What the Brokers Say
WHAT THE BROKERS SAY: Interesting news and views from across the Resource Analyst universe.
Adelaide Resources (ASX: AND)
Broad widths of high grade copper and gold mineralisation have been intersected at the Alford West prospect.
Of the 3,500 metre geochemical anomaly, only 1,100m has been drill tested with the entire interval reportedly mineralised, highlighting the significant exploration potential which still exists along strike.
Further drilling is in progress, including first testing of the recently identified Blue Tongue and Kambula anomalies, providing strong news flow in the coming months.
Adelaide Resources (ASX: ADN) is an Australian copper-gold exploration company which continues to deliver material exploration results at its flagship Moonta project, located in the highly prospective Moonta-Wallaroo district of South Australia’s Yorke Peninsula.
A shallow air core drill program carried out in 2013 at the Alford West prospect delivered some of the most impressive intersections seen from any junior exploration company in the past year.
Particular highlights include: 20m at 4.2 per cent copper and 0.27 grams per tonne gold from 32m and 45m at 1.56 per cent copper and 1.83g/t gold from 13m.
To date, only 1,100m of a 3,500m geochemical anomaly (approx. 30 per cent) has been drill tested, with numerous intervals of significant mineralisation reported along the entire zone, highlighting the potential which still exists.
Adelaide has commenced a 12,000m aircore drill program, designed to test geochemical targets along strike from the area tested in 2013.
Newly identified and highly prospective targets called Blue Tongue, Blue Tongue West and Kambula have been defined using low cost FPXRF geochemistry near Alford West and will also be tested in the upcoming campaign.
Breakaway is encouraged by the initial high grade shallow intercepts at Alford West.
Results from the upcoming drill program are eagerly awaited and with an EV of $12.3 million, Adelaide is highly leveraged to positive news flow.
Website: www.breakawayresearch.com
Rox Resources Limited (ASX: RXL)
Rox has a portfolio of quality exploration plays, however two standout as having potential to support a significant re-rating of company’s valuation.
A JORC Resource has already been defined at Camelwood (at the Mt Fisher nickel project) with drilling confirming ‘repeat’ zones along strike.
At the Teena prospect, wide spaced drilling has intersected broad widths of lead-zinc mineralisation which bodes well for Teck (and Rox) to meet the +100 million tonnes exploration target.
Although Rox Resources (ASX: RXL) has a diverse exploration portfolio, each with their own merit, two projects stand out as possible ‘company makers’.
The first project is the Mt Fisher East nickel exploration project where the company has identified what looks to be a new nickel field.
The first deposit, Camelwood, has been quickly delineated, hosting a current JORC Resource of
1.6 million tonnes at 2.2 per cent nickel for 34,600 tonnes of contained nickel.
Encouragingly, a recent RC drill program has identified multiple high priority prospects along strike of Camelwood where drilling has intersected significant widths and grades of nickel mineralisation (e.g. 17m at 2.2 per cent nickel, including 2m at 8.2 per cent nickel).
Further RC and diamond drill campaigns, earmarked for much of 2014, will likely lead to further high grade intercepts and ultimately, an increase in the resource.
The second is the Teena lead-zinc prospect which is being fully funded by Canada’s largest diversified mining company Teck Resources.
Rox currently has a 49 per cent interest, but will move to 30 per cent once Teck has sole-funded a further $10 million.
Teena has scope to become a +100 million tonnes ore body and is already regarded as one of the best zinc discoveries in Australia for many years.
Both of these projects have a significant excitement factor, and upcoming drill campaigns are designed to better quantify their size potential.
With an EV of approx. $27.5 million and an active 2014 drill season, positive news flow will likely provide a meaningful adjustment to the company’s market valuation.
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.