Overland Resources hits development double
When a junior explorer locates one project that delivers an outstanding result and rapidly advances beyond initial expectations it could be considered lucky.
When that same company is able to locate another project with potential to do the same it should be considered very good at what it is doing.
Overland Resources acquired the Yukon base metal project in 2007 as an advanced stage exploration project.
At the time, however, it didn’t realise just how advanced the project was.
A thorough examination of historical data revealed a mineral deposit with an Inferred Resource of around five million tonnes at good grades and excellent potential to increase in size.
Overland went from a junior company with an advanced-stage exploration play to one with a serious development opportunity.
“Since then we have advanced the Yukon base metal project to the point where, early next year, we will be applying for mine permitting,” Overland Resources managing director Hugh Bresser told The Inside Story.
“It is now a case of working through the feasibility studies, clarifying capital and operating cost estimates, collecting all the environmental base line data and traditional knowledge, compiling it and then moving into a mine permitting phase.”
In its formative years of existence any junior exploration company will spend a great deal of its time, effort, money and resources just looking to drill a quality discovery.
Because of the work previously carried out on the Yukon project prior to its acquisition, Overland managed to avoid the high-risk and expensive exploration phase and was practically able to move it straight into development.
“By good planning, or good luck, we have managed to cut that timeline down significantly and all of our money has gone into development costs or drill-out work,” Bresser said.
“That’s been a huge bonus as it has allowed us to really focus on developing our skill sets and our Board structure so that everything is now targeted towards mine development and company growth.”
Overland originally secured a 90 per cent interest in mineral claims covering more than 60 square kilometres within the Selwyn Basin, located in Yukon Territory, Canada. The land package included the high-grade Andrew zinc deposit.
Overland has increased its ground position recently completing a claim staking program, which resulted in the expansion to its land holding to over 260sqkm.
The Yukon base metal project now comprises three distinct project areas along a major interpreted fault corridor.
The original central block is collectively now known as the Selous project area.
It includes the Andrew, Darcy and Darin zinc deposits, the latter two discovered by Overland in the last three years, as well as the Myschka, Pinnacle and Lad prospects.
The south-eastern area, comprising the claims recently staked over and around the Riddell prospect, is now referred to as the Riddell project area.
This area is known to host outcropping massive sulphide mineralisation and Overland is already working to define drill targets it expects to test later this year.
The company also secured claims over a new early stage target area to the west of the central blocks, called the Junction project that it believes is highly prospective for SEDEX style base metal mineralisation.
The Junction project caught Overland’s attention due to such attributes as:
– It contains a highly prospective geological sequence, with the same lithologies that host known SEDEX deposits in the Selwyn Basin;
– It is close to a deep seated structure; and
– It contains anomalous government regional stream geochemistry results.
Overland intends carrying out a first pass mapping and stream geochemical program at Junction later this year to evaluate the potential for the area to host SEDEX type mineralisation.
Overland has undertaken the technical, economic and environmental components of a feasibility study into the development of the Selous project, which it is working towards submission of a mine permitting proposal to the executive committee of Yukon Environment and Socio-economic Assessment Board.
The company expects the permitting process to take between 12 and 18 months with construction commencing shortly after mine permits are issued.
With the Selous project well advanced and moving towards mine permitting, Overland realised that once the permitting process is completed it would be faced with about a two year period of low activity.
“It’s going to be two years in mine permitting then we come back with a mine permit and then we’re looking at about another two years in construction,” Bresser said.
“So, right now we are probably around four to five years from production.
“Bearing that in mind we recognised the need to have – for the company to grow and for it to be strong – a portfolio of ongoing high quality projects.”
Overland’s project portfolio expanded once again when the company secured an exclusive option to acquire a 100% interest in 22 Crown Granted claims, covering 782 hectares, that comprise the Anyox copper project in northern British Columbia.
These claims encompass and include the former Hidden Creek copper mine, which was operated between 1914 and 1935 by Granby Mining, Smelting and Power Company.
During this period 21.8 million tonnes of ore was mined at an average grade of 1.57% copper, 0.17 grams per tonne gold and 9.5 grams per tonne silver.
“We had been looking for something to bring into the fold for quite a while,” Bresser said.
“Our underlying rule of thumb was that it had to be as good as, if not better, than what we already had, or at least hold the potential to match what we already had.”
Cominco (now Teck) acquired the project in 1936, shortly after mining ceased and retained ownership until 1990.
Cominco carried out sporadic exploration on the greater Anyox project area including EM and IP geophysical surveys, geochemical and geological mapping and more than 90 drill holes for approximately 21,000 metres.
Mineralisation at the Anyox copper project occurs in eight distinct massive sulphide bodies within a surrounding vein stockwork containing disseminated sulphides.
A significant amount of high-grade mineralisation has also been reported to remain in place at the Hidden Creek Mine.
Overland considers a good amount of this and the surrounding lower grade mineralisation may be amenable to open pit mining.
Other targets of significant exploration potential keep revealing themselves elsewhere on the project with mineralisation being identified on any number of other prospects.
These include North Hidden Creek showing, located 300m north of the former mine, where Cominco reported an intersection of 6.1m at 2.5% copper, 1.7g/t gold and 99.4 g/t silver in drilling in 1982.
“Moving our exploration team between the Selous project and Hidden Creek fits our model perfectly,” Bresser said.
“This is just such a hand in glove scenario where we are able to roll straight onto this project.
“Our confidence level that something worthwhile is at Anyox is high; we believe there is something there that the company will be able to do something with it.”
“If everything goes the way the world is supposed to go, we will end up with one project coming into production with another moving into permitting.
“We will then be a company with two very solid assets, both of which are moving forward with one funding the other.
“Suddenly you go from being an exploration company to one that is a truly emerging mid-tier production company.”
Overland Resources (ASX:OVR)
…The Short Story
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DIRECTORS
Michael Haynes, Hugh Bresser, Anthony Polglase, Gibson Pierce, Sias Els
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