Rox unveils another hot prospect in Mt Fisher greenstone belt
THE INSIDE STORY: Today’s mineral exploration landscape is littered with companies seeking to uncover a share of Australia’s hidden treasures using technology, knowledge, experience, geological information and personal skills. By Ron Berryman
These tools of the trade along with a policy to patiently acquire, explore and develop have certainly helped place Rox Resources (ASX: RXL) in a strong position with two nickel sulphide projects in Western Australia’s northern goldfields – and a very strong bank balance.
Listed in 2004, Rox Resources has moved on from an early gold prospect near Menzies in the Eastern Goldfields to nickel and gold further north, following the company’s acquisition of the Mt Fisher gold-nickel project from Avoca Resources in 2011 and shortly after negotiated an Option to Purchase Agreement over the Fisher East tenements.
The deal gave the company 615 square kilometres and the mineral rights to the entire southern portion of the Mt. Fisher greenstone belt located 40 kilometres to the east of the prolific Yandal greenstone belt and 100km east of the main Wiluna belt.
During the 1930s small high-grade historic underground production occurred at the old Mt Fisher mine, while from 1987 to 1989 around 23,700 ounces of gold were produced at a grade of 5.3 grams per tonne gold from a small open pit.
Early exploration at Mt Fisher had some drilling success but it didn’t excite the market at the time.
Initially exploration was targeted at gold mineralisation, but in mid-2012 two VTEM (Versatile Time Domain Electromagnetic) anomalies in the Fisher East area were evaluated by air core drilling.
“We were conducting a rotary air blast (RAB) drilling program to explore some of the new targets when we found nickel and we now have two million tonnes at 2.5 percent nickel for 50,000 tonnes of contained nickel,” Rox Resources managing director Ian Mulholland told The Resources Roadhouse.
“That’s at a slightly higher cut-off grade than we were quoting before, mainly because of the low nickel price.
“We actually got halfway through a pre-feasibility study and decided that the nickel price was nowhere near where it needed to be so we’ve put things on hold for the time being, however 95 percent of that resource is indicated so we can pretty much move into pre-feasibility once things pick up.”
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Mulholland said the company was continuing to drill to test some of the other targets at Fisher East.
“We did some RC drilling (Reverse Circulation) and picked up some sulphides at Mt Tate prospect, so we are quite keen about that.
“We have just completed some diamond drilling at existing deposits and a couple of holes at a new prospect that we like the look of.”
The results from that diamond drilling include:
7.7 metres at 1.4 percent nickel from 693.3m at Camelwood, including 1.4m at 2.9 percent nickel;
2.3m at 2.4 percent nickel from 337.3m at Sabre; and
0.5m at 4.7 percent nickel from 523m at Musket.
Rox has taken much encouragement from the result achieved from the Camelwood hole, considering it to indicate mineralisation continues at similar grade and thickness 100m below the previous drilling limit.
The company was just as heartened by the result from the Musket hole, which intersected a highly faulted and remobilised zone with abundant nickel sulphide stringers indicating the potential for another (deeper) zone of significant mineralisation.
Earlier results at Fisher East were highlighted by 1m at 0.88 percent nickel from 121m within semi-massive sulphides and 2m at 1.45 percent nickel from 94m in transitional disseminated nickel sulphide at Mt Tate.
Mulholland said the drilling identified a seven metre thick massive pyrite zone at Mt Tate which sits approximately 20m stratigraphically above (downhole because the sequence is over-turned) the nickel sulphide zone.
“This massive pyrite zone was also intersected at Tomahawk and is significant because it shows that a strong sulphide source is present, which is an essential ingredient for the formation of nickel sulphides, Mulholland explained.
“The mineralisation at Mt Tate will be further investigated with downhole EM (electromagnetic) before contemplating deeper drilling.”
Apart from the ongoing drilling program at Fisher East, Rox has been busy elsewhere acquiring additional ground 70km due east of Mt Fisher.
The Collurabbie nickel- gold-copper-PGE project was formerly a joint venture operation between Western Mining Corporation and Falcon Minerals.
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“They found nickel sulphides at the Mt Olympia prospect in October, 2004, and Falcon’s share price soared but things went quiet because by March/April the following year WMC had been taken over by BHP and they basically shelved the project as they had just picked up the whole WMC nickel division – Kambalda, Leinster and Mt Keith,” Mulholland said.
“Things went very quiet and while some exploration was done it was very regional and was primarily focussed on finding a really big nickel deposit rather than a series of smaller deposits, so nothing has really happened for 12 years.
“We decided to pick it up because we could see that there were a number of anomalies along about 15 kilometres of strike.
“The Olympia deposit itself is still open at depth and we believed there were a lot of possibilities.
“We picked Collurabbie up rather cheaply – $25,000 cash and 7.5 million Rox Resources shares, which translates into about $125,000 to $150,000, depending on the value of the shares.
“It’s a really cheap acquisition and I think it’s got potential and will add to our resource base, we would really like to have about double the 50,000 tonnes at Fisher East.”
The other aspect of Rox’s venture at Mt Fisher is gold and as part of a one year farm-in agreement with Doray Minerals, $1,000,000 was spent on a gravity survey and an air core drilling program, however that company has decided not to continue.
“It was a regional program and we weren’t confident Doray was going to continue because they had already announced they were focussing on their development projects in the Murchison,” Mulholland said.
“We are quite happy to take it on now they have decided against continuing with the venture.”
Rox will now review the results of Doray’s exploration, particularly the zones of interest generated from the aircore drilling and elsewhere on the tenements before considering their next steps.
The company is not short of cash following the sale of their Teena zinc/lead project in the Northern Territory to Teck Australia for approximately $20 million with $16 million up front and a further $3.75 million payable within six years.
“We have banked that money and by the time we have paid all the advisors we’ll be sitting on about $15 million in the bank, while we will be doing some exploration we are not going crazy on the nickel and we might be spending some money on the gold,” Mulholland added.
“However, we are looking for a new project to add to our portfolio, to supplement what we already have – that has been quite a bit of our focus in recent times.
“We want a project that’s got a clear path to production that investors can see is going to be a mine.”
Rox Resources Limited (ASX: RXL)
…The Short Story
HEAD OFFICE
Level 1, 34 Colin Street
West Perth WA 6005
Ph: +61 8 9226 0044
Email: admin@roxresources.com.au
Web: www.roxresources.com.au
DIRECTORS
Stephen Dennis, Ian Mulholland, Brett Dickson