Tuesday, October 31, 2017
THE INSIDE STORY: There is no argument that modern exploration techniques assist in the discovery of new deposits, but it also helps to be exploring in the right area.
Persistence also helps, and for coming up to eight years, Peel Mining (ASX: PEX) has been focused on the company’s Cobar Basin projects in New South Wales where it has made systematic discoveries of copper and base metals, most notably at the Mallee Bull and Wirlong deposits.
Peel has always had confidence in both prospects, however it was a recent announcement from the Wagga Tank prospect area that set the market abuzz.
Peel acquired tenements EL6695 and EL7226 last year and quickly designated Wagga Tank as the ‘prospect most likely’.
“When we conducted our initial review of the historic results at Wagga Tank we quickly realised the previous owners probably hadn’t given the area the attention it deserved,” Peel Mining managing director Rob Tyson told The Resources Roadhouse.
“Results from our own drilling this year provided the impetus for us to conduct further drilling, mainly because we thought we were on to something and the best way to confirm such opinions is to drill.”
The Wagga Tank drilling provided the company with plenty to think about, including:
11m at 7.15 per cent zinc, 2.31 per cent lead, 58 grams per tonne silver from 396m;
6m at 8.52 per cent zinc, 2.97 per cent lead, 12g/t silver from 282m; and
6m at 1.5 per cent copper from 92m.
“As part of the program we drilled step-out hole WTRCDD021, in what was then known as Wagga Tank South, basically to test coincident chargeable IP and magnetic geophysical anomalies,” Tyson explained.
“The IP chargeability looked particularly compelling, so we decided to drill and see what was there.”
The 456.6m hole was collared one kilometre south of the Wagga Tank deposit at what is now called the Southern Nights area, intersecting a broad zone of deformation, alteration and sulphide mineralisation, including a zone of variable zinc-lead-silver (sphalerite-pyrite-galena) breccia/stringer sulphide mineralisation between 390m and 410m downhole.
The hole was a combination of RC and diamond drilling, demonstrating highly anomalous zinc, lead, copper, silver and gold present over the greater part of the diamond tail (234.1m to 418m).
4m at 3.38 per cent zinc, 1 per cent lead, 13g/t silver from 289m;
3m at 3.07 per cent zinc, 1.23 per cent lead, 26g/t silver from 346m; and
20m at 2.40 per cent zinc, 0.8 per cent lead, 44g/t silver from 390m.
Peel quickly followed-up drilling of the WTRCDD021 discovery hole at Southern Nights, and at time of writing had completed four RC drillholes (WTRC031, WTRC033-035).
Assays are pending, but better hand-held XRF results included:
21m at 24.5 per cent zinc, 8.6 per cent lead, 102g/t silver from 194m in WTRC035
70m at 4.8 per cent zinc, 1.0 per cent lead, 18g/t silver from 128m (including 8m at 14.9 per cent zinc, 2.2 per cent lead, 15g/t silver from 188m) in WTRC033
The latest drilling was concentrated near WTRCDD021 with the furthest (WTRC031) just 160m south and 80m to the west.
WTRC031 (depth 185m) was designed to further test the Southern Nights chargeable IP anomaly, and to test along strike and up-dip of WTRCDD021.
The hole intersected a broad zone of strongly anomalous zinc-lead-arsenic-silver-copper from approx. 70m below surface through to end-of-hole at 185m.
WTRC033 (200m) was collared 80m west of WTRCDD021 to test immediately up-dip of WTRCDD021, intersecting a broad zone of strongly anomalous zinc-lead-arsenic-silver-copper from approx. 80m below surface through to end-of-hole (200m), intercepting the broad, strong zone of mineralisation highlighted above.
WTRC034 (199m) was collared 40m west of WTRC033 to test immediately up-dip of WTRC033.
WTRC034 intersected a broad zone of weakly anomalous zinc-lead-arsenic from surface to end-of-hole, which was interpreted to suggest the hole was positioned too far west to intersect mineralisation.
WTRC035 (216m) was collared 40m south of WTRC033 to test along strike of WTRC033.
WTRC035 intersected a broad zone of strongly anomalous zinc-lead-arsenic-silver-copper from approx. 40m below surface through to end-of-hole (216m).
The drillhole intercepted several strong zones of mineralisation including:
19m at 3.2 per cent zinc, 0.7 per cent lead, 21g/t silver from 126m and 21m at 24.5 per cent zinc, 8.6 per cent lead, 102g/t silver from 194m (as highlighted above).
Holes WTRC031, WTRC033 WTRC035 were all terminated prematurely in mineralisation due to high water inflows.
Diamond tail drilling is planned for each in due course.
“The true width of these mineralised intercepts is unknown due to the early stage of investigation, however, of importance, is that the mineralisation present in all drillholes appears to be related to the Vivigani Formation,” Tyson said.
“The Vivigani Formation is host to the mineralisation present at Wagga Tank.”
The Vivigani Formation a stratigraphic unit comprising volcanic sandstones, conglomerate, sedimentary breccia, interlayered low energy turbidites, epiclastics, rare felsic lavas, ignimbrites, and bioclastic limestone debris.
“The exciting aspect of these latest results is that they demonstrate Wagga Tank could be a much larger system than previously thought to be,” Tyson said.
“We have drilling at Southern Nights ongoing with a minimum of 10 additional RC drillholes planned in the near term.
“These drillholes will be designed to primarily test for strike extensions.”
The Southern Nights discovery garnered a good deal of market interest with the company’s share price enjoying an almost 50 per cent rise on announcement.
That doesn’t mean, though, the company has taken its eye of the Mallee Bull deposit, located near Cobar in western NSW.
Peel has also had the drill bit spinning at Mallee Bull, releasing results relating to prefeasibility work into the development of a high-grade, near surface T1 zinc-lead-silver lens.
Peel is undertaking a pre-feasibility study on the high-grade, near-surface zinc-lead-silver-gold T1 lens at Mallee Bull in Joint Venture (50:50) with CBH Resources.
The study is investigating conceptual development of T1 as a ‘dig and truck’ operation, where ore would be milled at CBH’s Endeavor mine approximately 150km away, where surplus milling capacity exists.
The PFS is looking at open pit and underground mining scenarios, followed by the development of an exploration decline to approx. 300m below surface to enable underground drilling of the primary Mallee Bull copper mineralisation.
The JV believes this scenario could allow for a reduction in total capital expenditure and the staged mining development of the Mallee Bull deposit.
Recent drilling under the PFS included 39 RC/diamond drillholes charged with infilling a maximum 20m by 20m drill spacing, and to define the limits of T1 mineralisation.
T1 resource definition drilling returned:
9m at 20.82 per cent zinc, 10.64 per cent lead, 338g/t silver and 1.91g/t gold from 88m;
9m at 10.80 per cent zinc, 6.89 per cent lead, 337g/t silver and 0.45g/t gold from 129m;
3m at 12.74 per cent zinc, 6.93 per cent lead, 263g/t silver and 1.25g/t gold from 119m;
10m at 7.10 per cent lead, 19g/t silver and 0.53g/t gold from 46m; and
3m at 5.98 per cent zinc, 3.33 per cent lead, 54g/t silver from 77m.
“We have received all the results for that drilling, which are currently being included in an updated geological and resource model for T1,” Tyson said.
“Prefeasibility work is continuing.”
Peel Mining Ltd. (ASX: PEX)
… The Short Story
34 Kings Park Road
West Perth WA 6005
Ph: (08) 9382 3955
Rob Tyson, Simon Hadfield, Graham Hardie