What the Analysts Say
WHAT THE ANALYSTS SAY: Interesting news and views from across the Resource Analyst universe.
Website: www.hartleys.com.au
Company: Altona Mining (ASX: AOH)
Turkey Creek adds to the appeal of Little Eva
Altona Mining Limited recently announced further extensional RC drilling results at the Turkey Creek discovery located approx. 1.5 kilometres east of the proposed Little Eva pit and processing plant infrastructure at the Cloncurry project.
This drilling has extended the Turkey Creek deposit an additional 600 metres along strike.
The deposit now has a strike length of over 1.8km with mineralisation extending to at least 150m depth and remains open.
AOH has increased the conceptual exploration target for Turkey Creek to 19 to 22 million tonnes at 0.5 to 0.65 per cent copper of which 4 to 5 million tonnes at 0.6 to 0.8 per cent copper is oxide material.
Potential to add ~2 years of minelife to the Little Eva project
Hartleys estimates suggest Turkey Creek has potential to deliver approx. two years of feed to the Little Eva project (Turkey Creek was not included in the DFS). Our modelling estimates each additional year of feed at Little Eva adds approx. $14 million or 3 cents per share to our valuation.
A maiden mineral resource estimate for Turkey Creek is expected over the coming months.
Preliminary metallurgical testwork is underway to assess the suitability of the Turkey Creek sulphide ore to be processed through the proposed Little Eva flotation circuit.
The Turkey Creek discovery is located at the site of the proposed tailings storage facility which will now be re-located.
Turkey Creek has potential to be an early open pit feed source for the Little Eva processing plant at startup and subsequently a potential tailings storage facility on completion of open pit mining.
Once in production Little Eva will keep on giving
The Cloncurry project has a current resource of 1.5 million tonnes copper of which only 347,000 tonnes copper (approx. 23%) has currently been converted to reserve.
After Little Eva has moved into production we see significant potential to extend minelife well beyond the current 11 years through conversion of existing resources and further discoveries of large deposits similar to Turkey Creek.
The Little Eva project is technically robust and economic at current spot prices.
As well as a robust copper-gold development Cloncurry offers some of the best base metals exploration ground in the world.
An improvement in copper prices combined with a lower AUD and a funding solution for Little Eva will see a significant re-rating of the AOH share price over the coming quarters.
Website: www.breakawayresearch.com
Company: Sheffield Resources (ASX: SFX)
Sheffield Resources (SFX) continues to steadily advance its flagship Thunderbird deposit, putting the company firmly on track to become a Tier 1 mineral sands producer.
The 2014 Scoping Study already demonstrated robust project economics; however, following the latest resource upgrade the project economics are expected to be strongly enhanced. Details will be outlined with the release of the PFS, scheduled in the current quarter.
Assuming a positive outcome in the PFS, Sheffield will undertake a Definitive Feasibility Study, expected by mid-2016, with first production targeted as early as Q4 2017.
The Thunderbird Resource now stands at 3.2 billion tonnes at 6.8 per cent heavy minerals (HM) (3% HM cut off) containing 95 million tonnes of HM, including 19.3 million tonnes of zircon, making it one of the largest accumulations of zircon in the world.
Within the broader Thunderbird resource, Sheffield has identified a ‘high grade’ core, which hosts 1.1 billion tonnes at 11.8 per cent HM (7.5% HM cut off) of which plus-88 per cent is in the Measured and Indicated category.
This ‘high-grade’ resource is sufficient for at least 32 years of production at the targeted 20.8 million tonnes per annum rate.
Sheffield is on track to become a globally significant zircon and ilmenite producer, which will be important to support future funding requirements and placing the company firmly on the radar for potential corporate activity.
In late 2014, Sheffield Resources announced a significant resource upgrade at the Thunderbird project.
The current resource of 3.2 billion tonnes at 6.8 per cent HM compares to the previous resource of 2.62 billion tonnes at 6.5 per cent HM.
Within this resource, Sheffield has identified a coherent ‘high grade core’ containing 1,080 million tonnes at 11.8 per cent HM containing 10 million tonnes of zircon, 3.1 million tonnes of high-titanium leucoxene, 2.8 million tonnes of leucoxene and 36 million tonnes of ilmenite (at the higher grade 7.5% HM cut off).
The upgrade represents a 46 per cent increase to the previous ‘high-grade’ component of the resource, incorporating an increase in both tonnes and grade.
The upgraded resource was the second during 2014 and a significant achievement for the company, further cementing its place as a globally significant mineral sands project.
Zircon is the highest value mineral in the Thunderbird mineral assemblage (Scoping Study assumes US$ 1,475/t vs current pricing of ~US$ 1,146/t) and is expected to be a key factor in delivering significant company earnings.
Disclaimer: The above is intended as a guide only. The Roadhouse accepts no responsibility for investments made from this advice, successful or otherwise.
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.