THE INSIDE STORY: A merger of ASX-listed stalwarts Trafford Resources and IronClad Mining has resulted in the creation of Tyranna Resources (ASX: TYX)
In project terms, Trafford Resources brought a great deal of value to the merged entity, in the form of a portfolio representing some nine years of exploration prospect accumulation, boasting an independently-rated value of around $30 million.
The task of getting the affairs of the new mining/exploration house in order fell to the Board of IronClad Mining until a recent ratification by a shareholder meeting for the change of name to Tyranna Resources.
IronClad Mining almost pushed the start button on its Wilcherry Hill iron ore project, located on the Eyre Peninsula of South Australia.
Even though it had received all major approvals for the mine in October 2013, IronClad found raising the $23 million capital required to commence stage one of the project difficult, which was exacerbated by the iron ore price crash.
“Had we pressed the button we would have been committing to a capital outlay, which would, in all probability, now be left as a debt,” Tyranna Resources executive chairman Ian Finch told The Resources Roadhouse.
“What that means now, for the new company, is that we have emerged debt-free with a fantastic asset waiting for its time to come.”
With a new name comes a new focus for the company, which has shifted its gaze from iron ore to gold.
Tyranna Resources sees its future resting on the back of its Jumbuck project located in the Western Gawler Craton of South Australia, covering approximately 7,100 square kilometres of highly-prospective and under-explored ground surrounding the million ounce Challenger gold mine operated by Kingsgate Consolidated (ASX: KCN).
Part of the Trafford legacy is a 53 per cent interest in a Joint Venture with Kingsgate for gold exploration surrounding the Challenger mine, which has so far identified over 300 gold anomalies that have yet to be fully investigated.
“The Jumbuck project is our way forward, even when we have so many other good projects such as our tin and manganese projects, elsewhere in South Australia” Finch said.
Jumbuck’s place at the top of the project pile resulted from five months of review and research that has increased the company’s knowledge and appreciation for the potential of the area.
“We have been a bit like a duck on water, appearing to be sitting calmly while we have been doing a lot of research work that has piled a great deal of new information into our data base,” Finch explained.
According to Finch the Gawler Craton is similar to most cratons world-wide, which are circled by what are called mobile zones.
“In short these are the areas where you get major plumbing systems – areas where you can find really big mines like Olympic Dam, Carapateena, and Prominent Hill,” he continued.
The three big mines identified by Tyranna have one important thing in common: they were all discovered on one side of Gawler Craton mobile belt.
Not much work has historically been carried out on the other side of the belt, simply because it was the Woomera prohibited Area, under the Federal Defence Force, and therefore off limits to earlier explorers.
The area was opened up around five years ago, which is when Trafford made its move taking out a large landholding and subsequently purchasing its part of the Joint Venture with Kingsgate from a company called Southern Gold.
“We are convinced the Challenger deposit does not just sit out in the middle of the craton on its own,” Finch declared.
Historic exploration work reviewed by IronClad identified over 300 targets, which are about the same or greater than the single point anomaly on which Challenger was discovered (185ppb gold).
Tyranna aims to bring a number of these targets into production, processing ore through the mill at Challenger as part of the JV with Kingsgate.
The field of 300 targets been narrowed down to eight – four Tier 3, Three Tier 2, and one Tier 1.
Third tier prospects include: Mainwood (4m at 9.5g/t gold), Atlantis (1m at 1.32g/t gold), Breakaway Bore (1m at 8.96g/t gold), and Black Knight (1m at 7.85g/t gold).
Second tier targets include the Campfire Bore prospect, which has been earmarked as the likely second prospect for production.
Intersections recorded at Campfire Bore include: 14m at 4.17g/t gold; 6m at 4.97g/t gold; 1m at 25.29g/t gold; 2m at 9.5g/t gold; and 8m at 3.5g/t gold.
“Campfire Bore is the only project that has had any drilling below 65 metres,” Finch said.
“That is why we feel the potential is greater there as some of that drilling encountered higher grade deeper ore.”
The second Tier 2 prospect is Typhoon – just to the south of Challenger and another that is yet to be drilled deeper than 65m.
Intersections recorded at Typhoon include: 7m at 6.01g/t gold; 8m at 5.5g/t gold; 1m at 33.67g/t gold; and 12m at 2.2g/t gold.
“Again, the economic intersections at Typhoon, as at Campfire Bore, are cohesive – they stick together – there is just not enough drilling here, which is something we intend to rectify,” Finch said.
The third Tier 2 deposit, Monsoon, is another prospect not drilled to any great depth – only 50m, however it has also returned cohesive intersections, including: 12m at 2.2g/t gold; 15m at 1.39g/t gold; and 3m at 3.03g/t gold.
The first deposit expected to be mined will be Golf Bore, another prospect to attract the attention of various explorers over time.
The company’s review of historical data suggested that a 77,000 ounce gold resource for Golf Bore had previously been established, however, not enough information could be found to support bringing that up into a JORC Code-compliant Resource.
The only Resource the company does have for Golf Bore is one Southern Gold defined of 3.26 million tonnes for 102,600 ounces.
“What we intend doing here is to strip away all the preconceptions about this prospect,” Finch declared.
“We are deconstructing it and then we are going to reconstruct it as a viable Resource.
“Whilst it has had a lower-grade boundary drawn around it, there are very clear high-grade areas – they are very discreet – and we believe those to be the shoots – similar to Challenger – coming through and coming close to surface.
“That is our prime target”
The next 12 to 18 months will be extremely busy for the new Tyranna Resources as it embarks on a determined drilling and exploration program designed to bring its pipeline of projects through to achieve a two million ounce inventory of gold.
“The first target is to get the near-surface ore mined and through the mill to pay for the rest,” Finch said.
“Under agreed circumstances we do have access, through the JV with Kingsgate, to the centrally-located Challenger mill, which is very important, as it brings all our costs down massively.
“As there has been very little drilling carried out deeper than 50 metres, we can see massive potential here and we have an area of some 7,000-plus kilometres in which to work.
“I believe this is potentially another Tropicana and we will be exploring to prove that because this area is polluted with gold – there is no doubt about that.”
Tyranna Resources (ASX: TYX)
…The Short Story
Level 2, 679 Murray Street
West Perth, WA, 6005
PH: +61 8 9485 1040
Fax: +61 8 0485 1050
Ian Finch, Neil McKay, Peter Rowe, Bruno Seneque
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Ian Finch 2.91%