S2 Resources (ASX: S2R) managing director and CEO Mark Bennett knows better than most how exploration success can create wealth and good times for shareholders.
Bennett is also aware of how that same success can create expectations, especially when those shareholders support your next endeavour.
S2 Resources was spun out of Sirius Resources, after the discovery and subsequent sale of the Nova nickel deposit.
S2 enjoyed exploration joy at its Polar Bear gold project in Western Australia, quickly establishing a Mineral Resource estimate for the Baloo deposit of 2.8 million tonnes at 1.8 grams per tonne gold for 123,000 ounces of gold at a lower cut-off grade of 0.8g/t gold.
As encouraging as that all seemed, Bennett had, as it turns out, much loftier ambitions for the company.
“We do have a number of shareholders on the register who went through the Nova experience with us, which they would like to see us repeat – and quite frankly who could blame them,” Bennett told The Resources Roadhouse.
“That’s the base level expectation, so we need to make some brave exploration calls to try and find monster deposits.
“That is why we lifted our gaze from the Goldfields to look internationally.
“We could find a few hundred thousand gold ounces, which is fine in a commercial sense, but in a company, corporate, share price sense it’s not what our shareholders want.
“So, we looked around at a few different regions, prepared to take bigger risks as we attempt to find a Nova-equivalent deposit.”
First port of call on S2’s global odyssey was the Skellefte district of northern Sweden, a prolific mining district populated by numerous major polymetallic zinc-copper-gold-silver volcanogenic massive sulphide (VMS) deposits.
The neighbourhood where S2 has approximately 805 square kilometres of ground, considered highly prospective for similar polymetallic VMS mineralisation and orogenic shear zone hosted lode gold mineralisation, includes the mining and smelting operations of global Swedish metals and mining giant Boliden.
S2 ran the first ever VTEM survey to be carried out over the area, generating 64 targets, which it subsequently raised to over 100.
“Our team in Sweden spent the last European summer, when there’s no snow on the ground, mapping, prospecting, sampling, as well as conducting some geophysics and geochemical sampling to complete as much as they could during that window,” Bennett explained.
“The aim was to get as much information as possible to enable us to make an intelligent decision on what targets to prioritise for the drilling season.”
The second hole drilled in S2’s Swedish winter drilling campaign, diamond core hole SBJK170008, confirmed continuation of VMS mineralisation a further 170 metres down plunge from hole SBJK170006, the last hole drilled during the company’s previous winter program.
The hole intersected an upper 2.7 metre thick zone of brecciated massive sulphides and a lower 10.1m thick footwall stringer zone.
Upper sulphide lens:
2.7m at 7.14 per cent zinc, 0.32 per cent copper and 8.9 grams per tonne silver from 301m; and
Footwall stringer zone:
10.1m at 0.52 per cent copper and 7.1g/t silver from 319.25m.
The extensive VMS mineralisation hit at Bjurtraskgruvan was substantial enough for S2 to believe it had affirmed the prospectivity of the belt, while at the same time validating its exploration methodology.
However, the thickness of the mineralised horizon wasn’t enough to divert its attention from the many other targets it still has scheduled for reconnaissance drilling over the winter season.
These include the Granbergs target, which S2 identified using induced polarization (IP) geophysics and base of till (BoT) infill drilling.
Granbergs sits along strike from a gold-rich VMS deposit mined by Boliden in the 1950s.
The Nasvattnet target is located outboard of the western end of the Skellefte belt and contains two known clusters of mineralised boulders comprising polymetallic sulphides, whose source has not yet been identified
Individual boulders have been shown to contain up to 3.85 per cent copper, 17.2 per cent zinc, 9.2 per cent lead, and 680g/t silver.
The Storgroven gold target was identified by prospecting and follow up BoT drilling around two known VMS occurrences on the company’s Petitrask number 402 lease.
Storgroven is centred 400m to the north of the known Aliden VMS occurrence.
BoT drilling defined a 1,000m long gold anomaly, which remains open to the northwest.
On the northwestern-most BoT line this anomaly is 500m wide and contains a distinct gold and silver bearing gossan concealed beneath four metres of glacial till, grading 1.1g/t gold and 8.2g/t silver.
Extensional and infill BoT drilling is in progress to better delineate the anomaly as a precursor to planning a diamond drill program scheduled for late March 2018.
S2 Resources other international commitments involve three active earn-in agreements with TSXV-listed Renaissance Gold on three Carlin-style gold targets in Nevada in the United States of America.
“The way things seem to operate in Nevada is that majors, such as Barrick, Newmont, and Kinross dominate the landscape and juniors pretty much work up prospects until they are ready for the big boys to take them off their hands,” Bennett said.
“The juniors tend to be very small, low-cap companies with plenty of good ideas but not much cash in the bank for exploration activities, something we recognised as a niche in the market.
“We noticed there weren’t too many juniors actually drilling, and what juniors were, didn’t have enough money and were over-reliant on the majors.
“We are smaller and flexible, which fits in with how they want to operate, but -most importantly – we still have enough money to carry out the activities they can’t.”
The Pluto project is located 50km north of Austin in Lander County, Nevada, on the north-south ‘Rabbit trend’ of gold deposits.
S2 can earn a 70 per cent interest by spending US$3 million by June 2022 and can withdraw after the expenditure of US$200,000 by June 2019.
The target at Pluto comprises a gravity anomaly interpreted to represent an uplifted block containing carbonate bearing stratigraphy known to be favourable for gold mineralisation.
Four deep reverse circulation (RC) holes were drilled as an initial ‘proof of concept program, however, no significant gold was intersected.
These four RC holes did intersect a thick sequence of Havallah Formation mudstones S2 believes forms a hangingwall seal to the more favoured Antler sequence host-rocks.
These results will be reviewed in early January prior to any further work being undertaken at Pluto.
The South Roberts (S2 earning 70%) project is in Eureka County, Nevada, 35km northwest of Eureka, on the Battle Mountain–Eureka trend of world class gold deposits and on the western margin of the northern Nevada rift in a similar setting to Barrick Gold’s 12 million-ounce Goldrush deposit to the north.
The Ecru (S2 earning 70%) project is 40km southeast of Battle Mountain in Lander County, Nevada, in the heart of the highly endowed Battle Mountain–Eureka trend and surrounded on three sides by Barrick’s Cortez District property, containing the Pipeline, Cortez Hills and Goldrush deposits with a collective gold endowment of approximately 50 million ounces.
S2 Resources is planning to drill its first programs on the South Roberts and Ecru projects once they are accessible, which is most likely to be from April 2018 onwards.
S2 Resources (ASX: S2R)
…The Short Story
North Wing, Level 2
1 Manning Street
Scarborough WA 6019
Ph: +61 8 6166 0240
Jeff Dowling, Mark Bennett, Anna Neuling, Grey Egerton Warburton.