completion of a Scoping Study by June 2017. Target beneficial interest at end of Stage (1) is 51 per cent;

Stage (2): Defining Indicated Resource base, metallurgical, geotechnical and base-line environmental studies. Complete a Pre-Feasibility Study (JORC 2012-compliant) by June 2018. Target beneficial interest at end of Stage (2) is 70 per cent;

Stage (3): Defining Ore Reserve base, completing a Bankable Feasibility Study satisfying JORC 2012 modifying factors by June 2019. Target beneficial interest at end of Stage (3) is 85 per cent;

Stage (4): Securing project financing and confirming a decision to mine by June 2020. Target beneficial interest at end of Stage (4) is 100 per cent and transfer of full legal title to the company.

Website: www.cobaltblueholdings.com

HORIZON GOLD LIMITED (ASX: HRN)

Horizon Gold Limited (ASX: HRN) completed a $15 million IPO and listed on 21 December 2016.

Horizon is focused on exploration and development of the company’s 100 per cent-owned Gum Creek project in Western Australia, which has historically produced over one million ounces of gold.

Horizon Gold is using the funds raised from the IPO to fund an aggressive exploration program and development studies at Gum Creek.

The project covers approximately 724 square kilometres and hosts JORC 2012-compliant Mineral Resources of 17.3 million tonnes at 2.25g/t gold for 1.25 million ounces of gold.

Existing infrastructure at the site includes a 110-person camp, operational airstrip, tailings storage facilities, and an extensive road network.

Also on site is a 600,000 tonnes per annum processing plant, however due to its age and condition a fair whack of capital investment would be required to return the plant to operating status.

Horizon Gold is concentrating on multiple high-priority drill targets and possible resource extension opportunities it has identified for its near-term exploration activities.

Website: www.horizongold.com.au

Source: Company announcement