Rox readies to fire at Musket and Cannonball

THE INSIDE STORY: A good deal of recent commodity market commentary has held a particular fondness for the future prospects, both short and long-term, in relation to the prices of nickel and zinc.

There are, at present, a healthy number of nickel/zinc exploration plays hitting the radar screens of these well-informed analysts and among these is ASX-listed junior Rox Resources (ASX: RXL).

The company believes it is well placed to take advantage of any price increases in both these commodities, especially nickel.

Rox Resources recently announced a maiden Mineral Resource estimate for the Musket nickel sulphide deposit, which has substantially increased the company’s Fisher East nickel sulphide project mineral resource inventory by over 100 per cent.

The Musket mineral resource estimate comprises 2.1 million tonnes at 1.8 per cent nickel containing 37,500 tonnes of contained nickel.

Of particular note is 64 per cent of the Musket resource estimate is in the Indicated Mineral Resource category, using a one per cent nickel lower cut-off.

At a higher cut-off grade of 2.5 per cent nickel the Mineral Resource contains 10,100 tonnes of nickel with approximately 75 per cent Indicated.

The resource at this higher cut-off grade is 100,000 tonnes at 10.1 per cent nickel.

Total Fisher East project resources (Musket + Camelwood) now stand at 3.6 million tonnes at 2 per cent nickel containing 72,100 tonnes of contained nickel.

Indicated resources account for 52 per cent of the total resource.

 

“This maiden resource estimate for Musket is very important for us as it displays the continued prospectivity of the Fisher East nickel sulphide belt,” Rox Resources managing director Ian Mulholland told The Resources Roadhouse.

“It has taken the overall project resources to over 72,000 tonnes of contained nickel at a grade of two per cent nickel.”

An important aspect of the Musket deposit is that it contains a very-high grade core of approximately 100,000 tonnes grading 10.1 per cent nickel.

This lies close to surface and Rox has identified it to be an obvious economic driver for any planned future development.

“Having such a high percentage of the resource in the Indicated category demonstrates how good the continuity of the mineralisation is,” Mulholland said.

“We have previously said that deposits of similar style to Camelwood don’t usually occur in isolation, and we proved that by discovering Musket.”

Rox is confident in its ground position, which it considers to be very strong with the potential to discover a lot more nickel and continue to significantly grow the project resource base.

With a discovery cost so far of around 4.2 cents per pound of nickel, which is one of the lowest in the world, that confidence seems to be very well placed.

The Mt Fisher gold-nickel project is located 500 kilometres north of Kalgoorlie and covers an area of 658 square kilometres, 488sqkm of which is 100 percent-owned by Rox with the company holding an option to purchase 100 percent of the remaining 170sqkm.

Rox’s original target at Mt Fisher was gold, however its focus shifted after its discovery of nickel sulphides at the Camelwood deposit in December 2012 proved too significant to ignore.

“Our main focus in on the Fisher East nickel project, which is really all about trying to define a big enough resource to start thinking about developing a mining operation there,” Mulholland told The Roadhouse earlier this year.

“We only discovered the nickel just over 18 months ago, and the first thing we did was complete the drilling that allowed us to define the mineral resource of about 35,000 tonnes of contained nickel.

“Our focus now is on increasing the amount of contained nickel at the project.

“The grade is there, we have already established that, but it is important now to establish 100,000 tonnes of contained nickel to enable us to develop this project into a mine with a ten year mine life producing 10,000 tonnes of nickel per year.

“That would entrench us firmly in the top five nickel sulphide producers in Australia, placing us aside companies such as BHP Billiton, Western Areas, Independence Group and Panoramic.”

Rox recently completed a program of aircore drilling at Mt Fisher, which identified three new nickel sulphide target zones.

The aircore drilling consisted 138 holes for 8,083 metres and was carried out in order to explore numerous nickel sulphide targets the company had interpreted from airborne magnetics and electro-magnetics.

“We believe these three new high-priority targets hold great potential to deliver further nickel sulphide mineralisation,” Mulholland said.

The first of the new targets is known as Cutlass and is located is along strike four to six kilometres to the south of the Camelwood and Musket deposits.

 

The other two – known as Jim’s and Fisher South – are located further west on what Rox thinks could be a possibly dislocated portion of the Mt Fisher ultramafic belt.

Results from Cutlass included:

FEAC235:
6m at 0.18 per cent nickel, 181ppm copper, 20 ppb platinum and palladium from 56m;

FEAC240:
12m at 0.30 per cent nickel, 147ppm copper, 20 ppb platinum and palladium from 32m, including 1m at 0.51 per cent nickel, 330ppm copper, 24ppb platinum and palladium;

FEAC262:
4m at 0.31 per cent nickel, 53ppm copper from 91m.

Further drilling was carried out at Red Mulga, which confirmed additional anomalous nickel over a strike length of 600m, with results including:

FEAC219:
17m at 0.35 per cent nickel, 67 ppm copper, 34 ppb platinum and palladium from 24m;

FEAC241:
32m at 0.26 per cent nickel, 36 ppm copper from 24m;

FEAC202:
16m at 0.22 per cent nickel, 51 ppm copper from 16m.

Drilling at the Jim’s prospect comprised 13 holes for 804m.

Best results included:

MFAC074:
10m at 0.26 per cent nickel, 265 ppm copper, 9ppb platinum and palladium from 32m;

MFAC067:
4m at 0.20 per cent nickel, 527 ppm copper, 16 ppb platinum and palladium from 32m; and

MFAC073:
4m at 0.21 per cent nickel, 575 ppm copper, 28 ppb platinum and palladium from 32m.

Drilling at third new prospect, Fisher South entailed 26 holes for 560m, with best results including:

MFAC092:
2m at 0.20 per cent nickel, 139 ppm copper, 3 ppb platinum and palladium from 26m; and

MFAC084:
20m at 0.12 per cent nickel, 504 ppm copper, 18 ppb platinum and palladium from 22m

“Being able to identify these three new targets is very exciting,” Mulholland continued.

“The excitement stems from each anomaly possessing values similar to the aircore values we encountered to define Musket and Camelwood.”

Rox has declared its hand in regards to its intentions with Cutlass, Jim’s and Fisher South with a ground electro-magnetic survey to be undertaken to better define the targets at each prospect prior to RC drilling.

The Cutlass, Red Mulga and Fisher South prospects are located on tenements that are 100 per cent-owned by Rox while the Jim’s prospect lies on an Option to Purchase tenement.

Rox is now in the planning stages for a ground electro-magnetic survey to better define the anomalies before RC drilling.

The company anticipates both will be undertaken as soon as possible.

Rox Resources Limited (ASX: RXL)
…The Short Story

HEAD OFFICE
Level 1, 30 Richardson Street
West Perth WA 6005

Ph: +61 8 9226 0044
Fax: +61 8 9322 6254

Email: admin@roxresources.com.au
Web: www.roxresources.com.au

DIRECTORS
Jeff Gresham, Ian Mulholland, Brett Dickson

MAJOR SHAREHOLDERS
Drake Private Investments    3.8%
Rox Directors        3%

SHARES ON ISSUE
Approx. 745 million

MARKET CAPITALISATION
Approx. $39.5 million (at 11/9/14)