Mallee Bull at home in resource-rich environment

THE INSIDE STORY: Peel Mining (ASX: PEX) has commenced an infill drilling program at its high grade, near-surface T1 zinc, lead, silver lens at its Mallee Bull deposit near Cobar in Western New South Wales. By Ron Berryman

Excellent preliminary flotation metallurgical testwork results supported the company’s belief that the T1 prospect potentially represents an attractive early production opportunity ahead of the development of Mallee Bull’s predominant copper-silver-gold mineralisation.

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

“The high-grade zinc-lead-silver that we have got at T1 is very close to the surface and with this latest reverse circulation (RC) drill campaign of about 4,000 metres we are looking to update the Resource at T1 in advance of a prefeasibility study,” Peel Mining managing director Rob Tyson told The Resources Roadhouse.

“However, Mallee Bull remains Peel Mining’s number one project.

“We have also just completed a global Resource update that now includes lead and zinc mineralisation.

“The overall resource has grown by 65 per cent to approximately 6.8 million tonnes at 2.6 per cent copper equivalent and reflects the considerable exploration success that we have had at Mallee Bull since May 2014.

“Mallee Bull is primarily a copper deposit but also has good silver, gold, lead and zinc mineralisation.”

Tyson added that while Cobar was probably best known for copper mining it wasn’t unusual to find other minerals.

All of the mines in the region possess that make-up of metals, but it varies as to which ones are most important.

Located at the crossroads of the Kidman Highway to Queensland and the Barrier Highway to South Australia, copper was discovered at Cobar in 1869 and the importance of the mineral to the state’s economy resulted in it becoming known as ‘Copper City’.

Cobar is ranked second, only to Broken Hill, in terms of mining renown in NSW and has been a constant major exploration target zone over the years.

The town has suffered from the lack of a reliable water supply from the time of its establishment with the only supply coming from a single small earth dam but this soon proved inadequate for the developing mines and increasing population.

The Cobar Water Board was established in 1963 giving it the power to construct a pipeline and install pumping machinery to transport water from Nyngan to Cobar.

The first pipeline, a 300 millimetre diameter pipe, was constructed in 1963 followed by a second pipeline, 375mm diameter, laid parallel to the existing line in 1983.

Although the population of Cobar has, at times, reached 10,000 the present number is closer to 4,000, which is mainly supported by the mining industry.

Over the years mining in the region has produced major amounts of copper-lead-zinc-silver and gold plus minor quantities of by-products such as cadmium and antimony.

“T1 is very high-grade and discrete, but we do have some other good lead-zinc mineralisation elsewhere in the main copper dominant system,” Tyson said.

“It is reasonably common in these sorts of deposits that you get this zonation of metals.

“We anticipate this infill drilling program is going to underpin a pre-feasibility study.”

Peel Mining has been conducting ongoing metallurgical testwork on the lead and zinc with excellent results.

“Metallurgically the T1 deposit looks quite positive so the next step is to complete the infill drilling and remodel that part of the Resource from a pre-feasibility perspective,” Tyson explained.

A metallurgical drillhole that was recently completed at the T1 lens returned the prospect’s best zinc-lead-silver intercept to date of:

13.5 metres at 21.1 per cent zinc, 14.1 per cent lead and 268 grams per tonne silver from 82m.

Preliminary metallurgical testwork carried out on the zinc-lead-silver mineralisation yielded overall metal recoveries up to 90.3 per cent zinc, 92.3 per cent lead and 82.3 per cent copper, producing separate lead and zinc concentrates with grades of 55.6 per cent lead, 13.1 per cent zinc, 780g/t silver and 49.6 per cent zinc, 2.4 per cent lead and 75g/t silver respectively.

Full elemental analysis, including gold, is pending.

All chemical analysis was conducted at Endeavour’s mine laboratory facilities owned by Mallee Bull Joint Venture partner CBH Resources.

Tyson said the mining concept being developed for T1 was based around a dig and truck operation from Mallee Bull to the Endeavour mine north of Cobar, a trip of about 160 kilometres.

“We are looking at a small scale operation to get Mallee Bull into production at a relatively low capital cost, from where we can hopefully lower the risk scenario because we are not building significant infrastructure.

“We are basing it around a light presence with infrastructure and capital investment because the grade is very high and we’ll hopefully be able to generate some positive cash flow that can go back into the project, or a significant part of it for increased investigation of the mineralisation.

“We are examining both underground and open pit scenarios for T1.

“If it all stacks up, we would then consider driving a decline to deeper levels at Mallee Bull where the best mineralisation exists.

“One possible scenario could be driving a decline down to 300 metres for underground diamond drilling, which is a lot cheaper.”

Tyson said Peel Mining’s current timeline for the project was to finish pre-feasibility by the end of August and feasibility by the end of the year or early 2018.

“If everything goes well in terms of permitting and approvals, I’m hoping we might be in a position by the end of next year to be able to break the earth,” he continued

On the subject of local infrastructure, Tyson explained the Kidman Highway was only five kilometres from Mallee Bull, while the project sits juts 15km from the Moomba-Sydney gas pipeline, and at 100km from Cobar and the company has access to water.

“If we use a dig and truck method we won’t need much water, just enough for dust suppression,” Tyson said.

The Mallee Bull deposit, is located on an 80 square kilometre tenement owned by Peel Mining and 50 per cent Joint Venture partner CBH Resources.

Mallee Bull lies adjacent to the historic 4-Mile Goldfield and was initially identified as a coincident electromagnetic (EM) and magnetic geophysical anomaly in 2011.

Preliminary RC and Diamond drilling has been carried out to test this anomaly, which encountered elevated levels of silver-lead-zinc mineralisation.

Subsequent drilling the same year intersected a massive and stringer/breccia sulphide zone with strong copper-silver-gold-lead-zinc-cobalt values, all of which are considered to be characteristics of major Cobar-style deposits.

In May 2012, Peel and CBH Resources signed a binding Heads of Agreement giving CBH the right to earn an interest of up to 50 per cent over a three-year period via a staged $8.33 million expenditure on exploration and contribution to previous exploration costs incurred by Peel.

CBH Resources completed its final Farm-in payment in 2014.

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

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

Ph: (08) 9382 3955

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

DIRECTORS
Rob Tyson, Simon Hadfield, Graham Hardie