What the Analysts Say
WHAT THE ANALYSTS SAY: Interesting news and views from across the Resource Analyst universe.
Website: www.breakawayresearch.com
Company: Ardiden Limited (ASX: ADV)
Ardiden has commenced a drilling program on its recently acquired Manitouwadge flake graphite project, located in Ontario Canada. There has been no previous drilling on this property.
As part of Ardiden’s reinvigorated growth strategy of acquiring projects in tier one jurisdictions, the option to acquire 100 per cent of Manitouwadge was exercised in early February, for a total consideration of C$159,000 and a 2 per cent gross production royalty.
The project covers 17 staked claims for 3,400 hectares located 30 kilometres northeast of the town of Manitouwadge.
It is readily accessible along logging roads and within 50 kilometres of the Trans‐Canada Highway 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.
Follow‐up work has so far identified three graphitic zones up to 12m thick coincident with the EM anomalies.
A report by the Ontario Geological Survey indicates graphite contents of up to 20 per cent locally (generally around 5 per cent) at the Thomas Lake Road graphite occurrence, located in high grade metamorphic rocks (a suitable geological environment for large flake graphite) within the claims.
The key here is the encouraging preliminary metallurgical testwork results, carried out on trenching samples by both the vendor and by Ardiden as part of the project due diligence.
Initial flake size analyses indicates that the higher value large and jumbo components comprise up to 55 per cent of the graphite content, including 26.5 per cent for the >300μm jumbo flake.
Graphite market analysts forecast a shortage of jumbo size flake going forward, with concomitant significant price increases, with some forecasts indicating a jumbo flake price as high as US$6,175/tonne in 2020 (compared to the current price of around US$2,300/tonne).
In addition, initial simple gravity and flotation concentration yielded a 94.8 per cent purity product for the jumbo fraction.
Albeit early stage, these results from surface channel sampling, are comparable to those from the better quality projects held by companies in our universe of ASX and TSX listed graphite explorers and developers.
Website: www.breakawayresearch.com
Company: Rox Resources (ASX: RXL)
Rox Resources has a high quality portfolio of exploration projects, with several having potential to become ‘company making’ assets.
The encouraging Fisher East Scoping Study sets out attractive economics and provides confidence to commence pre-feasibility studies.
The Bonya copper project is also shaping up as becoming a significant asset within the exploration portfolio, with recent drilling intersecting meaningful widths of high grade copper sulphide mineralisation.
Rox Resources continues to make significant headway as it advances the 3.6 million tonnes at 2 per cent nickel Fisher East nickel project towards production.
A recently completed Scoping Study has concluded that a technically low risk and financially robust mining operation is achievable under both standalone and toll treating scenarios.
Both deposits in the study, Musket and Camelwood, remain open in multiple directions and provide significant exploration upside.
A $1.8 million exploration program designed to test depth and strike extensions of known mineralisation is now underway, providing ample opportunity for positive news flow in the coming months.
Rox will also advance exploration on high priority targets located along strike from Musket and Camelwood, providing the company with an opportunity to expand the current resource.
The company has also achieved encouraging progress at the Bonya copper project where Rox has earned a 51 per cent interest (and is moving to a 70 per cent interest by spending a further $1 million over two years).
RC and diamond drilling campaigns carried out in late 2014 intersected massive copper sulphide mineralisation over meaningful widths and to a vertical depth of at least 100 metres.
Follow up drilling is planned in the coming months with further positive results anticipated.
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