Blackham Resources receives Matilda mining approvals

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THE BOURSE WHISPERER: Blackham Resources (ASX: BLK) has received a number of approvals for the company’s Matilda gold project, located near Wiluna in Western Australia.

The company informed the market the WA Department of Mining and Petroleum approved both the Matilda and Wiluna Mining Proposals (including tailings dam designs).

Vegetation clearing permits have also been received over the entire mine plan, while the remaining Mining Proposal over the Williamson mine, which is scheduled to come on stream mining in the third year of operation, is well advanced.

Blackham was also granted the water extraction license over Galaxy by the WA Department of Water.

The Wiluna underground dewatering approvals remain in place and no objections were made to the Matilda and Williamson pit dewatering proposals.

The company lodged an amendment to the existing Wiluna Environmental License in February 2016.

“The company is working very closely with the Department of Environment and Regulation to ensure its timely approval,” Blackham Resources said in its ASX announcement.

“Blackham is currently on track to mobilise both the Matilda open pit mining contractor and the Golden Age underground mining contractor next month.

“Gold production from the Matilda gold project is on track for the Sept 2016 quarter.”

Email: info@blackhamresources.com.au

Website: www.blackhamresources.com.au

Doray Minerals signs farm-in with Rox Resources for Mt Fisher gold project

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THE BOURSE WHISPERER: Doray Minerals (ASX: DRM) has struck a farm-in Agreement with Rox Resources (ASX: RXL) to explore the latter’s Mount Fisher gold project, located in the north-eastern Goldfields of Western Australia.

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.

Doray said the Mt Fisher farm-in was another strategic exploration project for the company.

The company described the project to be a large contiguous land package over an underexplored greenstone belt with already identified gold mineralisation.

Doray went on to say Mt Fisher adds to its already highly prospective Horse Well JV with Alloy Minerals (ASX: AYR) and its Western Gawler farm-in in South Australia.

“We believe, given the geology, structural setting and results achieved to date, that there is the potential for discovery of a significant gold deposit within the project area and we look forward to working with Rox to advance the project,” Doray Minerals managing director Allan Kelly said in the company’s announcement to the Australian Securities Exchange.

The Mount Fisher gold project is located in the north-eastern goldfields region of Western Australia, approximately 230 kilometres north of the town of Leonora.

The 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.

Doray indicated it is eager to commence an immediate review and initial field reconnaissance of identified target areas within the project.

Initial geophysical and geochemical surveys will then be carried out to determine the potential for discovery within these new target areas.

“There was a high level of interest in the Mt Fisher gold project and we are delighted that a company with the credentials of Doray has chosen to partner with us to accelerate the search for a significant gold deposit in the area,” Rox Resources managing director Ian Mulholland said in his company announcement.

“This joint venture vindicates our view of the prospectivity of the tenements for gold and we look forward to a long and fruitful relationship with Doray.”

Email: investorrelations@dorayminerals.com.au
admin@roxresources.com.au

Website: www.dorayminerals.com.au
www.roxresources.com.au

Peel Mining drilling again in Cobar hotspot

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the inside story: When you’re a junior exploration play seeking that elusive company-making deposit it pays to have the right geology, but the location can be just as important in getting a discovery over the line. By Stephen Bell

Perth-based Peel Mining (ASX: PEX) looks to have both sides of the equation covered at the company’s two Cobar Superbasin prospects located in New South Wales.

The first being the promising Wirlong copper discovery and second its high-grade Mallee Bull copper-polymetallic deposit.

Follow-up drilling at Wirlong, funded by Peel’s farm-in partner, Japan Oil, Gas and Metals National Corporation, or JOGMEC, recommenced this month, setting the stage for the release of the eagerly-anticipated assays in June.

“At the end of last year we intersected nine metres of eight per cent copper, which included just under three metres at 20 per cent copper,” Peel Mining managing director Rob Tyson told The Resources Roadhouse.

“In the Cobar Basin proper, Wirlong is probably the most significant copper drill results out of the area since we discovered Mallee Bull four years ago, so we think it bodes pretty well.”

The location of the find also augurs well for tracking down a meaningful discovery as the Cobar region has a history of turning up high-grade mineral deposits and long-life mines.

These include CBH Resources’ Endeavour zinc-lead-silver operation, with pre-mined ore resources of about 45 million tonnes grading 14 per cent lead/zincZn, Glencore’s CSA (about 50Mt grading 3 per cent copper) and Newgold’s Peak mine (about 10Mt grading 7 grams per tonne gold).

Moreover, the Cobar district boasts excellent infrastructure and is populated by a supportive and skilled mining community.

So the Cobar locals will likely be watching the Wirlong drill results just as closely, if not more so, than the broader Australian investment community.

“We’re back there and have commenced an approximate 5000-metre drill program,” Tyson said.

“It is combination reverse circulation (RC) and diamond – we are trying to go as deep as we can with RC drilling and have quite a powerful drill rig on site to see if we can get to 500 metres-plus deep.

“The Cobar-style targets are generally quite deep and pipe-like and the prize is the high-grade, high-quality copper mineralisation.

“We’ve probably got about four weeks of drilling to complete the program.”

The work is following up two drill holes from late 2015 that intersected multiple substantial mineralised intervals at Wirlong, targeting the extensive copper and lead soil geochemical anomalies near old copper workings.

The mineralisation intersected to date has the typical geochemical, geological and mineral alteration assemblages of ‘Cobar-style’ deposits Peel is looking for.

Mineralisation from the two discovery holes occurs as sulphide disseminations, veins and veinlets, breccia, and massive sulphides.

The true width of mineralisation remains unknown at this stage however is thought to be sub-vertical in geometry.

Wirlong is a large prospect covering more than 2.5km in strike, comprising a package of intercalated, sheared and altered felsic volcanic rocks and sediments.

It is defined by the historic workings, a 2km-plus multi-element surface geochemical anomaly along strike, and coincident or semi- coincident geophysical anomalies.

“Wirlong is a really interesting target,” Tyson said.

“It is a really obvious alteration zone and outcrops as a topographic high, it is a bit of a ridge line that we are essentially drilling along.

“This ridge line is sheared and bleeding anomalous copper and lead geochemistry out of it; there are old copper workings along the ridge; and there is a strong magnetic anomaly associated with the area of interest.

“Basically it ticks a lot of boxes.”

At the end of the current follow-up drilling, JOGMEC will likely have completed its Stage-One earn-in: the expenditure of $4 million to earn a 40 per cent interest in the Cobar Superbasin project, which comprises 15 tenements covering more than 3,000 square kilometres.

“I anticipate that, by the end of June, they’ll have completed that initial stage,” Tyson said.

“JOGMEC then have the right to go to a 50 per cent share by spending another $3 million.

“We are optimistic that they may trigger Stage-Two quite rapidly after, hopefully, some positive results out of this follow-up drilling.”

The near-term intensive effort at Wirlong doesn’t mean that Peel’s other promising Cobar prospect, Mallee Bull, has fallen off the radar.

A 50/50 joint venture between Peel and CBH Resources, Mallee Bull is to the south of Wirlong and boasts a resource of about 4 million tonnes grading 3 per cent copper.

“That is a major discovery for the area – it is quite a large system,” Tyson said.

“So we are looking to go back and commence some work there from mid-year.

“We expect to have a meaningful budget, probably about $1 million on a combined basis, for the back half of the year which, timing-wise, should work pretty well.

“We’ll finish off the drilling at Wirlong over the next month and then, after a short pause, start gearing up to go back to Mallee Bull come July/August.”

“Most of the work will likely be directed towards finding additional mineralisation in order to bulk up the existing resource.”

Understandably, the two Cobar projects are Peel’s main focus at present, probably taking up about 80 per cent of the company’s time and effort.

But the company is still optimistic of working up a big gold resource in Western Australia at Apollo Hill.

Located about 50km south east of Leonora, Apollo Hill consists of a large, near-surface gold system, albeit at relatively modest grades.

Peel has just completed 1800 metres of RC drilling at the project to determine whether there is a reasonable chance of upgrading the current resource, which stands at 17 million tonnes grading 0.9 grams per tonne gold.

High grade results of 8m at 6.39g/t gold from 71m and 10m at 4.23g/t gold from 94m were returned indicating that this new drilling appears to have extended the strike of Apollo Hill by up to 250m further to the southeast, which bodes well for a potential upgrade to the existing resource.

“Even though Apollo Hill is quite low grade, it does occur at surface and is a fairly large system as it is – 505,000 ounces,” Tyson said.

“We are hoping that we can push it towards one million ounces.

There are processing mills nearby, including one at Gwalia but, depending on how the gold price pans out, Apollo Hill’s grade may not be robust enough to justify the 70 to 80km truck haul required.

“We’re really looking at it as a stand-alone venture,” Tyson explained.

“Getting it to a critical mass, based on a low strip ratio, low operating cost development.”

So, between Western Australian gold and copper in a New South Wales hot spot, Peel looks to have plenty of action ahead to whet the market’s new-found appetite for exploration stories.

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

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

Ph: (08) 9382 3955.

Rob Tyson, Simon Hadfield, Graham Hardie

MAJOR SHAREHOLDERS
Hampton Hill Mining NL and associates: 17.15%
Point Nominees Pty. Ltd.: 11.64%
Ariki Investments Pty. Ltd.: 8.72%
Rob Tyson: 5.30% 

Pioneer sets a fast pace in Lithium

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THE INSIDE STORY: If lithium is the metal of the moment then Pioneer Resources has timed its run into the light metal with consummate timing. By Stephen Bell

In early March Pioneer was diligently exploring three gold and nickel assets in Western Australia but failing to get much traction with investors.

A month-and-a-half later Pioneer has transformed into one of the more agile and asset-rich lithium players with a rapid-fire series of deals – starting with the exciting Mavis project in Canada and recently culminating with the acquisition of the Pioneer Dome project near Norseman in WA.

It means that investors in the Perth-based company will be treated to plenty of lithium-flavoured news in coming months.

Drilling at Mavis, an advanced lithium pegmatite exploration play boasting several excellent drill intercepts from 2012, is due to begin in June.

At Pioneer Dome, another lithium pegmatite prospect, a 4,000 sample soil geochemistry program is due to finish in May with drilling expected in the September 2016 quarter. 

Shareholders can also look forward to exploration programs this year at the company’s two other new WA lithium projects, Phillips River and Donnelly, alongside its promising gold and nickel ventures.

Pioneer managing director David Crook said the company recognised it had to move quickly into lithium, now recognised as a metal critical to emerging alternative energy sources.

Forecasts provided by Dudley Kingsnorth, a Professor at the Curtin School of Business and well-regarded local authority on the lithium market, suggest that demand for the metal this year will reach 160,000 tonnes from 5000t in 1990.

By the year 2020 demand may mushroom to 600,000t as new lithium battery factories come on line, Tesla power walls are commercialised and electric cars start rolling off assembly lines at an increasing frequency, the forecasts show.

“That would be nearly a four-fold increase in demand from now,” Crook told The Resources Roadhouse.

“Lithium is a little bit like aluminium a couple of decades ago: an unwanted commodity but all of a sudden they develop processing techniques and uses for it, so there is a step-change in demand.

“We are seeing that now in lithium with the battery technology.

“That’s why we have made sure we are near the front of the pack in terms of those exploration companies rushing to capture the interest in lithium.”

Pioneer’s own step-change didn’t happen by accident.

While nickel and gold remained the priorities until early March, moves were afoot behind the scenes much earlier.

Wayne Spilsbury, a director of both Pioneer and Toronto-listed International Lithium Corp., had sniffed a change in the wind and realised the urgency of Pioneer getting into the lithium space before it became too crowded.

Spilsbury suggested Pioneer form a strategic alliance with International Lithium and its Mavis Lake project in south western Ontario, Canada.

“Through that introduction we entered into an option agreement on Mavis,” Crook said.

The deal, in which Pioneer will explore the project using ILC’s existing Canadian-based technical team, marked the start of a hefty market re-rating of Pioneer.

“The share price reacted very strongly to Mavis and as a consequence we raised $1.6 million in a placement,” Crook continued.

“Based on that response we thought we’d better see what else was available from a lithium point of view.”

There followed a fast-paced acquisition spree, engineered by Pioneer’s team of consultants and technical staff who were able to sift through the flood of opportunities with practised eyes.

After announcing the Canadian entry on March 15 the company completed a blockbuster April, unveiling three new lithium projects: Phillips River in southern WA, Donnelly near Greenbushes, and Pioneer Dome last week.

But Mavis, covering 2,624 hectares near the town of Dryden and 300km from the Thunder Bay industrial centre, remains the most advanced exploration prospect.

Drilling by earlier explorers intersected complex spodumene-pegmatites with high lithium grades at the Fairservice and Mavis Lake prospects.

More recent drilling by ILC, during 2011 and 2012, returned very encouraging results, with 20 pegmatites identified to date in outcrop.

Individual outcrops vary in strike length from 11 metres to more than 240m, and range in thickness up to 12m.

Drilling included 6m at 2.53 per cent lithium oxide from 6m and 26.25m at 1.55 per cent lithium oxide from 152m (Fairservice) and 5.35m at 1.51 per cent lithium (Mavis Lake).

Pioneer may earn an initial 51 per cent interest through expending $1.5 million within 3 years, with the ability to go to 80 per cent.

Crook plans to visit Mavis in mid-May to finalise the due diligence and get a sense of the geology prior to the field work commencing.

June is the targeted month, although the exact timing depends on the changeable spring weather.

“They’ve had some storms,” Crook said.

“You can work there either in the dead of winter when everything’s frozen, or in summer after everywhere has dried out.”

Pioneer has access to the prospects – about 9km off the bitumen – using forestry tracks.

“The general access is very good but, of course, not when the ground is slushy, Cook explained.

Once the rain and ice abate, there will be plenty of eyes watching the activity at Mavis, which is shaping as a potential game-changer for Pioneer.

On the home front, Crook rates the new pegmatite field at Pioneer Dome highly, but there is also plenty to like at the two less advanced prospects in Donnelly and Phillips River.

The latter was pegged by Pioneer about 100km east of the Mt Cattlin lithium mine near Ravensthorpe and is considered prospective for lithium spodumene-bearing pegmatites.

Geochemistry sourced from Geoscience Australia and roadside sampling by an earlier explorer has indicated two standout geochemical anomalies, with a number of others warranting further investigation.

Donnelly, which is also prospective for lithium pegmatites, extends between 12 and 60km from the world-class Greenbushes lithium mine with tenements covering approximately 220 square-kilometres, mostly in state forest.

Pioneer is currently negotiating with WA authorities on ‘non-ground disturbing’ access and an environmental management plan, but expects to use existing forestry tracks to collect samples from the laterite cover.

Gold, meanwhile, is still high on Pioneer’s agenda, despite the urgent requirements of lithium.

“We have a very good gold project in Acra which, up until the lithium story started, was our flagship and I’m still not dismissing it as being the leader going forward,” Crook said.

“Acra consists of a group of tenements in WA’s Easter Goldfields that have been warehoused since the nickel boom.

“Previous owner Xstrata collected gold geochemistry as a by-product of its hunt for nickel sulphides, so Pioneer acquired a 30,000-sample soil geochemical base along a 20km-long gold anomaly.

“It is a very compelling series of targets running through there and we plan on allocating a reasonable budget to gold exploration this year and next.”

Nickel also remains on the company’s books courtesy of the Blair Dome project in the eastern goldfields and Fairwater in the Fraser Range, the remote region hosting the Nova nickel-copper project.

Fairwater was last drilled in November and likely to re-start later this year.

“That project is still very much alive,” Cook declared.

“We are the only company other than Sirius that has intersected ultramafic rocks in drilling out there.”

Pioneer Resources Ltd. (ASX: PIO)
… The Short Story

HEAD OFFICE
21 Ord Street
West Perth WA 6005

Ph: (08) 9322 6974

Craig McGown, David Crook, Wayne Spilsbury, Allan Trench

MAJOR SHAREHOLDERS
Lobster Beach Pty Ltd 3.3%
Xstrata Nickel Australasia Investments Pty Ltd 3.15%

Gold and Lithium lead Capital Raising Revival

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THE CONFERENCE CALLER: BDO partner natural resources James Mooney provided delegates at the 2016 RIU Sydney Resources Round-up with some thought-provoking insights into the fund raising activities of the junior sector for the first quarter of 2016.

Since 2013, BDO has been providing analysis in regards to the cash positions of exploration companies.

When it first began there were over 860 companies that qualified for the firm’s definition of an explorer, a number which has dropped to just over 740 today.

“As you would expect investor sentiment is very much going towards those companies that are in production, especially the traditional favourites such as gold,” Mooney told the conference delegates.

“But we are also seeing some interesting developments in the junior end of town…which we feel is quite positive.”

BDO’s most recent analysis included a look at capital raisings conducted by ASX-listed companies within the materials and energy sectors for the first three months of 2016.

This concluded that 198 companies raised capital amounting to approximately $579 million during this time.

Of particular note was the size of the capital raisings involved with over 90 per cent raising less than $5 million, with only five capital raisings over $20 million.

These were primarily private placements with right issues being second highest contributor.

“During Q3 2016, private placements was the most popular means of raising capital, with over 113 of the capital raisings completed via private placements,” Mooney said.

“The second most popular type of capital raising was through the issue of rights which made up of 41 of the total raisings announced in Q3 2016.

“Several companies announced capital raising programs through via debt through the issue of convertible notes.”

Diversified Metals and Mining contributed approximately 63 per cent of the capital raisings, with the new market darling of lithium playing a major role in waking up what has been of late a stagnant market.

Approximately 22 per cent of the capital raisings were conducted by companies focused on the market’s other main driver – that old stalwart gold.

“The interest in lithium companies continues to rise with Pilbara Minerals Limited (ASX: PLS) announcing the largest capital raising for the year 2016,” Mooney said.

“The company announced on 7 April 2016 its plans to raise $100 million through a share placement ($85m) and a share purchase plan ($15m).

“Proceeds from the placement and share purchase plan will be used to accelerate the development of its Pilgangoora lithium-tantalum project.”

January provided the largest capital raising for the quarter from lithium-focused Orocobre Limited (ASX: ORE) announcing its capital raising of $85 million.

February was a busy month with 75 announced capital raising, with the capital raising of $50 million announced by Beadell Resources (ASX: BDR) accounting for approximately one-third of the total amount of capital raisings for that month.

Over 43 per cent of the capital raising value of the quarter was announced in March amounting to $252 million.

Horse Well continues to slake gold explorer’s thirst

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THE INSIDE STORY: One important aspect separating Alloy Resources (ASX: AYR) from its contemporaries is that this junior gold explorer shines its spotlight on greenfield exploration.

Alloy’s main focus is the Horse Well gold project, located in the Warburton Mineral Field of Western Australia.

The Horse Well project is in a good neighbourhood, sitting in the northern most part of the Yandal/Millrose Greenstone belt that hosts a number of multi-million ounce gold projects, such as the Jundee, Bronzewing, and Darlot-Centenary gold mines.

The Horse Well portion of the greenstone belt seen limited exploration, mostly along the southern part, where Alloy and previous owners have identified JORC gold resources in near surface deposits.

This has resulted in a current JORC 2012 gold resource at Horse Well of 846,000 tonnes at 2.76 grams per tonne gold for 75,100 ounces.

Horse Well’s potential was highlighted when prominent WA gold miner and explorer Doray Minerals (ASX: DRM) struck up a Farm-in Agreement, under which it recently earned 60 per cent interest in the project following a two year exploration spend of $2 million.

Under terms of the Joint Venture agreement the project must have a further $2 million spent over the next 12 months, and Alloy has elected to contribute its 40 per cent to the cause.

Its ability to do so was enhanced by a recent raising of $1.32 million to professional and sophisticated investors.

“We think this is one of the best Australian gold exploration stories in the current market,” Alloy Resources managing director Andrew Viner told The Resources Roadhouse.

“We have one thousand square kilometres of contiguous tenements fifty kilometres north of Northern Star’s five million ounce Jundee mine.

“We’re controlling sixty strike kilometres of the Millrose Greenstone Belt, which is essentially the northern arm of the Yandal Belt, and in my opinion greatly under-explored.

“We saw strong potential for the unexplored country along this belt yielding new discoveries, all we needed to do was put the drill holes in the ground.”

Alloy’s confidence was rewarded when drilling carried out by Doray in 2014, encountered encouraging drill intersections at the Dusk til Dawn prospect of up to 65 metres at 2.6 grams per tonne gold, including 13m at 8.17g/t gold.

Subsequent RC drilling in September 2015 intersected thick zones of gold mineralisation, confirming Dusk ‘til Dawn as a new greenfields gold discovery.

Ongoing regional work undertaken by the JV identified a number of new targets within the project, including the Django, Warmblood South and Celia Shear areas.

“Up at Django in the northern part of the project, we infill air-core drilled a three kilometre long plus-100 ppb gold anomalous area from 400 metres spacing to 200 metre spacing in March and April this year, which has confirmed the trends we have identified there to be alive and well,” Viner said.

“Our understanding of the trend has changed slightly, insomuch that instead of the anomaly being one trend it has broken into two – being the east trend and the west trend.

“The key significance remains that these air-core results are very similar to what we saw at Dusk til Dawn in the early days – and that ended up being a great new gold discovery.”

Recent drilling at Django has shown the western trend extends over a strike length of at least 1.5km and a width of 300m.

Interpretation of results from aircore infill drilling has determined there to be two anomalies, described by Alloy as ‘pods’, situated within the trend.

Of these the southern one has emerged as the stronger returning results of:

HWAC 112
22 metres at 1.4 grams per tonne gold;

HWAC358
12m at 0.2g/t gold from 48 metres downhole (mdh);

HWAC396
4m at 1.1g/t gold from 44mdh; and

HWAC633
8m at 0.4g/t gold from 52mdh.

Drilling on the Django eastern trend demonstrated that it appears to break up into three subparallel zones within the larger three kilometre long zone.

The eastern trend, however, continued to return strongly anomalous results including:

HWAC395
8m at 0.5g/t gold from 60mdh;

HWAC636
4m at 0.5g/t gold from 60mdh; and

HWAC688
8m at 0.3g/t gold from 72mdh.

“The results from Django have been most encouraging,” Viner said.

“Particularly as the aim of the work was to refine the targets for future RC drilling programs.”

RC drill testing of Django air-core anomalies will be the initial part of an aggressive exploration campaign the JV has planned for the Horse Well project over the next nine months, as part of the required $2 million in JV expenditure during the 2016 calendar year.

The is anticipated to commence as early as May and will consist approximately 18 holes to a depth of 180m for a total of 3,240m with priority one holes testing four of the stronger air-core anomalies.

Other recent work involved drilling at Warmblood South, designed to test two geochemical anomalies identified by Alloy during previous exploration campaigns.

This encountered a range of lithology’s along the margin of a granitic intrusion.

Although the northern air-core pattern intersected limited anomalous results, with the best being 4m at 1.4g/t gold in HWAC421 from 60mdh, the JV believes the drill spacing of 80m leaves any potential mineralised contact zone poorly tested.

That being the case infill drilling is required to confirm anomalous zones and the dip of the contact and gold mineralisation.

Drilling of the southern soil anomaly at Warmblood South intersected anomalous results corresponding to chlorite and silica alteration and sulphides associated with the granite body. 

Best results from this target included:

HWAC537
3m at 1.8g/t gold in from 52mdh; and

HWAC538
4m at 0.7g/t gold in from 48mdh.

Drilling completed at the Celia Shear prospect was over five lines, on 80m spaced centres designed to test the southern continuation of the regional Celia Shear structure, which the JV has determined to host a number of gold deposits within the Millrose Greenstone Belt.

Drilling intersected an alteration zone adjacent to a contact between a granitic intrusion and mafic volcanic rocks.

Assay results for this drill program were still outstanding at time of writing.

The JV is keen to get back in and complete approximately 1,200m to 1,300m of deeper RC drilling beneath known gold mineralisation at the Warmblood prospect with the stated aim to define the tenor and geometry of gold mineralisation in the fresh rock.

This will be the first part of a renewed investigation of the established gold mineralised area including Mineral Resources at Filly and Palomino.

The exploration carried out to date on Horse Well has thrown up few surprises to the JV with the project behaving according to plan.

“It is very straight forward exploration,” Viner assured The Roadhouse.

“The fact Doray has recommitted to the project every 12 months since coming on board is testament to that.

“They now have 60 per cent of the project and they aim to establish a standalone million ounce area that would support a new one hundred ounce per year gold project.

“That’s what they’re here for and we strongly believe we are well on the way to achieving that aim.

“With the historical Resources in the ground and the new discoveries we have made at Dusk til Dawn and, hopefully, now at Django, it’s all heading in the right direction.”

Alloy Resources Limited (ASX: AYR)
…The Short Story

HEAD OFFICE
Suite 6, 7 The Esplanade
Mount Pleasant WA 6153

Ph: +61 (8) 9316 9100
Fax: +61 (8) 9315 5475

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

DIRECTORS and MANAGEMENT
Andrew Viner, Kevin Hart, Andre Marschke

MAJOR SHAREHOLDERS
Manafield Holdings 4.89%
Rojo Nero Cap Pty Ltd 3.81%
Wilson Walter S + MA 3.66%
Western Discovery 3.65%

Impact likes jam in the doughnut

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THE INSIDE STORY: It has been a difficult couple of years for mineral explorers but well-regarded Impact Minerals (ASX: IPT) is set for exciting times ahead: hunting potential gold-copper elephants in New South Wales by way of a major drilling program. By Stephen Bell

Starting in mid-May the company plans to drill between 10 and 12 priority targets – out of more than 30 generated so far – across four prospects at its Commonwealth project near Orange.

Impact has an exploration target of more than one million gold equivalent ounces at Commonwealth from multiple targets identified at depth and along trend from the known resource as well as new, untested targets discovered by geophysics and soil geochemistry over an area of eight square kilometres and growing.

In all the company boasts 50 kilometres of strike potential for two types of deposits: volcanogenic massive sulphides analogous to a Woodlawn-style orebody and porphyry copper gold style similar to Cadia-Ridgeway.

Impact Minerals managing director Dr Mike Jones told The Resources Roadhouse the company is well-placed to fund and execute the exciting May drill program.

 “One of the things that set us apart over the last couple of years is that we have actually maintained our exploration activity, and as a result have been able to sustain a good share price and market cap in that period,” he said.

“The majority was focused on the Broken Hill nickel-copper-PGE project, but is now increasingly on Commonwealth, the gold, silver, lead-zinc and copper project – both in New South Wales.

“We’ve generated some very high-grade drill results for those metals on both of the projects and we are now entering a phase of significant follow-up drilling, starting at Commonwealth and then back to Broken Hill later in the year.”

The company plans to drill up to 3000m of reverse circulation and diamond drill holes to test as many as a dozen targets at Commonwealth.

The work is expected to begin immediately following the closure of Impact’s $1 million Share Purchase Plan on or around May 16.

“We do have good money in the bank already but we wanted to give shareholders an opportunity to participate in what we think is potentially the most exciting drill program we’ve ever had at Impact,” Jones explained.

“We’re looking for extensions to the known deposit and resource at Commonwealth, and we have new targets to follow up at Silica Hill, Welcome Jack and The Doughnut.

“They all occur within a three kilometre radius of Commonwealth itself and there are indications that they could be part of one large, mineralised system.”

Impact has generated strong Induced Polarisation (IP) and soil geochemical  anomalies from its surveys over a large area of about 8 square kilometres.

“It all looks like it might be related to one large porphyry copper-gold system, and we think that might be in the centre of the Doughnut – the jam in the middle,” Jones continued.

“It’s called the Doughnut because of the circular type of soil geochemistry pattern that you get over porphyries, and we potentially might have that.

“These geological tell-tale signs are possibly related to a concentric set of fractures around the core of the buried porphyry.

“That’s where fluids leak out of and commonly over the very top of the porphyry you might not get a very strong geochemical or geophysical response at all.”

Several exciting targets have been generated at depth and around the known deposit at Commonwealth, where Impact has defined an initial inferred resource of about 100,000 gold equivalent ounces at a grade of 4.5 grams per tonne from surface.

This is an encouraging start to the project, as a potential starter pit with early payback may already have been found.

On April 18, Impact said that a re-interpretation of Induced Polarisation (IP) geophysical data at Commonwealth identified three new targets at the Silica Hill prospect and two new targets close to the Commonwealth deposit.

At Silica Hill, the company refined the position of three very strong chargeability anomalies.

These are, in part, coincident with a strong gold-silver-lead-in-soil anomaly with associated molybdenum, arsenic, thallium, mercury and selenium that covers many hundreds of square metres and is open to the northwest and northeast.

Meanwhile, at the southern end of the identified deposit, at Commonwealth South, mineralisation dominated by disseminated iron, zinc and lead sulphides was identified in the IP data.

A strong IP anomaly extends below the drilled boundary of the resource and is in part coincident with an interpreted down plunge extension of the deposit.

In addition a strong IP anomaly occurs about 200m west of the deposit in an area that has not been previously drilled.

“These two targets, which are in addition to other new targets recently identified in drill assay data and ground gravity data, will also be tested in the drill program,” Jones said.

Impact is continuing to generate more targets at the two other prospects, which are likely to be revealed leading up to the May drill program.

If the Commonwealth program turns up encouraging drill results, Impact is likely to be in the enviable position of being well-funded for follow-up drilling later in the year at both its NSW projects.

That’s courtesy of last year’s investment by Minderoo, the private company owned by Andrew Forrest.

“It gives Minderoo the right to farm into either or both of the Commonwealth and Broken Hill projects once we’ve spent $2.5 million on them, and we’ll reach that expenditure threshold at the end of the Commonwealth drill program,” Jones said.
“If they elect to proceed, they will spend another one million on each of the projects to earn a 19.9 per cent interest in both of them.

“So it is potentially two million in further funding.”

Although Commonwealth will be the priority in the near-term, Impact is still keen to commence follow-up work on the highly-promising drill hits from last year at Broken Hill.

Impact reported Drill Hole RHD012 at the Red Hill prospect intersected high grades of the rare platinum group metals rhodium, iridium, osmium and ruthenium over a 1.2m-side interval within an extremely high grade 3.5m wide intercept of palladium, platinum, gold, copper, nickel and silver.

The 3.5m interval, starting 50m below the surface, encountered 3.5m at 159g/t (5.3 ounces) of 6PGE+gold, 2.9 per cent nickel, 2.3 per cent copper and 14.5g/t silver.

“Impact hopes to return to its Broken Hill project later in the year to follow up these spectacular hits,” Jones said.

“We actually got the highest reported grades ever in Australia for a drill hole for platinum group metals.

“We’ve found the grades so it’s a matter of what tonnage we can find around it now.

“But if we could find more of that high-grade material, it wouldn’t take many tonnes to provide us with a mining operation.”

The exploration activities planned by Impact for the remainder of the year come amid a turnaround in market sentiment towards exploration companies, according to Jones.

“Things have picked up recently, people are raising money, especially with gold doing its thing,” he said.

“The last two months have seen a significant turnaround in the whole industry.

“There is a bit more confidence around that we’ve seen the worst.

“Hopefully this is the new normal.”

Impact Minerals (ASX: IPT)
…The Short Story

HEAD OFFICE
26 Richardson Street 
West Perth WA 6005

Ph: +61 (8) 6454 6666 

Fax: +61 (8) 6454 6667

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

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

MAJOR SHAREHOLDERS
Bunnenberg Family 28% 
Directors 7%

St George off to flying start at Mt Alexander

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THE INSIDE STORY: St George Mining (ASX: SGQ) has taken the name of a famous Christian saint – one usually pictured as an armoured knight slaying a mythical dragon from the saddle of his trusty steed. By Stephen Bell

After a flying start at an exciting exploration program, St George seems to be living up to its gallant identity by hunting down a hidden nickel-copper deposit south-west of the Agnew-Wiluna belt in outback Western Australia.

One of WA’s most heavily-backed junior nickel explorers courtesy of its high-grade Mt Alexander prospect, St George has just begun lancing the beast with an 11-hole diamond drilling program and has already scored some very promising hits.

The successful beginning reinforces the quality of Mt Alexander, a former BHP Billiton prospect that St George acquired 75 per cent of in late January.

The project’s rich potential has helped fuel a doubling of the company’s share price since the deal was finalised, in a tough market for juniors.

Investors also like the pedigree of St George’s management, led by executive chairman John Prineas and executive director Tim Hronsky, alongside a strong technical team led by two prominent ex-BHP geologists: exploration manager Matthew McCarthy and consultant Dr Jon Hronksy, a globally-recognised nickel expert.

The team has worked out a solid, methodical work program to test the best electromagnetic conductor targets at Mt Alexander – a proven high-grade nickel and copper discovery by BHP in 2008 at the Cathedrals prospect.

“Nickel is generally not flavour of the month, but we have high-quality assets that are attracting attention, particularly because we have high-grade nickel values of five per cent to eight per cent and copper of three per cent,” Prineas told The Resources Roadhouse.

The other critical feature of Mt Alexander is the shallow depth of the targets, making for inexpensive drilling and the potential for cheap open cut mining methods down the track.

“All the mineral occurrences that we’re seeing are from 30 metres below surface down to about 100 metres – open pittable for mining and very different to the underground mines that you often see with nickel,” Prineas said.

“We don’t have to drill 500 metre-deep diamond holes, or dig declines to mine the stuff.”

But the proof is always in the assays – in the case of St George the 1,425m drilling campaign at Mt Alexander that began in mid-March.

The program is testing eleven EM conductors at the Cathedrals and Stricklands prospects that coincide with magnetic anomalies for massive nickel‐copper sulphide mineralisation.

It has got off to a strong start – the dragon is not tamed yet but the knight in shining armour is closing in.

Nine days after the commencement of drilling, St George reported high-grade intervals of nickel-copper sulphide mineralisation in two of the EM targets at Cathedrals, with massive nickel-copper sulphides discovered 30m below surface.

Drill-hole MAD15 intersected approximately 9m of sulphide mineralisation from 22.4m to 31.34m, including 2.17m of heavy disseminated and stringer sulphides and 1.17m of massive nickel-copper sulphides.

Based on analysis of the drill core at 10 centimetre-spaced readings using a portable X-ray fluorescence (XRF) device, the nickel values in the massive sulphide interval ranged from 6.7 per cent nickel to 10.9 per cent nickel for an average 8.9 per cent nickel.

Copper values ranged from 1.24 per cent to 5.85 per cent for an average of 3.2 per cent over the interval.

MAD16, meanwhile, intersected 9.5m of sulphide mineralisation from 51.7m to 61.25m, including 2.25m of moderate-heavy disseminated and blebby (bubbly-textured) sulphides with multiple massive sulphide stringers from 59m.

The stringer and blebby sulphides have nickel and copper values up to 10 to 15 per cent nickel and 10 to 15 per cent copper based on the XRF analysis.

Portable XRF analysis is able to detect base metals, like nickel and copper, and is regarded as a reliable tool for estimating metal grades in massive sulphides.

St George cautioned that the XRF values are indicative only and need to be confirmed by laboratory assays, due out in a couple of weeks.

Nevertheless, Prineas was excited about the early progress and the outlook for more positive hits over the next month or so.

“With multiple EM conductors still to drill, the potential for more discoveries is high,” he said.

“We are completing a hole roughly every three days so hopefully we’ll have some more news very soon.

“There are still seven holes to go so there is quite a bit of news-flow left in this program.

“And, depending on results of the assays and computer modelling, the drilling may turn into an ‘ongoing’ exercise.

“We need to finish the current range of targets and process the results.

“If one of them deserves an immediate continuation of drilling, we’ll do that, otherwise we’ll pause and design another drill program to test further conductors that we are identifying.”

At present the focus is Cathedrals where a rig is drilling a separate, much deeper, EM conductor target at 160m.

“If this one hits the goods it will prove another sort of mineralised zone in the area,” Prineas said.

After the current hole, St George plans to move to the Stricklands prospect, about 600m west of Cathedrals, where the company will target six untested conductors in a virgin area.

“It will be the first ever drilling so we have a good chance to make a new discovery at Stricklands,” Prineas said.

The company is also excited by several new EM targets identified at the Investigators area, to the west of Stricklands, especially Anomaly 2 – regarded as a standout target for massive nickel-copper sulphides.

“Anomaly 2 is three-times stronger than anything else found out there, so it is extremely interesting and could represent a higher-grade and/or larger mineral body,” Prineas said.

Drilling of the target may begin in June.

St George’s 25 per cent Joint Venture partner at Mt Alexander is major WA nickel producer Western Areas, which is currently looking for new production sources outside its core Forrestania operations.

As yet Western Areas has made no public statements about the Mt Alexander, drilling, but there is little doubt that Western Australia’s biggest locally owned nickel producer is keeping a close eye on proceedings.

Notably, the company included St George’s latest update on its ASX news feed to keep shareholders in the picture.

Western Areas is also a shareholder in St George, as a result of it being granted 3.5 million shares in January for agreeing to not exercise its right of pre‐emption over BHP’s interest in Mt Alexander.

Moreover, Terry Streeter – former chairman of Western Areas and regarded as an astute nickel investor – also owns shares in St George.

But it is not only nickel and copper that are attracting some heavyweight investors to the company.

Drilling is due to start at St George’s East Laverton gold project in either late May or early June.

“It is a good target in the right neck of the woods,” Prineas said, referring to the project’s location in a broader region boasting two recent world-class discoveries: Tropicana (at 8 million ounces-plus gold) and Gruyere (5 million ounces-plus).

“Our ground is under-explored and with some structures that are very favourable for gold mineralisation,” Prineas declared.

“So anything is possible there.”

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

HEAD OFFICE
Level 1
115 Cambridge Street
West Leederville WA 6901

 Ph: + 61 8 9322 6600
Fax: + 61 8 9322 6610

Email: info@stgm.com.au

Web: www.stgm.com.au

DIRECTORS
John Prineas, Tim Hronsky, Sarah Shipway

MAJOR SHAREHOLDERS
Impulzive Pty Ltd: 7.03%
John Prineas: 6.38%
Oceanic Capital: 4.73%

S2 Resources encounters high-grade gold at Nanook

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THE DRILL SERGEANT: S2 Resources (ASX: S2R) has completed a round of infill aircore drilling of a gold bearing gravel layer at the Nanook palaeochannel, located in Western Australia.

S2R claims the drilling has verified the continuity of gold mineralisation previously identified in wider-spaced drilling by Sirius Resources, and has also defined a coherent subzone of high-grade gold in gravels at the base of this palaeochannel.

The drilling also intersected high-grade gold mineralisation in basement rocks along strike from the high-grade gravel, which the company thinks may be the source of the gold in the channel.

S2R recently completed an 82 hole aircore program at the Nanook prospect, 6 kilometres along strike from Monsoon and 10 kilometres from Baloo, with the dual aim of verifying the continuity of previous broader spaced aircore drilling results, which had defined an extensive zone of gold contained in quartz gravels.

The drilling also aimed to identify possible local bedrock sources for this gold.

Several holes intersected gold mineralization in gravels at the base of the palaeochannel, and in some cases also in the weathered bedrock immediately beneath it.

Results included:

SPBA3817

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

SPBA3810

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

SPBA3818

11m at 0.93g/t gold from 44m to EOH;

SPBA3826

12m at 1.03g/t gold from 40m to EOH;

SPBA3827

12m at 0.76g/t gold from 24m to EOH, including 4m at 1.82g/t gold from 28m;

SPBA3857

28m at 0.81g/t gold from 28m, including 8m at 1.99g/t gold from 36m; and

SPBA3866

1m at 1.34g/t gold from 22m to EOH.

“This drilling has confirmed the continuity of gold mineralisation in gravels within the Nanook palaeochannel, which represents an extensive accumulation of gold,” S2R Resources said in its ASX announcement.

“The presence of gold mineralisation in a similar geological setting (ie, a sheared shale-basalt contact) along strike from Baloo and Monsoon suggests that this is a potentially important mineralised trend.

“A reverse circulation (RC) drill program, co-funded by the Government of Western Australia under the Exploration Incentive Scheme (EIS) will investigate the potential source of gold in the palaeochannel.

“RC drilling is scheduled to commence in mid-May.”

Email: admin@s2resources.com.au

Website: www.s2resources.com.au

Lithium Australia Eyes Port Hedland for Sileach Plant

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THE INSIDE STORY: If Lithium Australia (ASX: LIT) managing director Adrian Griffin has his way, the Perth-based company will soon revolutionise the processing of hard-rock lithium ores.By Stephen Bell

Around the middle of 2016 a pilot plant in New South Wales will begin trials of the company’s trademarked ‘Sileach’ process, designed to recover lithium from silicates without the expensive roasting step that has long been the mainstay of processing silicate lithium ores, including spodumene.

Due for completion in August, the pilot testing will provide data for a study on a full-scale Sileach demonstration plant to be built in Western Australia, probably at Port Hedland.

A commercial decision to build that plant, expected to cost about $20 million, could be taken as early as December.

“We would hope to have most of the data from that series of pilot runs – it will be processing more than one type of material from more than one location – by the end of August,” Griffin told Resources Roadhouse.

The testing will be carried out at the Lucas Heights facility operated by ANSTO Minerals, a division of the Australian Nuclear Science and Technology Organisation.

ANSTO Minerals has an intellectual property agreement with LIT as a result of the company this month winning a grant under the Entrepreneur’s Programme run by the Federal Government’s Department of Industry and Science.

The pilot runs are expected to treat spodumene ore from the Pilbara and mica ore from the Lepidolite Hill deposit, a joint venture between Lithium Australia and Focus Minerals near Coolgardie.

There is also the possibility North American ore will feature in the trial if current negotiations bear fruit.

“The aim is to then commit to a demonstration plant by the end of the year,” Griffin said.

“This would be contingent on Lithium Australia completing a prefeasibility study which confirmed Sileach as a sensible and commercial proposition.”

The demonstration plant would aim to beak-even on revenue by producing a couple of thousand tonnes of lithium carbonate and/or hydroxide per annum.

Lithium Australia is working with the WA government on potential locations for the demonstration plant, with Port Hedland its preferred location.

“You’ve got an up-and-coming spodumene production centre around Pilgangoora, which is only 120 kilometres south of Port Hedland,” Griffin said.

“That location, led by Pilbara Minerals’ project, plans to produce spodumene concentrates for export to China’s lithium processing facilities.

“But there will be ‘off-spec’ material – that won’t be commercial – that will be available for treatment and we believe that we viably process that material at much lower grades than can be tolerated with conventional roast/leach.

“There will also be lithium silicates, including micas and tourmalines, that we can recover the lithium from, so we believe that long-term there will be an abundant supply of lithium minerals available for processing in the Pilbara.”

Port Hedland’s other advantage is its role as a substantial industrial port able to import materials relatively cheaply.

“Port Hedland looks like a fairly sensible location, but we need to do the trade-off studies with other locations to verify that,” Griffin said.

A successful demonstration plant is likely to be needed to convince the market in Australia and overseas that Sileach can, indeed, lower the cost of lithium ore processing.

It is an integral step in project de-risking required for finance of a full scale processing facility.

LIT describes the technology as ‘disruptive’, i.e. a breakthrough or paradigm change in extracting lithium from any silicate mineral.

Sileach could make existing and new spodumene production more cost-competitive by reducing cut-off grades and expanding resources with no additional capital cost.

“Sileach could ‘catapult’ Australia into the forefront of the lithium battery boom by supplying optimal grade and purity material from low-energy production of lithium chemicals,” Griffin declared.

“It has the potential to make hard-rock production cost competitive with the huge lithium brine processors in South America.

“The breakthrough is removing the energy required for the processing steps that are normally used to convert spodumene to lithium chemicals.”

After the standard mining/crushing/crushing/flotation sequence, spodumene concentrates are usually roasted at high temperatures for several hours before cooling them and applying sulphuric acid.

“Most of the cost in that process is the energy,” Griffin explained.

“What Sileach does – for the first time – is recover lithium from the spodumene without the requirement to roast the spodumene first.

“Its great potential is to dramatically reduce the operating cost for converting spodumene to lithium chemicals.”

“Currently almost most spodumene concentrates from Australia are roasted in Chinese ‘converter’ facilities.

“They are, to a large extent, the bottleneck in the lithium chemical process – there is only a limited amount of installed conversion capacity whereas there is no shortage of supply at the resources end.

“But that material can’t get through to the end users, such as battery producers, because the bottleneck is the converters.

“If you take Sileach as being an alternative process, and set up a Sileach plant on your mine site, then you would bypass the converters and go straight through to the end users.”

But, first off, LIT needs to demonstrate the process is feasible at a commercial scale via the planned demonstration plant.

The company’s share price has doubled in the past month as investors sought out credible lithium stories, and LIT is well-placed to fund that important step.

Lithium Australia has cash and facilities available for drawdown amounting to about $10 million and is putting in place a bonus issue of 25-cent contributing shares.

“The drawdown capability on those will be $28 million,” Griffin said.

“We will have sufficient financial resources available over the next 12 months to fund anything we need to in the current business plan.

“That doesn’t mean we will be doing an immediate drawdown on contributing shares – far from it.

“It means, with those sorts of facilities in place, we are in a terrific bargaining position to get the cheapest available money because you don’t need to take just any deal that’s on the table.”

Alongside the Sileach test program, LIT is continuing exploration activities Australia-wide.

It recently established a foothold in the highly prospective Bynoe pegmatite field in the Northern Territory.

In WA, at the Ravensthorpe project, it has located at least 12 lithium pegmatites at Cocanarup, located only a few kilometres to the south-west of the Mt Cattlin lithium mine operated by Galaxy Resources and General Mining Corporation.

“With assays across the mineralised zone averaging 2.96 per cent lithium oxide, Cocanarup looks very promising indeed, Griffin said.

The company recently acquired ground adjacent to Greenbushes, the world’s largest lithium mine where it is targeting lithium micas, but the area is also prospective for spodumene in pegmatites.

Meanwhile, LIT is fielding “very significant commercial interest” in Sileach from the major global lithium producers,” according to Griffin.

They, along with the entire lithium industry, will be watching with interest the looming pilot tests at Lucas Heights.

If, the tests are favourable the odds will shorten for LIT becoming a key supplier to the emerging Li-Ion battery sector.

LIT believes the ability to recover lithium from silicates, without roasting, would again put Australia at the forefront of mineral processing technology, the importance of which may eclipse froth flotation.

Lithium Australia NL (ASX: LIT)
… The Short Story

HEAD OFFICE
Suite 3,
23 Belgravia Street,
Belmont WA 6104
 
Ph: +61 8 6145 0288
Fax: +61 8 9475 0847

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

DIRECTORS
Adrian Griffin, Bryan Dixon, George Bauk

MAJOR SHAREHOLDERS
Lanstead Capital LP 13.7%