S2 Resources: Gold, Gold, Gold from Western Australia
THE INSIDE STORY: Some companies take time to hit their straps, while others seem to make their presence known within very short time frames.
Since listing on the Australian Securities Exchange in October 2015, S2 Resources’ (ASX: S2R) ‘shake the tree’ ethos has ensured momentum and kept its news flow ahead of expectations.
No sooner had The Roadhouse written its last piece on S2, focusing on the progress being made on the company’s massive sulphide (VMS) style Skellefte project in Sweden, it released a swathe of results from its Polar Bear gold project located between Higginsville and Norseman in Western Australia.
The Polar Bear project covers the southern continuation of the St Ives and Zuleika shear zones, which are the major controls on gold mineralisation in the region.
There are no shortage of gold pundits out there willing to tell you that all the shallow WA gold deposits have been discovered and it’s always entertaining when somebody comes along to prove them wrong…again.
In their defence Polar Bear and S2’s adjacent land wasn’t exactly sitting above ground waving to passers-by, it actually kept itself well-concealed beneath the salt lake sediments and sand dunes of Lake Cowan.
However, it does cover more than 500 square kilometres of underexplored ground in a strong gold neighbourhood, located between the world class gold producing centres of St Ives and Norseman – two mining camps each having produced around 10 million ounces – and southeast of the two million ounce Higginsville gold operations of Metals X (ASX: MLX).
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The fun began in May 2016 when drilling at the Nanook prospect – one of three gold ‘hotspots’ S2 has identified over a 10 kilometre distance on a single trend at Polar Bear – confirmed the continuity of gold mineralisation previously identified in wider spaced drilling carried out by Sirius Resources, the company taken to much success by S2 managing director Mark Bennett.
Several holes of an 82 aircore drilling program intersected gold mineralisation in gravels at the base of the Nanook palaeochannel, and in some cases also in the weathered bedrock immediately beneath it.
Results from this program included:
SPBA3817
16 metres at 51.3 grams per tonne gold from 44m to end of hole (EOH), including 4m at 203g/t gold from 48m and 1m at 1.56g/t gold from 59m to EOH; and
SPBA3810
16m at 1.63g/t gold from 40m, including 4m at 4.69g/t gold from 44m.
S2 quickly followed up the drilling results by defining an Initial Mineral Resource estimate for Nanook of 2.2 million tonnes at 1.2g/t gold for 84,000 ounces of gold.
“Identifying 84,000 ounces of transported gold in the Nanook palaeochannel was a good result in its own right but the big question remains to be answered of, ‘where has it come from’?, Mark Bennett told The Resources Roadhouse.
“The next step is fairly clear, in that we have to find the source of this gold and when we do, determine how much of it remains intact.
“In this sense the Nanook palaeochannel resource represents a very big geochemical anomaly.”
Bennett has previously told The Roadhouse that S2 is not discounting possible early monetisation of Baloo from a number of options available, including nearby toll treatment, a heap leach operation or even the sale of the currently defined oxide part of the deposit.
The company has already established a maiden Mineral Resource estimate for Baloo of 2.17 million tonnes at 1.8 grams per tonne gold for 123,000 ounces of gold using a 0.8g/t cut-off from just 2m below surface down to about 100m.
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The deposit turned a few more heads recently with the release of positive outcomes from various studies relating to a potential future mining operation.
Studies completed include: Metallurgy, geotechnical studies, hydrological and water management studies, and Environmental studies.
The initial metallurgical studies, comprising comminution, gravity recovery and leach recovery testwork, were undertaken on four representative composite samples of oxide and transition zone material at two different grind sizes (nominal 75 and 106 micron grind sizes).
The test delivered good metallurgical recoveries in all material types at a nominal 75 micron grind size, with a sizeable proportion (21.4% to 45.5%) of the gold being recovered by gravity prior to leaching and overall recoveries after 24 hours of leaching ranging from 89.4 per cent to 98.2 per cent.
S2 received encouragement from first pass testwork on the responsiveness of the Baloo gold mineralisation to extraction by heap leaching as an alternative to conventional processing via toll treatment.
Preliminary testwork carried out on oxide composite and a transition zone composite to heap-leach treatment was undertaken at two crushing sizes of 6.3mm and 12.5mm over a ten day period with gold extraction levels hitting 85 per cent and 80 to 82 per cent respectively.
“Gold recoveries continued to increase to the end of the ten day testing period, which we took as an indication gold extraction could increase further with greater residence time,” Bennett said.
“All the test results from Baloo were encouraging, especially the metallurgy tests they suggest that the oxide and transition zone of the Baloo mineralisation is amenable to heap leach extraction.”
More big news was to come, this time from the Monsoon deposit situated midway between Baloo and the Nanook palaeochannel deposit.
S2 announced the first round of RC drilling to be carried out at the Monsoon prospect intersected big high-grade gold mineralisation number to the north of and below high-grade gold intercepts encountered in previously reported aircore drilling.
Ten RC holes were drilled with those intersecting significant gold mineralisation combining with the previous aircore drill intersections to collectively define a large zone of gold mineralisation, which S2 has interpreted to be steeply dipping and north plunging.
Key intercepts included:
SPBC0313
A composite zone of 66m at 11.4g/t gold from 74m to end of hole (uncut) or at 4.2g/t gold (cut), drilled 20m north of the original high grade aircore intersections.
This zone included sub-zones of:
8m at 70.5g/t gold from 77m (uncut) or 11g/t gold (cut), including 4m at 139g/t gold from 77m (uncut) or 20g/t gold (cut);
13m at 8g/t gold from 90m, including 4m at 14.4g/t gold from 95m;
13m at 3.6g/t gold from 110m, including 2m at 13.5g/t gold from 117m; and
8m at 3.3g/t gold from 130m.
SPBC0320
A composite zone of 38m at 6.41g/t gold from 75m (uncut) or 1.78g/t gold (cut).
This hole was drilled 40m north of RC hole SPBC0313 and included sub-zones of:
8m at 26.7g/t gold from 75m (uncut) or 4.7g/t gold (cut);
9m at 2.1g/t gold from 90m;
3m at 1.11g/t gold from 103m; and
1m at 4.93g/t gold from 112m.
The results from Polar Bear underpinned the interest S2 received for a heavily oversubscribed placement to domestic and international institutional and sophisticated investors that raised $9.1 million.
The already well-funded company will be even more so with a bank balance reported to be sitting around $27.5 million.
Proceeds from the raising have been earmarked to accelerate S2’s ongoing exploration activities at Polar Bear and also at Skellefte in Sweden.
“The interest in the placement reflects an increasing level of recognition of the potential of the company’s assets,” Bennett said.
“Having such a strong balance sheet positions S2 to vigorously pursue its various opportunities unfettered by cash constraints, which is a highly-advantageous position to currently be in the junior exploration sector.”
S2 Resources (ASX; S2R)
…The Short Story
HEAD OFFICE
North Wing, Level 2
1 Manning Street
Scarborough WA 6019
Ph: +61 8 6166 0240
Email: admin@s2resources.com.au
DIRECTORS
Jeff Dowling, Mark Bennett, Anna Neuling, Grey Egerton Warburton.
MAJOR SHAREHOLDERS
Mark Creasy 29%
Employees 8%.
Global institutions 10%