What the Analysts Say

WHAT THE ANALYSTS SAY: Interesting news and views from across the Resource Analyst universe.

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Company: Red River Resources Ltd (RVR: ASX)

We visited RVR’s Southern Region project 200 kilometres south west from Townsville.

First we observed the Port of Townsville, which is Australia’s largest exporter of copper and zinc, and includes berths operated by BHP and Glencore.

We also saw Sun Metals’ zinc refinery. We would expect RVR to eventually transport concentrate to the refinery and/or the port once it restarts production.

The road from Townsville to Thalanga is 200km by the sealed Flinders Highway.

Along the way we stopped at Charters Towers which, together with Townsville, will be the major sources of the Southern Region project’s workforce.

The Thalanga mill was intact and its pumps operating while we were there, being under active care and maintenance.

Main equipment includes primary crusher, banks of flotation cells to produce separate copper, zinc, and lead concentrates, filtration, and thickeners.

The site also has offices, core shed full of samples, and workshop.

Only 2km from the mill is the West 45 portal. This has a decline of 600m length and 85m depth.

We envisage RVR will aim to restart production most likely from West 45 given it has a mining license, resource, decline in place, and is nearby the mill.

The company aims to recommence production end CY2015 which is reasonable timeframe.

The decline will need to be dewatered and power and ventilation reinstalled.

The prospectivity of the region is promising. We visited the project’s Liontown deposit which has JORC (2004) Resource and also the nearby Highway Reward deposit (owned by a third party).

RVR will undertake an exploration program to ultimately determine what will come into production after West 45.

It will involve assembling an exploration team, assessment of historical databases; undertaking IP over all the tenements; prioritising anomalous drill targets; undergoing a drill campaign.

Although RVR as yet not released any capex or cost figures, we estimate RVR will require ca. $15 million for to restart production and ca. $10 million for exploration.

The zinc deficit continues to widen, with the latest ILZSG figures showing it being 248,000 tonnes for the seven months to July 2014, up from 100,000 tonnes in May.

The site visit confirms the key advantages we believe RVR possess. These include:

Excellent infrastructure support including roads, port, refinery, and grid power;

Access to residential workforce (Townsville, Charters Towers);

Existing mill that is intact;

Advanced developed orebody nearby to mill; and

High-grade JORC (2004) resources and access to historical exploration data.

Website: www.breakawayresearch.com

Company: Rumble Resources Limited (ASX: RTR)

Rumble Resources has highly prospective tenements in the emerging Fraser Range Nickel Province.

Work to date has identified a number of high quality ground EM and magnetic geophysical targets, with similarities to the Nova “Eye” feature, associated with Sirius Resources Nova-Bollinger nickel-copper massive sulphide discovery.

This is located just 25 kilometres to the west of Rumble’s Zanthus project.

Work at the Big Red project has delineated a potential ‘feeder’ style massive sulphide target, with the exploration model being the high grade Ovoid deposit at Voiseys Bay in Canada.

The company now planes to drill test both Zanthus and Big Red.

In addition the company has two other highly prospective projects – the base metal Beadell project in WA, and the precious metal Derosa project in the Birimian Greenstone Belt of Burkina Faso, a world-class gold terrane.

Both of these projects have the potential to host company maker mineralisation in their own right.

Rumble Resources is an Australian junior mineral exploration company whose main focus is nickel-copper exploration in the Fraser Range Nickel Province.

The company has a package of eleven tenements and applications of 3260 square kilometres, with ten of the tenements 100 per cent held by Rumble.

Work to date has been largely restricted to geophysical surveying, which has delineated a number of targets that now require drill testing.

Rumble is concentrating its activities on the emerging Fraser Range Nickel Province.

This tightly held area has experienced significant excitement and activity since Sirius’ Nova discovery in mid-2012, and has the potential to be established as a world class nickel province.

Nova-Bollinger is the first deposit of a particular type found in Australia, and from the Canadian experience (Voiseys Bay, Thompson, Raglan) these magmatic nickel-copper-PGE deposits occur in camps with belts containing multiple deposits.

Work by the company to date, and analysis of public data has defined a number of prospective targets, which the company now plans to drill.

A number of the targets at Zanthus show geological and geophysical similarities to those associated with Sirius’ Nova deposit, with similar EM and magnetic signatures.

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.