Mike Jones – Impact Minerals
ONE OFF THE WOOD: Impact Minerals (ASX: IPT) managing director Mike Jones dropped in to tell us about the company’s projects in Botswana and its increased stake in Invictus Gold (ASX: IVG).
Impact Minerals has been in Botswana for some time. What are the projects you have been working on?
We have two projects in Botswana. The first of these is the Botswana uranium project, which covers around 26,000 square kilometres.
We have owned that ground for six years; it is 100 per cent-owned by Impact Minerals.
About 12 months ago we discovered a very large multi-metal alteration system that contains uranium at the Red Hills prospect; however it also contains low-grade rare earths, lead, zinc and silver plus a lot of other metals that indicates it could be a potential uranium-rich iron-oxide-copper-gold (IOCGU) system.
Was that discovery a surprise, particularly the size it has turned out to be?
It was. We were actually looking for Athabasca style high-grade uranium deposits similar to those in Canada and which there are very strong indications of within the region.
However, when we commenced drilling this particular area of the Red Hills prospect we discovered what has turned out to be a very large alteration system of something quite different.
How large?
It extends over an area of least 1.5 kilometres by one kilometre. We have already defined it to be 200 metres thick and it remains open in all directions.
Did that bring about an instantaneous shift of focus for the company?
It did lead to a very quick change of focus once we realised what we had.
The next major stage of work we completed after the discovery was a comprehensive ground gravity survey covering 100 square kilometres centred over the Red Hill area.
That survey was extremely successful as it identified 27 anomalies, all of which scream out for some follow up work.
Of great interest to us was the fact that five of these anomalies are located very close to the area we have already drilled and two of them are actually within only a few hundred metres of the drilling.
We are excited that they could be the core of what might be a significant deposit.
What’s the plan form here?
The plan is to drill the gravity anomalies that we have identified to be of the highest priority.
We anticipate that drilling will be undertaken sometime during the first quarter of 2013, weather permitting as any exploration activity carried out in Botswana is subject rescheduling due to the country’s rainy season.
With the weather issue in mind we have deliberately taken the decision to drill the Xade project first – following the capital raising.
The Xade project is your second project in Botswana?
That’s correct. It is prospective for nickel-copper massive and disseminated sulphides.
It is of very similar geology and age to the Musgrave Province in Central Australia where the Babel-Nebo deposits were discovered by WMC in 2000.
It can also be favourably compared to the Duluth Complex in North America, which is one of the world’s great repositories of nickel-copper and PGE’s where there have been some extremely significant disseminated sulphide deposits discovered measuring in the billions of tonnes.
We consider that the Xade Complex ticks all the right boxes for both geology and age in this regard.
Have you received any other indicators Xade could live up to your expectations?
We have carried out a lot of detailed analytical and geochemistry work on two drill holes that were drilled by previous explorers several years ago.
This work has demonstrated the Xade Complex is fertile; it definitely contains copper sulphides of high tenor and also has clear potential to host a PGE [platinum group elements] deposit as well.
Because it is located in right in the centre of Botswana, weather and access conditions dictate that we are pretty much compelled to conduct our first drilling there.
Once the drilling at Xade has been completed, and subject to the weather, we will commence follow-up drilling at Red Hills in early in 2013.
Impact has just announced an increased stake in Invictus Gold (ASX: IVG), what brought that decision on?
Before the deal Impact owned 45 per cent of Invictus Gold, we have now increased that interest to 75 per cent.
We considered Invictus to be a very worthwhile investment for Impact as it was ridiculously undervalued at the time with a market cap of only one to 1.5 million dollars.
After raising $5.5 million through a placement and an underwriting agreement with foreign investors we decided to underwrite a rights issue with Invictus.
What does that mean for both companies?
It means we are now, by far, Invictus’ major shareholder and subsequently have gained exposure to the upside in any gold-copper exploration success the company may achieve in the future.
The company has a portfolio of projects located in Queensland and recently it acquired an option over a project in Turkey, both of which hold the potential for that anticipated exploration success.
Invictus currently has drill rigs operating in Queensland, which are following up a gold mineralised porphyry system that was identified late last year.
Is that work being conducted at the company’s Scartwater prospect?
That’s right. There are two targets being tested at Scartwater.
The first is the East Porphyry, where a 450 metre long diamond drill hole is planned to test previously discovered thick intercepts of low-grade gold mineralisation at depth.
The second target is the Central prospect, which is a soil anomaly measuring 250 metres long by 100 metres wide that has not previously undergone any drilling.
We have three RC holes planned for the Central prospect for about 500 metres.
Once we have completed that we intend moving onto the Retro Extended prospect in the southern Drummond Basin where drilling by previous owners encountered intercepts of up to 8m at 16g/t gold, 143g/t silver, 5.6 per cent copper and 7.6 per cent lead from 7 metres depth.
What can you tell us about Invictus’ Turkish delights?
We acquired the option to purchase 100 per cent of the Himmetdede South project in June this year. It is two km along strike from the Himmetdede gold deposit that contains about 800,000 ounces of gold and is slated for development in 2013.
Since then we have completed detailed soil geochemistry, from which we identified four priority areas for follow up work, one of which warrants drilling.
We are actually looking to commence drilling at this target before Christmas – again weather permitting and we have field crews on-site at present conducting follow up geophysical surveys to further refine the areas to drill.
Turkey is emerging as the latest ‘best to be in early’ destination.
It has become more attractive due to recent changes in the country’s Mining Act encouraging foreign investment.
Now foreign companies are able to operate a 100 per cent subsidiary company in Turkey, which is really opening up the country to further investment and exploration.
The Government recently announced a drop in the corporate tax rate for miners from 20 per cent to 10 to 12 per cent to be phased in over the next few years.
In reality there has been very little sophisticated, modern exploration carried out there over the last 20 to 30 years and we are looking to take advantage of that.