What the Analysts Say
WHAT THE ANALYSTS SAY: This week our team of experts run the ruler over Adriden Limited (ASX: ADV) and Diatreme Resources (ASX: DRX).
Website: www.breakawayresearch.com
Company: Ardiden Limited (ASX: ADV)
Metallurgical beneficiation testwork completed on samples from the recent drilling campaign at the 100 per cent-owned Manitouwadge graphite project:
Up to 80% of graphite classified as premium jumbo and large flake;
Total Graphitic Carbon (TGC) grades of up to 95.6% for jumbo flake and 93.7% for large flake from simple, low cost gravity and flotation concentration;
Subsequent caustic bake purification testwork on jumbo flake has returned grades of greater than 99.95% TGC, comparable to high purity, high value synthetic graphite;
Bulk sample being prepared to provide representative samples to prospective customers and for further testwork samples; and
Potentially ideally placed to take advantage of the anticipated increasing demand (and prices) for the premium larger flake and higher purity products.
Ardiden has completed an initial 10 hole, 833 metre diamond drilling and metallurgical testwork program on its Manitouwadge graphite project, located in Ontario, Canada.
The project covers 17 staked claims for 3,400 hectares located 30 kilmetres NE of the town of Manitouwadge, and was acquired earlier this year for a total consideration of C$159,000 and a 2% gross production royalty.
The project is readily accessible along logging roads and is within 50km of both the Trans‐Canada Highway and Railway in a historic mining district.
A number of other graphite projects are located in the region, including Zenyatta Venture’s Albany deposit, approx. 100km from the Manitouwadge project.
Previous work has included airborne and ground electromagnetic (EM) surveying by Noranda, which identified six conductors up to 1.6km in strike length during exploration for massive sulphide base metal mineralisation.
Ardiden and the vendor carried out trenching over some zones and preliminary metallurgical testwork on the trench samples as part of the due diligence.
Recent drilling intersected downhole intervals of up to 9.7m (approx. 5m true width), containing up to 4.06% TGC, and averaging around 2% TGC in the limited strike length tested.
These results confirm the presence of mineralisation at depth, and although these grades are relatively low compared to most companies in our universe of ASX and TSX listed graphite explorers and developers, they are comparable with other Canadian projects, including Zenyatta Ventures’ Albany (45.2 million tonnes at 3.14% TGC, $87m capitalisation) and Northern Graphite’s Bissett Creek projects (93.8 million tonnes at 1.72% TGC, $27m capitalisation).
Website: www.beerandco.com.au
Company: Diatreme Resources (ASX: DRX)
In March 2012, Diatreme announced the results of its Pre‐Feasibility Study on the Cyclone mineral sands deposit, with a pay‐back period of 2.1 years.
While DRX had announced, in August 2010, a MoU with the largest end user of zircon in China, there were four key assurances required, and three have now been delivered, with the final, environmental clearance for an access road, now in train.
Diatreme is now re‐engaging with potential off‐take partners and financiers.
A formal commitment to project construction can be expected late in 2015, with first product in early 2017.
Diatreme is farming down its interest in Tick Hill, which is a former gold mine.
The company also has an application over Cape Bedford.
Cyclone Definitive Feasibility Study by September, 2015
Diatreme has been granted the Mining Lease for the Cyclone project.
To complete its DFS, DRX needs to complete all its final permitting, with the major outstanding issue being environmental approval for the access road.
Diatreme is also undertaking a value engineering study to finesse capital and operating cost estimates.
Beer & Co expect that the capex of $146 million should be reduced, as should the annual opex of $80 million.
Drilling to start at Tick Hill
Tick Hill was mined by a subsidiary of MIM from 1991 to 1995, producing 513,333 ounces from 705,000 tonnes of ore, at a recovered grade of 22.6 grams per tonne.
Diatreme holds three granted Mining Licences over the area.
With its JV partner, Superior Resources (SPQ.ASX) Diatreme will start a program of 60 air‐core holes in late June, with the first 35 holes being in the tailings dam.
Cape Bedford: Silica and Valuable Heavy Mineral Sands
Diatreme has an application over Cape Bedford, which surrounds the existing Cape Slattery silica sands that is being mined by Mitsubishi, and is a much larger area.
The mineralisation appears to continue into Diatreme’s area.
Diatreme has draft agreements with the Traditional Owners.
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The views, opinions or recommendations of this article do not in any way reflect the views, opinions, recommendations, of The Resources Roadhouse.
The Roadhouse makes no representation or warranty with respect to the accuracy, completeness or currency of the content. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian financial services licensee before making investment decisions.