Impact Minerals well-funded to expand Commonwealth Gold Project

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THE INSIDE STORY: Impact Minerals has managed to achieve what any number of ASX-listed companies would have been very happy to emulate in the past 12 months. By Mark Mentiplay

That has been to maintain positive momentum throughout the recent downturn, which is directly attributable to the company’s willingness to get out and do what exploration companies do best – explore.

This is one aspect that has set the company apart from most of its peers over the last couple of years and has paid off with it sitting in the enviable position of being well funded and able to sustain a good share price and market cap in that period.

Although its current focus is on its high grade precious and base metal Commonwealth project, Impact will still be keeping a close eye on the Broken Hill platinum-copper-nickel project where it intends to commence follow-up work on the highly-promising drill results achieved on the Red Hill propsect last year. Both of these projects are in New South Wales.

“It may appear to the market that we have taken our eye off the Broken Hill nickel-copper-PGE project by increasing our focus the Commonwealth gold, silver, lead-zinc and copper project,” Impact Minerals managing director Dr Mike Jones told The Resources Roadhouse.

“This is simply because the amount of aggressive exploration we have carried out over the two years has generated some very high-grade drill results for those metals on both of the projects.

So now we are beginning a new phase of significant follow-up drilling, starting at Commonwealth with the intention of heading then back to Broken Hill later in the year.”

Impact is now focusing on expanding the already outlined Commonwealth gold-silver-zinc resource for early production/cash flow. 

The Commonwealth project has an established mineable gold equivalent resource and a one million ounce – plus exploration target.

The company also has two powerful backers, which means it is now cashed up and ready to continue focusing its exploration spotlight on the Commonwealth gold project.

Commonwealth already has current Inferred gold-silver-copper-lead-zinc Resources of 720,000 tonnes at 4.5 grams per tonne gold equivalent (AuEq) containing 110,000 ounces AuEq, including 140,000 tonnes at 9.3g/t gold for 47,000 ounces AuEq, underlining the high grades being found.

According to Dr Jones, the 315 square kilometre project, located 95 kilometres north of Orange, has the potential for small scale, early production, with a one million ounce gold equivalent exploration target 

“The grades are coming up well and grade conquers all,” he said.

“That is necessary in this market.

“At the Commonwealth gold project, we believe we have found a starter pit, now we have to extend that.

“We haven’t had the discovery hole for a major deposit yet, but we are aiming for more than one pit and an underground operation.”

The 100 per cent-owned project sits within the Lachlan Fold Belt, a renowned region for major gold-silver-base metal mines.

Impact acquired the Commonwealth project in June 2013, since when it has demonstrated its potential to host two deposit types: a high-grade gold-volcanic massive sulphide (VMS), like the seven million ounce AuEq Woodlawn-style orebody; and porphyry copper-gold discoveries such as the 25 million ounce gold/4.9 million tonnes copper Cadia-Ridgeway project.

Impact has identified multiple targets at depth and along trend from the known resource as well as new, untested targets discovered by geophysics and soil geochemistry over 8sqkm and growing.

In all, the company boasts 50km of strike potential for the two types of deposits.

Previous exploration, including a ground electromagnetic survey, re-logging and sampling of previous drill core, is now being followed by ground radar and a major reverse circulation and diamond drilling program of up to 3,000m.

This will test the top dozen of 40 or so targets to have been identified at four prospects covering 5sqkm – these being the Commonwealth deposit, Silica Hill, Welcome Jack and Doughnut.

This work is designed to test Impact Mineral’s growing belief that the targets are all part of one large porphyry copper-epithermal system.

At the Commonwealth mine, intercepts from different holes have included:

4.7m at 5.5g/t gold and 253g/t silver from 54.3m; and
9.8m at 8.4g/t gold and 357g/t silver from 54.2m.

Commonwealth South has yielded:

4 m at 41 g/t gold; and
26m at 2.5g/t gold and 20g/t silver from 32m.

“Each time we’ve spent exploration money, we’ve had good results,” Jones said.

The Broken Hill PGM-nickel-copper project, located 20km east of the world-class Broken Hill silver-lead-zinc mine in NSW, has yielded the highest platinum grades ever found in Australia and has an exploration target of one million ounces PGMs.

Three priority targets have been identified over a prospective 40km belt within Impact’s 200sqkm EL in the SE part of the richly mineralised Curnamona Province.

The Platinum Springs target has yielded drill intercepts of 52.6g/t platinum equivalent and more recently, 0.6m at 11.5g/t platinum, 25.6g/t palladium, 1.4g/t gold, 7.6% copper, 7.4% nickel and 44.3g/t silver.

Red Hill has also yielded high-grade PGM, copper and nickel results.

Drill hole RHD012 demonstrated rare PGE rhodium of 4.6g/t, 7.2g/t iridium, 5.6g/t osmium, 3.1g/t ruthenium, 10.4g/t platinum, 10.9g/t gold, 294g/t palladium, 335.8g/t 6PGE+gold, 7.4% nickel, 1.8% copper and 19g/t silver over 1.2m.

This intercept sits within a high-grade 3.5m intercept of 1.7g/t rhodium, 2.6g/t iridium, 2g/t osmium, 1.1g/t ruthenium, 144g/t palladium, 5g/t platinum, 6g/t gold, 2.3% copper, 159g/t 6PGE+gold, 2.9% nickel, 2.3 copper and 14.5g/t silver.

In addition high grade zinc-lead-silver mineralisation has also been discovered and RHD018 returned 1m at 26.8% zinc, 2.8% lead, 133g/t silver and 1m at 21.4% zinc, 08% lead and 31.5g/t silver, within a 5.1m intercept of 10% zinc, 0.8% lead and 40.4g/t silver.

Spectacular high-grade rock chip and bulk samples have also been found over 9km of strike at Moorakai.

Work at the Broken Hill project is ongoing, with re-analysis and synthesis of previous exploration results expected to confirm the potential for bulk tonnage PGE mineralisation.

Jones said he expects follow up drilling at Red Hill after the current Commonwealth drilling, probably about 2,000m in the September 2016 quarter.

Impact is nicely cashed up with exploration funding of up to $8.3 million for its two prime NSW projects.

It has $4 million in the bank and another potential $4.3 million of funding when/if iron ore mining billionaire and Fortescue Metals boss Andrew Forrest’s Squadron Resources exercises its share options also an option to acquire a 19.9 per cent stakes in the Commonwealth and Broken Hill projects. This follows an earlier injection of $3 million cash by Squadron via a placement and convertible note. 

Impact has also received strong funding from 28 per cent major shareholder, the prominent German industrial Bunnenberg family.

There is a certain serendipitous aspect to Impact’s exploration and development of both the Commonwealth and Broken Hill projects.

Coincidentally, at the time of Impact’s interest, both projects were also being investigated by Squadron’s and Forrest’s right hand geologist, Dr John Clout, who along with Dr Jones, worked at pre-eminent Western Australian miner Western Mining in the 1980s-1990s.

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.

MAJOR SHAREHOLDERS
Bunnenberg Family 28%
Squardron Resources 6%
Directors 7%.

World-class Resource wakes slumbering sector

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THE INSIDE STORY: The Australian investment community finally took note of how impressive the Teena zinc deposit of Rox Resources (ASX: RXL) actually is.

All it took to shake everybody up was the release of a world-class Mineral Resource for Teena, placing it on par with the world’s largest zinc deposits.

Utilising a six per cent zinc-lead (Zn+Pb) cut-off, the JORC (2012) Inferred Mineral Resource is:

58 million tonnes grading 12.7 per cent Zn+Pb (11.1 per cent zinc, 1.6 per cent lead) for 7.4 million tonnes of contained zinc and lead metal (6.5Mt Zn and 0.9Mt Pb).

The Teena zinc deposit, located eight kilometres due west of the McArthur River zinc mine, is part of the Reward zinc-lead project in the Northern Territory, a Joint Venture between Rox and Teck Australia, (Rox 49%: Teck 51%), a subsidiary of Canadian major Teck Resources.

Teck is earning up to a 70 per cent stake by spending $15 million, having already spent $13.8 million.

Announcing the Inferred Resource, Rox declared the Teena deposit to represent the largest and highest grade zinc-lead mineral resource discovered in Australia for over 20 years.

“On a global scale, the estimated tonnage and grade of Teena is comparable to other giant zinc-lead Resources,” Rox Resources managing director Ian Mulholland told the Resources Roadhouse.

“Teena has zinc grades as high as currently operating mines at McArthur River, Mt Isa and the grades previously mined at Century.”

To provide some idea of scale – Teena contains a total of 16.3 billion pounds of zinc and lead metal (14.2 billion pounds zinc, 2.1 billion pounds lead), which in terms of contained metal exceeds the endowments of both the Cannington (South 32) or the Dugald River (MMG Limited) deposits.

Rox’s current 49 per cent interest will ultimately drop to a 30 per cent interest after Teck completes its earn-in.

This is still a considerable interest for a junior exploration company in such a project, and compares favourably to other companies with minority interests in substantial projects, such as Independence Group’s 30 per cent of Tropicana, Talisman’s 30 per cent of Monty, and Creasy Group’s original 30 per cent (now sold) of Nova.

“There are two lenses of zinc-lead mineralisation at Teena, which occurs as two sub-parallel lodes, termed the Lower Lode and the Upper Lode,” Mulholland explained.

“The upper lens has a Resource of 45 million tonnes at 13.7 per cent zinc and lead (12 per cent zinc, 1.8 per cent lead), while the lower lens is a little bit thinner and a little bit lower grade with a Resource of 14 million tonnes at 9.4 per cent zinc and lead (8.2 per cent zinc, 1.2 per cent lead).”

Drilling at Teena has defined a large stratiform mineralised system over one kilometre in length and Rox is confident the Mineral Resource will grow by further drilling, especially along the margins of the deposit.

Drilling has been constantly encouraging, returning results including:

38 metres at 16.9 per cent zinc and lead Zn+Pb;
26.4m at 13.3 per cent Zn+Pb, including 16.2m at 17.2 per cent Zn+Pb; and
20.1m at 15 per cent Zn+Pb, including 12.5m at 19.5 per cent Zn+Pb.

“The drilling has always returned high grades over good thicknesses, which have been defined over 1.3 kilometres – probably up to 1.5 kilometres,” Mulholland noted.

“It is worth noting that the drill spacing is still fairly wide, which is why this is only an Inferred Resource, but there is remarkable continuity between the drill holes – every drill hole virtually looks the same.

“The other remarkable aspect about the project is the zinc to lead ratio, which is around 6.5:1 , which we think will be favourable for metallurgy.

“We’re only at a preliminary stage with metallurgy but we think that is going to be quite good.”

Mulholland made a special effort to dispel a popular misconception about the depth of the Teena deposit, indicating it to be sitting between 400m to 1000m depth.

“It’s not deep when you compare it to other deposits and we know of no impairments to mining the ore body,” Mulholland said.

“Most of the mineralisation sits between 600 metres to 900 metres below surface – relatively speaking that is not very deep.

“We are really in elephant country – the Carpentaria zinc province, where over 20 per cent of the world’s zinc reserves are contained and mined at depths of well over one kilometre.

“Teena currently sits at number seven on the all-time Australian zinc deposit size list.”

The recent excitement being generated from Rox’s West Perth offices has not been contained to the goings on at the Teena deposit.

The company has also been busy elsewhere within its project portfolio, most recently at its Mt Fisher gold project, located in the north-eastern Goldfields of Western Australia approximately 230 kilometres north of the town of Leonora.

Rox has struck another shrewd JV agreement at Mt Fisher, this time with emerging WA gold production heavyweight, Doray Minerals (ASX: DRM).

Under the terms of the farm-in agreement, Doray is to sole fund an initial $5 million expenditure to earn a 51 per cent interest and a total of $10 million to ultimately earn a 75 per cent interest.

“There is a one million dollar minimum expenditure in the first year before they can withdraw,” Mulholland said.

“Then an additional $4 million over two years to earn 51 per cent and then another $5 million over another two years to move to 75 per cent.

“Rox is free-carried to the completion of a Pre-Feasibility Study.”

Once it was known Rox was looking for a JV partner for Mt Fisher there was a lot of interested parties knocking on its door.

“Being a small exploration company with limited resources we were very pleased to attract a Joint Venture partner such as Doray Minerals, a company with the credentials to accelerate the search for a significant gold deposit in the area,” Mulholland said.

The Mt Fisher project comprises a number of exploration tenements covering approximately 480 square kilometres, within the underexplored Mt Fisher greenstone belt.

This belt is located 40km east of the prolific Yandal greenstone belt, host of significant gold deposits such as Jundee, Bronzewing and Mt McClure.

When compared to neighbouring greenstone belts the Mt Fisher belt, with just on half a million ounces of gold endowment, can look a touch underdone – the Norseman-Wiluna belt has over 10 million ounces of endowment, the Yandal belt with over 17 million ounces of endowment.

“We see there is very good potential to find gold there, and at least define a few million ounces,” Mulholland said confidently.

“We have been conducting some extremely focused exploration here and have grown Resources to just under 100,000 ounces.

“The potential of this project really needs to be reassessed in light of the higher gold price.”

Mulholland’s confidence seems justified, given the price of gold is up 15 per cent since the company’s last project evaluation, which he believes makes the Mt Fisher gold project look even stronger.

“The gold-in-regolith anomaly is of significant size and contains a large amount of gold,” he said.

“We consider this indicates a deeper source of gold, and from the amount of gold in the weathered regolith that gold source must be sizeable.”

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

MAJOR SHAREHOLDERS
Drake Private Investments   3.4%
Rox Directors        2.1%

AMEC 2016 Day Two

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THE CONFERENCE CALLER: The Crown Perth Convention Centre was the venue for the 2016 Association of Mining and Exploration Companies (AMEC) Convention.

Day Two continued with more investor-focused company presentations.

Neometals (ASX: NMT) chief operating officer Michael Tamlin woke up the after-lunch crowd by declaring the present time to be, “a very exciting time for the company”, with the development of the Mt Marin lithium mine.

Mt Marion is in Joint Venture (Neo 13.8%) with Minerals Resources (43.1%) and China’s second largest lithium producer, Jiangxi Gangfen Lithium Co. Ltd (43.1%).

The mine is fully-funded with offtake secured for the life-of-mine.

The project has a JORC-compliant Resource of 23.14 million tonnes at 1.39 per cent lithium oxide.

The much-anticipated appearance of Metals X (ASX: MLX) CEO Peter Cook was not to be as he was elsewhere.

However, his stand in, executive director Warren Hallam provided some insight into the company’s activities.

The company has a raft of gold deposits dotted round the regional centre of Kalgoorlie in Western Australia.

The company has five key gold projects with the Fortnum gold mine and Rover 1 gold-copper project both in the development stage.

It has three producing gold mines.

The first is the Higginsville mine producing 100,000 to 200,000 ounces of gold per annum at a cost of $1250 per ounce.

The South Kalgoorlie mine yields 80,000 to 100,000 ounces per annum at a cost of $1180 per ounce.

The Central Murchison project produces 100,000 ounces and is expanding to produce more thatn 200,000 per annum at a cost of $1250 per ounce.

The company currently classes as a diversified miner, however once the recently-announced purchase of the nifty copper mine is finalised, Hallam suggested it could split to focus on the gold and base metals as separate entities.

Next to the podium was Peel Mining (ASX: PEX) managing director Rob Tyson.

The company’s main focus is the Mallee Bull project in the Cobar Superbasin New South Wales, where it has a 50:50 JV with CBH Resources.

The company acquired Mallee Bull in 2011 and calculated a Resource in 2014 of 3.92 million tonnes at 2.3 per cent copper, 2.3 grams per tonne gold, and 0.3g/t silver for 2.7 tonnes contained copper equivalent.

Peel also made a further high-grade copper discovery on its NSW tenements on the Wirlong deposit.

Drill highlights from Wirlong include:

WLDD001
9m at 8 per cent copper, 17 g/t silver, 0.21 g/t gold from 616m, including 2.82m at 21.85 per cent copper, 46g/t silver, 0.62g/t gold from 619.68m, and 38m at 1.18 per cent copper, 4g/t silver from 450m;

WLRC015
4.9m at 4.3 per cent copper, 13g/t silver from 402.1m, including 0.9m at 19.5 per cent copper, 58g/t silver from 402.1m, and 22m at 1.0 per cent copper, 4g/t silver from 332m.

WLRC005
4m at 3.04 per cent copper, 12g/t silver, 0.19 per cent zinc from 196m; and

WLRC006
2m at 2.99 per cent copper, 1.08g/t gold, 16g/t silver, 0.41 per cent zinc from 322m.

Tyson said the company had an aggressive drilling program lined up for Wirlong for the second half of 2016, which it was very keen to get out and commence.

Blackham Resources (ASX: BLK) is getting very close to pouring gold and managing director Bryan Dixon was as animated as anybody has ever seen him before as he cogitated on the timing of the Wiluna gold plant start up in terms of the current gold price.

History – he said – tells us that this is the best time, as far as operating margins for gold producers since the heady days of the boom, in fact he suggested they were even better.

The company is spending $32 million to bring the Matilda gold project to fruition with anticipated cash flow of $271 million over the initial eight years of operation with EBITDA predicted of $63 million per annum.

Metalicity (ASX: MCT) managing director Matthew Gauci always has a tale to tell, and today was no exception.

It seems the company has anew major shareholder with RCF Capital having sold out just last week.

The new shareholder emerged to be Shanghai Metals with a 10.1% stake.

The final presentation came from Doray Minerals (ASX: DRM) managing director Allan Kelly.

Doray has recently poured gold at its Deflector gold mine, which it acquired in 2014 from Mutiny Gold.

The first production from Deflector in May this year came ahead of schedule.

Kelly declared Doray to be on the cusp of a big increase in gold production with the inclusion of Deflector’s production.

The company has funded, permitted and commissioned two new high-grade gold projects within four years.

It is forecasting production of 140,000 ounces per annum targeting All In Sustaining Costs of less than $1000 across the two projects.

This means it will have the capacity to generate impressive free cash flow after debt repayment, exploration and other overheads.

AMEC 2016 Day One

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THE CONFERENCE CALLER: The Crown Perth Convention Centre was the venue for the 2016 Association of Mining and Exploration Companies (AMEC) Convention.

Day One of the AMEC Convention presented a number of investor-focused company presentations.

Kicking off the post-prandial investor presentation session Rox Resources (ASX: RXL) managing director Ian Mulholland spoke about the recently announced Teena deposit zinc Resource.

Rox recently declared the Inferred resource to have confirmed the Teena deposit represents the largest and highest grade zinc-lead mineral resource discovered in Australia for over 20 years.

Utilising a six per cent zinc-lead (Zn+Pb) cut-off, the JORC (2012) Inferred Mineral Resource is:

58 million Tonnes grading 12.7 per cent Zn+Pb (11.1 per cent zinc, 1.6 per cent lead) for 7.4 million tonnes of contained zinc and lead metal (6.5Mt Zn and 0.9Mt Pb).

Mulholland assured those who may think the Teena deposit is too deep showing it to be starting at a depth of 400 metres down to 1000 metres.

“Contrary to a lot of chatter about the deposit, it’s not deep,” he said.

“There are no known impediments to mining with the bulk of the ore body sitting between 600 to 900 metres.”

Next up was Independence Group (ASX: IGO) managing director and CEO, Peter Bradford.

Bradford explained the strategy for the Tropicana gold mine – IGO 30% / Anglogold Ashanti 70% – located 370 kilometres from Kalgoorlie would be to stockpile lower grade gold ore to concentrate on pushing the higher-grade material through the plant.

This, he said, would result in a much quicker repayment of the capital outlay on the project.

The intention would then be to only refine enough material per annum to satisfy the needs of the processing plant.

Encounter Resources (ASX: ENR) managing director, and AMEC president Will Robinson assured there to be no present danger associated with the company’s Yeneena project between Marble Bar and Newman in WA.

Robinson intimated the type of discoveries that can be made in the region have potential to be Tier One deposits.

He held up the company’s BM7 copper discovery to have such potential.

BM7 is a large minerals system containing high-grade copper sulphide.

Drilling at the deposit has encountered:

5 metres at 2.5 per cent copper from 388m;
52m at 0.6 per cent copper from 42m;
9m at 1.5 per cent copper from 42m;
74m at 0.4 per cent copper from 74m; and
140m at 2 per cent copper from 144m.

Robinson also spoke on the company’s recent Millenium zinc discovery where drilling hit high-grade zinc mineralisation.

At the north-west target zone hole EPT1854 hit 0.7m at 36.7 per cent zinc, in the Central Zone EPT2260 returned 70m at 2.3 per cent zinc and hole EPT218 in the South-East Zone returned 7m at 4.8 per cent zinc.

He indicated these three zones would be high-priority drilling targets during 2016.

Sandfire Resources (ASX: SFR) chief operating officer understatedly said his company, “like copper”.

He went on to say that now is a fantastic time to be involved in copper mining with current price increases, albeit small, provide the company an opportunity to continue to grow its business.

This potential growth is highlighted by Sandfire’s recent Monty discovery, which was recently bestowed a maiden JORC 2012-compliant Mineral Resource estimate of:

Total Indicated and Inferred Resources of 1.05 million tonnes at 9.4 per cent copper and 1.6 grams per tonne gold for 99,000 tonnes of contained copper and 55,000 ounces of contained gold.

This includes a high-grade massive sulphide resource of 763,000 tonnes at 12.1 per cent copper and 2.1g/t gold for 92,000 tonnes of contained copper and 52,000 ounces of contained gold.

Stepping up to the podium, Musgrave Minerals (ASX: MGV) managing director Rob Waugh took the audience through the company’s new Cue project in Western Australia.

The Cue project is a Joint Venture with Silver Lake Resources (ASX: SLR) with existing and new gold targets.

These include 126,900 ounces at Moyagee and 34,000 ounces of gold at Hollandaire and Rapier.

Copper Resources include 38,800 tonnes of contained copper at Hollandaire, which also has Reserves of 14,700 tonnes of contained copper.

Waugh said the intention was to grow the current gold resources at the project with the ultimate view being to bring it through to development.

Vimy Resources (ASX: VMY) managing director Mike Young took the audience down a uranium path.

“Uranium is a high density energy source,” Young said.

He stressed that many sectors are now looking for a way to offset CO2 emissions.

Uranium is a much-used energy source in Europe, where Young suggested a hungry market exists as the region is always, “looking for a reliable source of uranium”, to keep its generators pumping.

At 75 million pounds with a 17 year mine life Vimy’s Mulga Rock project is Australia’s third-largest undeveloped uranium deposit.

Southern Gold (ASX: SAU) managing director Simon Mitcell encouraged punters to hang in for his final presentation of the session teasing them by declaring his company to be a gold explorer with a gold mine, basically providing investors with, “the best of both worlds”.

Southern Gold is an active gold producer from its Cannon open pit gold mine just outside Kalgoorlie in partnership with Metals X (ASX: MLX).

The company’s deal provides a large cahs margin with around 50,000 ounces of gold recovered to date at a total cost of $1030 per ounce with a current gold price of around $1700 per ounce providing a $650 per ounce margin on the good side of the ledger.

The company anticipates earnings for the next nine months of approximately $14 million.

This will fund the company’s exploration on the Bulong, Glandore, and Cowarna gold projects, all located within 50km of its home base at Cannon.

Altona Mining signs US$238.5M joint venture for Cloncurry Project

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THE BOURSE WHISPERER: Altona Mining (ASX: AOH) has negotiated a binding agreement with Sichuan Railway Investment Group (SRIG) to create a joint venture to build a new copper-gold mine at the company’s Cloncurry project located in north-west Queensland.

The deal gives rise to a new Joint Venture company, Roseby Copper Pty Ltd (JVCo), which will hold the Cloncurry project.

The agreements follows the execution of a Framework Agreement in June 2015, since which SRIG has completed due diligence including diamond drilling, metallurgical testwork and technical, legal and financial reviews.

The positive outcome of the due diligence allowed the parties to finalise the relevant agreements with some of the commercial terms being changed.

Altona’s cash contribution is reduced from US$38 million to US$25 million and Altona’s equity in the JVCo is reduced from 40 per cent to 34 per cent.

SRIG’s cash contribution of US$213.53 million is essentially unchanged from US$214.5 million while its JVCo equity has increased from 60 per cent to 66 per cent.

The term of the Performance Guarantee of U$2 million provided by SRIG on signing the Framework Agreement is to be extended to 1 October 2016.

Altona can meet its obligation to contribute US$25 million from its $42.8 million cash balance at 30 April 2016.

Expenditure under an agreed work programme will be offset against this obligation.

Expenditure to date is estimated at $2.3 million.

Under the agreement the two parties intend to develop a seven million tonne per annum open-pit mine and flotation plant capable of producing 39,000 tonnes per annum copper and 17,000 ounces gold over an initial mine life of 11 years.

JVCo will own the Cloncurry project and have US$238.53 million in cash at closing which equates to $329 million at AUD: USD of 0.725.

The cash exceeds the previous estimate for capital costs of $294 million (including $18 million contingency).

The companies anticipate ultimate capital costs to be much lower given the current depressed market for mining construction.

Altona will be the manager of the JVCo for a period of three months from establishment of the JVCo, after which time the JVCo will have in place its own management.

Altona’s 34 per cent equity share of annual production from the Cloncurry project equates to approximately 13,000 tonnes of copper and 5,780 ounces of gold (15,000 tonnes of copper equivalent production), representing solid potential cash flow attributable to the company.

“This financing structure delivers higher and more immediate returns to Altona shareholders compared to conventional debt/equity mining project financing structure,” Altona Mining managing director Dr Alistair Cowden said in the company’s announcement to the Australian Securities Exchange.

“We have chosen to dilute at the project level, not at the company level.

“Altona avoids large dilutive equity raisings, debt, debt service taking precedence over shareholder dividends, mandatory hedging which caps the copper price upside and bank covenants limiting the ability to grow.

“On closing of the transaction, the project will be fully funded to production.

“The joint venture company will have approximately $329 million in cash plus the Cloncurry project.

“The project is significant for Queensland bringing approximately 300 construction jobs and when in production it will sustain approximately 280 new direct jobs.

“Altona’s 34 per cent interest will equate to approximately 15,000 tonnes of copper equivalent production which will generate significant cash-flow for Altona.”

Email: altona@altonamining.com

Website: www.altonamining.com

AMEC to discuss uncertainty caused by ASIC guidance on forward-looking statements

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CONFERENCE CALLER: In the lead-in to the Association of Mining and Exploration Companies (AMEC) annual talkfest next week, the body’s chief executive, Simon Bennison says the release of ASIC Information Sheet 214 on Forward-Looking Statements has created significant uncertainty in the Australian mining and mineral exploration sector.

Bennison declared that ever since the guidance was released in April, AMEC has received unprecedented member feedback.

Most of that backlash has been due to the Information Sheet containing clauses that will prevent companies from releasing important material information to shareholders and the market at crucial funding points in the overall mine cycle, as well as impeding them from the opportunity to raise capital when needed.

AMEC believes there appears to be a number of unexpected and material ramifications which could have a debilitating impact on Australia`s market integrity and confidence, future investment potential and overall competitiveness in what is already a highly competitive global capital market.

The industry concerns need to be addressed quickly to ensure the integrity of the Australian Securities Exchange is not compromised, and certainty returns to the market and industry.

The topic will be the subject of discussion in the first morning session of the two-day AMEC Convention, which kicks off on Wednesday 8th June 2016 at the Crown Convention Centre in Perth with Allion Legal principal energy & resources Stuart Mengler and Stavely Minerals managing director Chris Cairns discussing the need to strike a balance on Forward-Looking Statements. 

This session will be immediately followed by the Federal Minister for Resources, Energy and Northern Australia Josh Frydenberg, who is slotted to give a presentation promoting innovation and growth in the Australian mineral exploration and mining sectors.

If you are not already registered, you can still register by visiting the AMEC website.

www.amecconvention.com.au.

S2 Resources achieving early exploration success

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THE INSIDE STORY: S2 Resources (ASX: S2R) emerged from the merger of Sirius Resources and Independence Group (ASX: IGO) in October 2015.

In the ensuing six months S2 Resources has made substantial headway in establishing its credentials as a serious exploration play.

With around $17.8 million in the bank, the company’s exploration ambitions are well-funded, which in the current environment is important for a junior explorer.

In March 2016, S2 announced the completion of the first Mineral Resource estimate for the near surface portion of the Baloo gold deposit, located on the company’s 100 per cent-owned Polar Bear project in the Eastern Goldfields of Western Australia.

The Mineral Resource at Baloo came in at 2,170,000 tonnes at 1.8 grams per tonne gold for 123,000 ounces of contained gold at a lower cut-off grade of 0.8g/t gold.

“Being able to define a Resource so early at Baloo is an important part of our strategy for the Polar Bear project,” S2 Resources managing director Mark Bennett told The Resources Roadhouse.

“It’s not a massive deposit, it’s modest at 120,000 ounces, but it does remain open down dip and down plunge.

“The important thing about Baloo is that it starts just two metres below surface and it has a high ounce-per-vertical-metre metric of between 1000 to 1500 ounces per-vertical-metre from two metres down.

“So it is all about quality not quantity in this scenario with two gram dirt being very valuable.”

S2 envisage early monetisation of the Baloo deposit in some shape or form, with possible developments involving toll treatment, a heap leach operation or possibly even the sale of the currently defined part of the deposit.

“The reason for monetising Baloo would be to make it a source of revenue for the company, rather than a cost, with the intention for cash generated to top up our current bank balance of $18 million to fully-fund exploration in our search for bigger things,” Bennett explained.

When announcing the Baloo Resource, S2 indicated it would be carrying out exploration drilling at the two other main Polar Bear targets of Monsoon, four kilometres away, and Nanook, a further six kilometres south, which also yielded early success.

Following up an earlier intersection at Monsoon of 32m at 2.5 grams per tonne gold, S2 intersected 12m at 26g/t gold.

Subsequent drilling at the Nanook deposit encountered:

SPBA3817
16m at 51.3g/t gold from 44m to end of hole (EOH), including 4m at 203 g/t gold from 48m and 1m at 1.56 g/t gold from 59m to EOH; and

SPBA3810
16m at 1.63g/t gold from 40m, including 4m at 4.69g/t gold from 44m.

These results were quickly followed by the announcement of a Mineral Resource estimate for in the Nanook channel (excluding any bedrock potential) of 2.2 million tonnes at 1.2g/t gold for 84,000 ounces of gold.

“The Nanook deposit appears to be an accumulation of alluvial gold in a paleo channel,” Bennett said.
 
“We have quantified that and emerged with a Resource of 84,000 ounces of gold, but more important now is to answer the question where is it coming from?
 
“One important result from the recent drilling came from outside the paleo channel, in the bedrock, where we encountered four metres at 50 grams per tonne gold.

“So we certainly have a high-grade source of gold and again we have the grade – now it is just a question of whether the dots connect and we have substantial tonnage.

“The next step is to find the source of this gold and if so, determine how much of it remains intact.

“In this sense the paleo channel resource represents a very big geochemical anomaly.”

S2 believes it has now defined three gold hotspots over a 10 kilometre distance on a single trend at Polar Bear.
 
The company is set to commence a RC drill program to search for the source of this gold, which will be co-funded by the Government of Western Australia as part of its Exploration Incentive Scheme (EIS).

As encouraging as the results from Polar Bear are, Bennett described it – in culinary terms – as the ‘entrée’ to what S2 considers to be its main course – the Swedish casserole if you will – the company’s 100 per cent-owned Skellefte project in Sweden.

The project sits in the middle of a 100 year old mining district peppered with mining infrastructure and culture in the district where Swedish mining giant Boliden made its start.

This area contains a number of substantial copper-zinc-silver-gold sulphide deposits, including the Boliden mine, the Kristineberg mine, and the Storliden mine, and also contains the Bjorkdal gold deposit.

“When we arrived here the ground surrounding all of Boliden’s operating mines was available, unlike what you would typically find in Australia,” Bennett explained.

“We basically blanket-pegged the ground and we now own more ground in Boliden’s home territory than they do, immediately along strike from some of their mines.”

To announce its arrival S2 flew a VTEM geophysical survey, which turned out to be the first such survey carried out over this historic mining region.

The survey identified 67 EM conductors many along strike from the operating mines lying under around five metres of cover and, until now, apparently unexplored.

“It all looked too good to be true, so when we were able to access a drill rig we thought we should check one of these EM anomalies out to make sure they are real,” Bennett said.

Reality set in fairly rapidly with the first two of three diamond-core holes drilled on a single section to test one of the EM anomalies confirming the presence of zinc mineralisation at the Svan Vit prospect.

The first hole (SSVA160001) clipped the top of the ground EM conductor model and intersected a narrow zone of mixed sulphide mineralisation, returning:

0.55m at 1.49 g/t gold, 45g/t silver from 25.3m; and
1.05m at 2.87 per cent zinc, 5g/t silver from 88.7m.

The second hole (SSVA160002) was drilled 90m down dip of the first through several zones of mixed sulphide mineralisation and intersected:

0.55m at 2.23 per cent zinc from 164m;
3.7m at 1.75 per cent zinc, 5.3g/t silver from 170.2m; and
5.05m at 3.15 per cent zinc, 6g/t silver, 0.2 per cent copper from 184.6m.

A follow-up downhole EM survey suggests the three holes S2 has drilled to date have only tested the margins of a potentially much more extensive zone.

Further drilling has been scheduled to adequately test the Svan Vit prospect on the back of the two holes intersecting low grade zinc and silver bearing VMS-style mineralisation on the margin of an upper conductor.

 “We are trying to maintain a cool approach, but the Svan Vit deposit has got us reasonably excited, Bennett said.

“We have hit VMS mineralisation with the first two drill holes into the first of the 67 EM anomalies we have identified to date, but from what we have seen in the results we have so far, it looks like we’re on the edge of something bigger.

“The tantalising thing about these results and this project is that the snow has melted so we now have to wait until October before we can start drilling again.

“I think it could be well worth the wait.”

S2 Resources LTD (ASX: S2R)
…The Short Story

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

Phone: +61 8 6166 0240

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

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

MAJOR SHAREHOLDERS
Mark Creasy 34%
Board, Staff and Consultants 7.8%

What the Analysts Say

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WHAT THE ANALYSTS SAY: Breakaway Research has released coverage on TNG Limited and Orinoco Gold.

Website: www.breakawayresearch.com

Company: TNG Limited (ASX: TNG)

TNG has continued to progress the key Mount Peake vanadium-titanium-iron project with the signing of a number of additional agreements relating to offtake, financing, development and permitting. These build on previous agreements.

Of these, the signing of the offtake agreements for 60 per cent of the life of mine iron and vanadium products are critical, in that these will be vital in helping secure finance through underpinning projected revenue.

TNG is currently in negotiations on the crucial titanium product offtake.

The signing of financing and TIVAN plant development agreements with the SMS Group further cements the strong relationship with this longstanding key partner, and in Downer EDI and McMahon Services the company has entered into agreements with world class potential development partners and project managers.

Key price drivers include securing titanium offtake and project finance, and completing permitting.

TNG is concentrating activities on financing and permitting for its flagship Mount Peake vanadium-titanium-iron project, located north of Alice Springs in the Northern Territory.

The project has the potential to be a major global supplier of premium grade vanadium, as well as high purity iron and titanium products.

The TIVAN hydrometallurgical process is being developed by TNG and partners to be a low cost method of leaching titano-magnetite concentrates to extract all valuable components, including vanadium, iron and titanium.

The company also holds a number of other base and precious metals projects in the Northern Territory, which it plans to spin out, via an IPO, into Todd River Resources.

Website: www.breakawayresearch.com

Company: Orinoco Gold (ASX: OGX)

Development of Orinoco’s 70 per cent-held Cascavel gold project in Brazil is well advanced.

However, hold-ups in customs clearances have delayed the expected start-up by four to five months, with commissioning now expected in the second half of June.

All plant has now been delivered to site, with final construction underway.

Despite the construction delays to the surface plant, the company has continued to advance its underground development, and now has some three months of ore ready for stoping when plant commissioning is complete.

The development work has confirmed the geometry, continuity and grade of the mineralisation, with the expected diluted production grade of approx. 20 grams per tonne gold supported by some very high grades in the development sampling.

Results of drilling at Sertão have supported the interpretation that the mineralisation is similar to that at Cascavel, hosted in parallel shoots within an overall gently dipping mineralised thrust – one shoot has now been intersected for 1,600 metres down plunge, and thus Sertão could be a potential future mining operation.

Near mine exploration at Cascavel also continues to return very encouraging results.

Short to medium term price movers will include demonstrated production at target levels, exploration success and gold price movements.

Orinoco is an ASX-listed company concentrating efforts on orogenic gold mineralisation in the highly prospective Goiás region of central Brazil.

The key development project is the company’s Cascavel gold project, part of its broader Faina Goldfields project, which covers some 300 square kilometres of greenstone units.

The company’s strategy is to initially develop a relatively small scale, start-up operation, with plans to then increase resources and mine life by funding drilling and other exploration activities from operational cash flow.

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.

Azure continues to polish Mexican silver portfolio

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THE INSIDE STORY: Most mining projects have a story to tell, which often hold a remarkable historical chapter in addition to recent episodes.

The story of Mexico-focused precious metals play, Azure Resources (ASX: AZS) is its success on the Alacrán copper project, which it is acquiring from Canadian major, Teck Resources.

In September 2015, Azure confirmed discovery of a significant silver deposit at the Alacrán project.

The first four-hole Reverse Circulation (RC) program Azure drilled at the Mesa de Plata prospect – Spanish for Silver Table, and named as such by Azure’s Mexican geologists Based upon its topography – intersected thick zones of high-grade silver mineralisation commencing from surface.

Azure commenced a solid drilling campaign of a further 57 RC holes and 5 diamond core holes, which produced a recently-announced near-surface, multi-million ounce JORC Mineral Resource of:

9.6 million tonnes at 84 grams per tonne silver for 25.9 million contained ounces of silver.

This includes a high-grade zone of: 2.2 million tonnes at 219g/t silver for 15.3 million contained ounces of silver.

The upshot from the Mineral Resource definition drilling was confirmation of silver mineralisation within the Mesa de Plata deposit starting from surface.

The drilling also demonstrated the overall mineralised zone to have a true vertical thickness of up to 70m extending throughout Mesa de Plata with good internal continuity of silver grades.

The high-grade zone of silver mineralisation has been confirmed to commence at – or very close to – surface, extending over a surface area of approximately 400m by 150m, with a true vertical thickness ranging from 20m to 50m.

The high-grade zone is surrounded and underlain by a larger mid-grade zone of silver mineralisation, which extends the full length and width of the Mesa de Plata ridge, which in places is 300m wide with a strike length over one kilometre.

We’ll get back to the recent successes, but for perspective, let’s take a brief run through the history of the project.

In exploration terms, over the past 100 years, the Alacrán project has seen very little exploration work.

From the late 1800s to 1913 it was subjected to artisanal and semi-industrial scale mining for gold, copper, silver and zinc until the Mexican revolution resulted in the closure of mines until well after the revolution ended.

Anaconda Copper Mining Company commenced production at the Cananea copper mine, which is currently one of the biggest copper mines in the world, in the 1930s through the 1960s

“Anaconda, during that 30 year period, carried out just three mapping programs and no sampling was carried out on the 54 square kilometre property,” Azure Minerals managing director Tony Rovira told The Resources Roadhouse.

In the 1960s, the Mexican government nationalised the mining industry and in the 1970s formed state-owned mining company, Grupo Mexico, which owned the Cananea copper mine and all surrounding exploration areas.

“In the 40 years up to 2010 they carried out one exploration program within the eastern part of Alacrán, defining a 100 million tonnes resource at 0.25 cent copper – about the same grade as that being mined at Cananea – so no further work was carried out on Alacrán,” Rovira explained.

Looking to expand mining at Cananea by 2012, Grupo Mexico needed the tenements next door, which at this stage belonged to Teck Resources.

A land swap presented the Alacrán project to Teck, which it left untouched before departing Mexico in 2013.

“In 2014 we negotiated the acquisition of Alacrán, and commenced the first serious modern exploration on the project area, with the exception of the drilling by Grupo Mexico in the 1990s, in 2015,” Rovira continued.

“We made an early decision not to pursue a large low-grade porphyry copper ore body, because the scale of that would be overwhelming for a company of our size.

“We wanted to find something we were more familiar with – a deposit of near-surface, high-grade precious and base metal mineralisation which could be developed by a company of our stature.

“Deciding a systematic approach would be best, we commenced a grid-based soil sampling program in the northwest part of the property.

“The first day we were out there, the first soil samples from the first line produced high-grade silver.

“Virtually, the rest is history, and within months a significant silver deposit had been defined.”

Azure has since conducted further exploration on the project, at the Loma Bonita – Spanish for Beautiful Hill – deposit where it achieved encouraging gold grades from mapping and sampling activities.

“Interestingly, Mesa de Plata is a silver-only deposit, while Loma Bonita has emerged as a gold deposit with silver credits,” Rovira said.

“Further value may added by the copper and other base metal potential present in the area, which is enormous as well.”

Azure drilled 10 holes into Loma Bonita, each encountering gold mineralisation very close to surface.

Recent drilling results from Loma Bonita include:

Drill hole MDPD-012
48m at 2.68g/t gold and 32g/t silver from 23.1m, including 27m at 4.07g/t gold and 27g/t silver from 23.1m, including 15.6m at 5.18g/t gold and 22g/t silver from 23.1m; and

Drill hole MDPD-011
18.4m at 1.57g/t gold and 40g/t silver from surface.

“Hole 12 is interesting in that it is located further back up the hill and it has encountered primary gold mineralisation that is thicker and higher grade than the earlier holes,” Rovira said.

“There is some really great potential in this whole area for a nice, simple silver mine at Mesa de Plata and then a much bigger silver, gold, base metal mine at Loma Bonita and the areas immediately surrounding it.”

Although Alacrán is powering full steam ahead, Azure remains focused on its other flagship project, the Promontorio copper project, located in Chihuahua.

Azure’s exploration work to date has led to the discovery of the Promontorio and Cascada copper-gold-silver deposits.

The project comprises four adjoining mineral concessions, all four of which are 100 per cent-owned by Azure.

In 2014, Azure signed an Earn-In and Joint Venture Agreement with Kennecott Exploration Company, part of the Rio Tinto Group, to search for large copper deposits.

Kennecott has to spend $45 million to earn an 80 per cent interest in the project.

“Since we signed the deal, Kennecott has been undertaking exploration,” Rovira said.

The Year One exploration program, entailing $2 million of geophysics and geochemical and geological data, and a drilling program was designed to test for porphyry-related copper mineralisation.

To date a total of five holes have been completed for over 4,000m.

“Year Two is now underway and we are drilling deep holes of around 800 metres to 1000 metres,” Rovira continued.

“Kennecott seems to be pleased with what they are seeing in the drill core, which is indicating we are definitely in the vicinity of a mineralised porphyry system.”

Azure augmented its Mexican silver portfolio with the recent addition of 100 per cent-ownership of the San Agustin project, in the central Mexican state of Durango.

San Agustin is in the heart of the Mexican Silver Belt, which hosts operating silver and gold mines, some producing by-product minerals, including zinc, lead and copper.

“While our focus is clearly on Alacrán, this new project provides an unexplored foothold in the middle of the hottest silver district in Mexico,” Rovira said.

Azure Minerals Limited (ASX: AZS)
…The Short Story

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

Ph: +61 (8) 9481 2555

Email: admin@azureminerals.com.au
Website: www.azureminerals.com.au

DIRECTORS and MANAGEMENT
Peter Ingram, Tony Rovira, Wolf Martinick

MAJOR SHAREHOLDERS
Yandal Investments (Mark Creasy) 9.8%
Drake Private Investments 8.4%
Dynamic Precious Metals Fund 6%
Sprott Inc. 3.2%

Sheffield keeps Thunderbird on course through BFS

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THE INSIDE STORY: When former gold bug Bruce McFadzean joined Sheffield Resources as managing director, he was quickly impressed by the size, scale and potential of the company’s 100 per cent-owned Thunderbird minerals sands project.

As a mining engineer with more than 35 years’ experience in the industry, McFadzean has led the financing, development and operation of numerous mines around the world.

He chalked up 15 years with the majors, both BHP Billiton and Rio Tinto, holding a variety of positions, but is probably best known for his four years as MD of Western Australia gold miner Catalpa Resources, which he took from a market capitalisation of $10 million to $1.2 billion on the back of a merger with Evolution Mining (ASX: EVN).

“I was a bit apprehensive when Sheffield first approached me to become part of the team, however that was short lived once I sat down and actually had a good look at the project and what it has to offer,” McFadzean told The Resources Roadhouse.

“I took on the role, with one small proviso being that I be paid a relatively low salary, but with exposure to equity in the company.

“The reason for that is because I think these times necessitate that management teams align themselves more with investors.

“Now the entire management team is renumerated along the same structure, with the equity we receive subject to shareholder approval.”

For those who may have come in late – the Thunderbird mineral sands project is located on the Dampier Peninsula about 60 kilometres west of Derby in the north of Western Australia.

The project’s main driver is the amount and quality of zircon that has already been established by Sheffield, making up some 59 per cent of forecast revenue.

Backing this up is a healthy amount of both high-grade sulphate ilmenite and HiTi leucoxene.

“This is a project that – metallurgically – has never gone backwards,” McFadzean said.

“As the test work has progressed with more samples – larger samples – it has either stayed the same or improved.

“That is a great technical attribute for a project – and we think there is still more improvement to come – especially on the ilmenite side.

“On the zircon side we have 80 per cent of our product being premium grade, which is around 60 per cent of our revenue stream.”

Sheffield boasts that the high proportion of zircon in the product suite sets Thunderbird apart from many of the world’s operating and undeveloped mineral sands projects, which are predominantly dominated by lower value ilmenite.

The Thunderbird deposit is the first major mineral sands deposit to be discovered in the Canning Basin and one of the largest mineral sands deposits to be discovered in the last 30 years.

“One over-arching thought that emerged from my personal assessment of Thunderbird was that, no matter if you are a producer or consumer of minerals sands, you really do have to take notice of this project,” McFadzean said.

Sheffield completed a Pre-Feasibility Study (PFS) on Thunderbird in October 2015, which demonstrated the project to have an impressive 40 year mine life and is anticipated to eventually ramp-up to an 18 million tonnes per annum throughput, at which time it will become one of the world’s largest dry mining mineral sands operations.

Sheffield quickly moved to commence a Bankable Feasibility Study (BFS), appointing lead engineering group Hatch to undertake the task.

With just on $6.7 million in the coffers, Sheffield is well financed to complete the BFS before the end of 2016.

 “We appointed Hatch because they are probably the world’s leading pyrometallurgy and engineering consultants, which is a great opportunity for us with further improvements to the quality of our ilmenite anticipated,” McFadzean said.

“If we can improve the ferric-ferrous ratio of our ilmenite, we will have one of the highest grade ilmenites in the marketplace.”

In January Sheffield released a maiden Ore Reserve for Thunderbird, coming in at 683 million tonnes at 11.3 per cent heavy mineral (HM), which not only fully supports the PFS outcomes, but also confirmed Thunderbird as one of the largest undeveloped zircon-rich mineral sands deposits in the world.

“The release of the maiden Ore Reserve basically closed out the Thunderbird PFS, allowing us to progress to the BFS,” McFadzean explained.

During the BFS, Sheffield will be examining all opportunities to improve the Thunderbird project’s financial returns.

The study will particularly focus on where the company can make capital and operating expenditure reductions and savings, which it anticipates will be identified through engineering and sourcing avenues.

It will also examine where optimisations can be made in the area of project definition in order to provide the best outcomes in terms of CAPEX, OPEX and risk.

The BFS will also look at process design, focusing on increasing processing efficiency, as well as product quality and recoveries.

The study is currently undertaking metallurgical test work and flowsheet development to confirm the PFS outcomes on a larger, 30-tonne sample using full scale equipment, materials handling, thickener design and tails co-disposal studies, and to provide market offtake samples.

“In concert with the preparation for the BFS, we are continuing Native Title negotiations and are making excellent progress towards securing environmental approvals,” McFazdean continued.

“The long-life nature of Thunderbird has resulted in the project being designated ‘Lead Agency’ status with the Western Australian Department of Mines and Petroleum.

“This is a huge vote of confidence in the project and supports its significance and the long-term benefits we believe it will deliver to the state and the communities of the Kimberley.”

Sheffield recently added to the value of the Dampier mineral sands project with the discovery of the Night Train mineral sands deposit just 20km to the southeast of Thunderbird and within 2km of the proposed Thunderbird haul road.

Recent scoping level metallurgical test work undertaken on a drill sample composite from the mineralised zone at Night Train demonstrated the existence of high-quality zircon, which meets ceramic grade specifications, can be produced using conventional mineral sands processing techniques.

The tests show the Night Train heavy minerals to be low in iron contamination with zircon able to be produced without an enhancing leaching stage.

The grain size of the zircon and HiTi products are fine to medium grained with a D50 of 79 microns.

The composite sample averages from Night Train returned 4.7 per cent HM containing a high 17.4 per cent of zircon in the heavy mineral assemblage.

The results have encouraged Sheffield to carry out further work at Night Train, which will include follow-up exploration drilling and more detailed metallurgical test work.

“We are very excited about the early results we have been able to achieve at Night Train,” McFadzean said.

“Producing high quality zircon from the initial scoping metallurgy using conventional processing techniques was an ideal outcome, which provides confidence to proceed with follow-up drilling and further test work during the coming dry season.

“Night Train is a significant new discovery for Sheffield as it emphasises the excellent exploration potential of the Canning Basin.

“Thunderbird, without a doubt, remains our primary focus, however a new discovery such as Night Train demonstrates that by targeting additional zircon-rich deposits we can underpin shareholder growth while supporting our long-term product supply strategy for this exciting new mineral sands province.”

Sheffield Resources Limited (ASX: SFX)
…The Short Story

HEAD OFFICE
Level 2, 41-47 Colin Street
West Perth WA 6005

Ph: + 61 8 6424 8440

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

DIRECTORS and MANAGEMENT
Will Burbury, Bruce McFadzean, Bruce McQuitty, David Archer