THE INSIDE STORY: How do you surpass making a significant copper discovery? By making a potentially even-more-significant zinc-lead-silver-gold discovery, sitting on top of it.
Copper-focused exploration play Peel Mining (ASX: PEX) came to prominence in 2012 when it announced the discovery of the Mallee Bull copper deposit, located within the Cobar Superbasin in central New South Wales.
Mallee Bull is part of the company’s Gilgunnia project (EL7461), a tenement holding of around 80 square kilometres, located about 100 kilometres south of Cobar in NSW. The project also hosts the May Day gold-base metal deposit (ML1361).
Peel Mining says it operates on a pretty simple philosophy: one that is difficult not to agree with for a junior explorer – to drill as often as it possibly can as this to be the best way to make discoveries.
This philosophy lead to the discovery of the Mallee Bull copper deposit, which lies adjacent to the historic 4-Mile Goldfield, after its initial identification as a coincident EM and magnetic geophysical anomaly in March 2011.
The company received early encouragement when subsequent preliminary RC and diamond drilling encountered silver-lead-zinc mineralisation.
Further drilling intersected a massive and stringer/breccia sulphide zone with strong copper-silver-gold-lead-zinc-cobalt values characteristic of major Cobar-style deposits.
This drew the attention of CBH Resources, a wholly-owned subsidiary of Tokyo-based Toho Zinc Co Ltd, and in May 2012 a binding Heads of Agreement was struck covering EL7461 and ML1361, which included the Mallee Bull deposit.
Under the agreement, CBH earned the right to a 50% interest in the project over a three-year period via staged $8.33 million expenditure on exploration and contribution to previous exploration costs incurred by Peel.
In March 2014, CBH Resources paid its final Farm-in payment in relation to the agreement, to earn its 50% interest, after which the two companies formed a 50:50 Joint Venture.
Drilling carried out during CBH Resources’ earn-in period confirmed Mallee Bull to be a deposit of some note, returning what were some of the best copper results reported anywhere in the world in 2012/13, including:
69 metres at 3.48 per cent copper, 34 grams per tonne silver, 0.14g/t gold from 533m;
53m @ 4.08 per cent copper, 42g/t silver, 0.22g/t gold from 470m; and
84m at 4.42 per cent copper, 38g/t silver, 0.14g/t gold from 575m.
The impressive nature of the results enabled the JV to establish a Resource for Mallee Bull of:
3.92 million tonnes at 2.7% copper equivalent (2.3% copper. 32g/t silver, 0.3g/t gold) for about 107 thousand tonnes of copper equivalent (90,000t copper, 3.97Moz silver, 43,000oz gold).
“CBH Resources farmed-in about a year after our initial discovery and Mallee Bull has, in my opinion turned into one of the best copper discoveries in Australia in recent times,” Peel Mining managing director Rob Tyson told The Resources Roadhouse.
“The main mineralised system at Mallee Bull is copper-rich and very high-grade – some of the mineralised intervals we hit a couple of years ago were amongst the highest grades reported anywhere in the world.
“We pushed the deposit to a high-grade copper Resource and have completed an in-house scoping study – but more recently we have gone back to exploration in order to add to what we have already achieved at the deposit.
“That has culminated in some high-grade zinc, lead, silver and gold mineralisation.”
Peel has announced some outstanding results from drilling carried out on what has been designated as the T1 target.
T1 is one of two strong chargeable IP areas Peel identified using a new form of testing survey – Orion 3D DCIP.
The Orion 3D survey defined T1 as a shallow (approximately 150m below surface), strong chargeable and low resistivity geophysical response.
It is also located in an area that had been subjected to hardly any previous drilling.
Initially, four holes MBRC013, MBRC016, MBRC017 and MBRC018 were drilled to test the T1 target.
MBRC013, MBRC016 and MBRC017 all intersected zinc-lead-silver mineralisation predominantly occurring as stringer sulphides.
MBRC016 provided a highlight of:
7m at 6.1 per cent zinc, 3.4 per cent lead, 76g/t silver and 0.25g/t gold from 131m.
MBRC018 returned an intersection of sphalerite-galena-pyrite rich massive sulphide mineralisation from 106m of:
10m at 15.8 per cent zinc, 7.6 per cent lead, 322g/t silver and 1.28g/t gold.
These results alone were enough to rouse the market from its Rip Van-Winklesque dozing, however Peel had more to come and quickly followed up with:
12m at 20.3 per cent zinc, 14.81 per cent lead, 308g/t silver and 1.59g/t gold from 83m, including 7m at 31.44 per cent zinc, 19.37 per cent lead, 440g/t silver, 2.53g/t gold from 83m;
6m at 10.57 per cent zinc, 4.81 per cent lead, 53g/t silver and 0.39g/t gold from 121m, including 2m at 26.65 per cent zinc, 11.88 per cent lead, 121g/t silver, 0.69g/t gold from 122m;
6m at 10.30 per cent zinc, 4.98 per cent lead, 159g/t silver, 0.76g/t gold from 95m, including 2m at 27.7 per cent zinc, 13.4 per cent lead, 430g/t silver, 1.9g/t gold from 96m;
4m at 8.21 per cent zinc, 3.35 per cent lead, 113g/t silver, 1.02g/t gold from 88m, including 2m at 14.11 per cent zinc, 5.7 per cent lead, 194g/t silver, 1.93g/t gold from 89m; and
7m at 21.39 per cent zinc, 12.74 per cent lead, 203g/t silver and 0.58g/t gold from 71m, including 5m at 29.54 per cent zinc, 17.52 per cent lead, 280g/t silver, 0.80g/t gold from 71m.
The question most likely to be asked is why this target wasn’t drilled earlier?
The reason is because sphalerite, galena and pyrite in combination are generally poor EM conductors, which made the zinc-lead-rich mineralisation Peel has intersected effectively invisible to previously completed EM surveys.
“We had a suspicion the mineralisation existed, but unfortunately we ran out of budget to test this area in previous rounds of drilling,” Tyson explained.
“The Orion 3D survey really lit this area up and the T1 target emerged as the most obvious to hit first.
“T1 is shallow, starting around 80 metres below surface with very strong chargeability, it remains open to both the north and the south and to date we have only drilled about 60 metres of 300 metres of strike.
“We have also only drilled around 60 metres of the gravity anomaly there that also measures around 300 metres.
“The shallow nature of the target did surprise us as previous EM work hadn’t given any indication that this was sitting there.”
The nature of the mineralisation, being of such high-grade, encouraged Peel to carry out a close-spaced drilling program, which it considered to be the best way to get an understanding of the deposit’s geometry.
Peel completed a total of 21 RC drillholes (MBRC013, MBRC016 to MBRC035) to test T1 with all drillholes intersecting zinc-lead-silver mineralisation to varying degrees, and others encountering sphalerite-galena-pyrite rich massive sulphide mineralisation, to within 50m of surface.
Peel plans to complete follow-up drilling at T1 when all relevant approvals are in.
Peel Mining Limited (ASX: PEX)
… The Short Story
U1/34 Kings Park Road
West Perth WA 6005
Ph: 08 9382 3955
Fax: 089388 1025
Rob Tyson, Simon Hadfield, Graham Hardie
Hampton Hill Mining and assoc 17.15%
Point Nominees Pty Ltd 11.64%
Ariki Investments Pty Ltd 8.72%