Recent announcements regarding the South Australian mineral and energy resources sectors
This update covers the April 2018 period and is compiled from information publicly released by companies.
Readers should refer to the latest information available on company websites, particularly in regard to making any forward investment decisions.
Previous news items:
- Alliance Resources
- Andromeda Metals
- Archer Exploration
- Auroch Minerals
- Havilah Resources
- Investigator Resources
- Leigh Creek Energy
- Minotaur Exploration
- OZ Minerals
- Renascor Resources
- Terramin Australia – Evolution Mining
- Tyranna Resources
- WPG Resources
Drilling by Alliance Resources at Weednanna Target 4 continues to return high-grade gold results (ASX release 4 April 2018). Best results include:
- 16 m at 3.2 grams per tonne (g/t) Au from 84 m (18WDRC003)
- 12 m at 10.2 g/t Au from 92 m, including 4 m at 28.1 g/t Au from 96 m (18WDRC005)
- 4 m at 12.4 g/t Au from 52 m (18WDRC006).
Part of the Wilcherry project joint venture, the drilling has also confirmed a new Target 5 lode with the best intercept of:
- 8 m at 2.2 g/t Au from 164 m (18WDRC016).
Further reverse circulation (RC) drilling is planned in 2018 to define the limits of gold mineralisation at Targets 4 and 5 and to test new target areas.
Regional diamond drilling for base metals also commenced (ASX release 9 April 2018) and preliminary metallurgical test results of a Target 4 composite RC sample indicate:
- average head assay of 16.6 g/t Au and 2 g/t Ag
- acceptable gold recoveries achieved with a grind of P80 75 µm and a pre-leach gravity separation stage.
Based on past and present metallurgical test work Alliance sees the gold mineralisation from Weednanna Targets 1, 2, 3 and 4 being amenable to conventional grinding and cyanide recovery techniques with gold extractions ranging between 86.73 and 92.8% at a grind size of P80 75 µm (ASX release 12 April 2018).
As of 31 March 2018, Alliance holds a 71.09% interest in the Wilcherry project joint venture exploration area, with Trafford Resources, a wholly owned subsidiary of Tyranna Resources, retaining a 28.91% interest (ASX release 19 April 2018).
A high-resolution gravity survey (2,550 stations) was carried out in April to identify favourable rock corridors that host high-grade gold shoots at Weednanna (ASX releases 5 April 2018 and 26 April 2018). Several structures, including a dominant NW–SE-trending set were identified. The Target 1 gold shoot is located along the most prominent of these NW–SE-trending structures, which continues to the south of Target 4. This structure has a strike length of at least 1,000 m and, apart from Target 1, is poorly drill tested over the majority of its length.
Andromeda Metals has signed a binding joint venture heads of agreement with Minotaur Exploration to acquire up to a 75% interest in its Poochera kaolin–halloysite project for expenditure of $6 million over a period of up to 5 years (ASX release 26 April 2018). The project contains a high-quality kaolin (+ halloysite) which has the potential to manufacture high-purity alumina (HPA). The Carey’s Well deposit within the Poochera tenements has a JORC measured resource of 16.3 million tonnes (Mt) of bright white kaolinised granite (Minotaur Exploration ASX release 8 February 2012).
HPA is critical in the manufacture of many high-tech products including the rapidly expanding battery technologies and energy storage sector, LED lighting industry and sapphire glass manufacture used in the production of smart phones and TV screens.
Halloysite, a rare nanoclay derivative of kaolin, has a wide variety of industrial uses beyond simple kaolin and commands a significant premium above the average kaolin price. Poochera kaolin deposits contain variable admixtures of kaolin and halloysite amenable to selective mining to produce specific low, medium and high halloysite blends for the ceramic markets, new nanotechnology applications and as a strengthening additive in the cement and petroleum fracking industries.
Andromeda will manage and operate the joint venture and plans to immediately commence additional drilling and feasibility studies.
Technical analysis at the world-class Australian Centre for Microscopy & Microanalysis at the University of Sydney has confirmed that Archer Exploration’s Campoona graphite is structurally near perfect down to atomic scale. Transmission electron microscopy showed a structurally near-perfect hexagonal graphite lattice with minimal defects, critical for battery applications and high-quality graphene production using graphitic feedstocks (ASX release 6 April 2018).
A memorandum of understanding has been signed with Urbix Resources LLC for initial work related to the suitability of Archer’s Campoona graphite using Urbix’s proprietary purification processes (ASX release 10 April 2018).
Advanced materials development, processing, and evaluation and characterisation are the focus of a collaboration agreement made with Flex-G Pty Ltd (ASX release 12 April 2018). Emphasis will be on the development of thermal management applications using materials from Archer’s Campoona graphite and graphene operations.
Additionally, a collaboration agreement and complementary research service agreement have been made with the University of New South Wales (ASX release 18 April 2018). These seek to develop and implement Archer’s graphite and graphene materials for use in energy storage system applications targeting lithium-ion batteries.
Reconnaissance field mapping at Auroch Resources 90%-owned Arden base metals project has revealed extensive stratiform sedimentary exhalative style base metal mineralisation at three of the advanced target areas (ASX release 11 April 2018). The presence of zinc, lead, copper and cobalt was confirmed following rock chip sample analyses. Best results include:
- Ragless Range, zinc target 1 samples from existing trenches:
- 6.97, 6.53 and 5.55% Zn respectively
- Kanyaka, copper–cobalt target samples from old workings:
- 12.4% Cu, 2.4% Zn and 0.5% Co
- 9.9% Cu, 4.0% Zn, 0.2% Co and 0.2 g/t Au
- Radford Creek, lead–zinc target samples from existing trenches:
- 3.9% Pb and 1.7% Zn
- 2.9% Pb and 1.6% Zn.
Havilah Resources is continuing to review the Kalkaroo project draft prefeasibility study with ongoing technical discussions with authors RPM Global and Wanbao Mining (ASX release 6 April 2018). While the prefeasibility study shows Kalkaroo to be an economically viable project, it has become apparent that a potentially attractive upside can be generated through adjustments in base-case metallurgical recoveries, mine design and ore scheduling that were beyond the scope and timeframe originally contemplated. Further work is warranted to investigate the upside options.
Havilah is also in discussion with Wanbao regarding a possible extension of the exclusivity period that expired on 31 March 2018 (ASX release 29 March 2017), and the conditions associated with such an extension (ASX release 6 April 2018).
At North Portia a two-hole metallurgical drilling program has been completed, part of the prefeasibility study being conducted under the memorandum of understanding with Havilah’s Portia mining partner, Consolidated Mining and Civil (ASX release 11 April 2018). Drill core samples will be used for metallurgical test work and geotechnical analysis.
Rock chip sample results taken from old mine dumps and ironstone/gossan outcrops at Havilah’s Scorpion prospect have returned cobalt grades up to 1,630 parts per million (ppm; 0.16%) and up to 2.2 g/t Au with appreciable copper (ASX release 26 April 2018). Scorpion is located within the Mutooroo cobalt district and 4 km northwest of the company’s wholly owned Mutooroo copper–cobalt project.
New assay results have been released from extension drilling at Investigator Resources’ Paris silver deposit (ASX release 26 April 2018). These include:
- re-assaying of a one metre December 2017 sample which confirms high silver grades at northern and southern ends of the Paris deposit:
- 5 m at 270 g/t Ag from 15 m (PPRC465; north end)
- 16 m at 169 g/t Ag from 83 m (PPRC457; south end)
- confirmation of the southeast extension to the Paris deposit with modest silver intersections associated with lead and gold:
- 5 m at 87 g/t Ag, 1.24% Pb and 1.07 g/t Au from 58 m (PPRC471)
- progression of the southeastern extension into a copper–cobalt–molybdenum anomalous zone:
- 8 m at 0.10% Cu and 201 ppm Co from 31 m; and 33 m at 27 ppm Mo from 30 m (PPRC474).
Investigator noted the extension is likely to add modest silver ounces to the resource. However, the metal zonation may offer new lateral and deeper target potential around the Paris mineral system.
Leigh Creek Energy
Leigh Creek Energy’s statement of environmental objectives (SEO) for the pre-commercial demonstration stage of its Leigh Creek Energy Project has been approved by the Government of South Australia (ASX release 19 April 2018).
The company will now submit notifications to the government to advise on the specific activities that will be undertaken under the SEO framework before on-site work commences for:
- process well drilling
- above-ground plant construction
- operations including operating, decommissioning and monitoring.
The demonstration plant will operate for 60–90 days.
Marmota’s 2018 drilling program at Aurora Tank has commenced with the first program of 46 RC holes to focus primarily on the new gold discovery at the Goshawk zone (ASX release 9 April 2018). Drillhole depths will range from 50 to 195 m with a number of shallower holes to provide variography data to assist in resource modelling. The program will also include a small nine-hole reconnaissance program at Kingfisher prospect, located about 1 km south of Goshawk
Minotaur Exploration’s substantive 2018 exploration program is underway (ASX release 16 April 2018). It includes research and development into innovative applications for its high-quality industrial mineral deposits associated with the Streaky Bay gypsum, Poochera kaolin and Casterton silica sand projects.
In an ASX release on 3 April 2018 OZ Minerals announced it was moving to phase 2 of construction of the Carrapateena copper–gold project following the recent granting of the Carrapateena mining lease by the Government of South Australia and Environment Protection and Biodiversity Conservation Act 1999 approval from the federal government. The Carrapateena program for environment protection and rehabilitation has also been approved by the Government of South Australia.
The Carrapateena project is one of the largest mines under construction in Australia and is expected to generate around 1,000 jobs from construction through to production.
Cobalt prospectivity has been expanded at Renascor Resources’ wholly owned Olary project with the identification of more target zones within the Shorts Dam prospect (ASX release 10 April 2018), which are in addition to previously identified cobalt targets (ASX release 27 November 2017). The new target zones include elevated cobalt surface geochemistry along a strike length of approximately 1 km, extending from previous (Esso Minerals Australia 1979) strong cobalt drill intervals, including:
- 15 m at 0.14% Co and 0.07% Cu from 19 m, including 1 m at 0.64% Co from 32 m (SP04).
Aeromagnetic data has outlined a further cobalt target zone at Shorts Dam along a magnetic anomaly trend that suggests potential concentrations of pyrrhotite, the sulfide host to the high-grade cobalt mineralisation intersected in drillhole SP04.
Renascor intends to commence detailed surface sampling and ground magnetics with a view to drill testing defined targets.
The Siviour graphite project has progressed with the signing of a non-binding memorandum of understanding with China’s Qingdao Chenyang Graphite (ASX release 26 April 2018) that provides for the supply of graphite concentrates in accordance with Renascor’s proposed staged development of Siviour (Siviour prefeasibility study, ASX release 14 March 2018):
- During Stage 1 Chenyang would receive up to 10,000 t of graphite concentrates per year from an estimated annual production of 22,800 tonnes per annum (tpa).
- During Stage 2 Chenyang would receive up to 30,000 tpa from an increased annual production of 156,000 tpa.
The memorandum also contemplates cooperation between Chenyang and Renascor to establish pilot plant production at Chenyang’s facilities, as well as collaboration for the supply of advanced products from Siviour graphite.
Terramin Australia – Evolution Mining
Evolution Mining has elected to exit the South Gawler project joint venture with Terramin subsidiary Menninnie Metals due to insufficient evidence to support the presence of an IOCG target of adequate size (ASX release 19 April 2018).
Diamond drilling results from the initial phase of exploration at depth of the Greenewood Gold/Campfire Bore prospects within the Jumbuck gold project were released by Tyranna Resources (ASX release 18 April 2018). Results confirm that gold mineralisation at Campfire Bore extends into the primary zone with a best intercept of 6 m at 6.2 g/t Au from 47 m in 18CBDH002 and the discovery of visible gold, the first ever occurrence of coarse gold reported. Best results include:
- 6.0 m at 6.2 g/t Au from 47 m and 1 m at 30.6 g/t Au from 50 m (18CBDH002)
- 1.0 m at 4.68 g/t Au from 75 m and 25 m at 1.0 g/t Au from 75 m (18CBDH001)
- 1.0 m at 4.68 g/t Au from 75 m and 1.3 m at 8.3 g/t Au from 128 m (18GWDH001.
Mineralisation remains open at depth in all ore zones and high-grade mineralisation has been proven within the primary zone at Campfire Bore. Tyranna proposes future exploration to target extensions to these zones and delineation of additional high-grade zones. The project is part of the Western Gawler Craton joint venture which is managed by Tyranna and includes WPG Resources and Coombedown Resources.
For an update on the Weednanna gold prospect, part of the Wilcherry project joint venture, see Alliance Resources above.
Further encouraging gold results have been returned from the third fan of drillholes in WPG Resources’ phase 2 drilling program at Challenger Deeps (ASX release 4 April 2018). The holes were designed to test the M2 lode at the 70 metres relative level (mRL), 45 m below the current production level. Key intercepts on the M2 lode include:
- 0.74 m (true width) at 17.11 g/t Au from 23.0 m downhole (17CUD2246)
- 0.67 m (true width) at 7.36 g/t Au from 25.40 m (17CUD2247)
- 1.41 m (true width) at 5.23 g/t Au from 125.67 m downhole, including 0.33 m (true width) at 9.93 g/t (17CUD2248)
- 0.45 m (true width) at 54.54 g/t Au from 147.0 m downhole (17CUD2249)
- 0.16 m (true width) at 13.99 g/t Au from 100.0 m downhole, 0.25 m (true width) at 108.88 g/t Au from 150.0 m downhole and 0.29 m (true width) at 29.76 g/t Au from 167.2 m downhole (17CUD2250).
A zone of high-grade gold mineralisation has been intersected on the 115, 95 and 70 mRLs which indicates grade continuity down plunge on the M2 lode over these three levels. Mining has recently commenced on the 115 mRL level.
At Tarcoola, WPG has identified compelling drill targets beneath and adjacent to its Perseverance open pit along with historical gold intersections that suggest the potential for depth extensions to the Perseverance pit as well as underground mining (ASX release 10 April 2018). The Deliverance zone is at least 500 m long and contains many historical gold workings and significant drill intersections. It is open along strike and at depth. Some 400 m of this zone is beneath the crest of the pit and extends into the planned bottom of the pit. The zone has been tested with about 20 historical drillholes, and, importantly, only four of these holes returned intersections of less than1 g/t Au. WPG plans to drill these areas as a priority.