Thor Mining (LSE:THR) was trading at 0.8p on Wednesday after announcing plans to expand its operational portfolio through two acquisitions.

The business said is looking to acquire Pilbara Goldfields and Hammersley Metals, which collectively hold interests in two granted licences and seven licence applications at various stages of advancement. These assets are prospective for gold and uranium and cover a total of 764km2 in the Pilbara region of Western Australia and the Northern Territory of Australia.

To purchase the companies, Thor will pay £450,500 through the issue of 53m new shares at 0.85p each. These are subject to a six-month lock-in. Furthermore, following shareholder approval, the vendors will receive 26.5m Thor warrants to subscribe for 26.5m of the company’s shares at 1.3p each. These will have a three-year lifespan. Finally, the vendors will receive an additional 22.5m Thor shares if any of their projects enter commercial production.

To support the development, Thor has undertaking strategic financing raising £400,000 by issuing more than 47m new shares at 0.85p each. These shares are accompanied by three-year warrants exercisable at 1.3p. ‘With existing cash at bank, the strategic financing provides a valuable addition to Thor’s working capital,’ the firm added.

Thor will now conduct further work on both Pilbara and Hammersley’s licence application interests before reporting back to the market over the coming weeks.

In Wednesday’s update, Thor said it pursued the deal because much of its portfolio is beginning to reach the crystallisation stage. Indeed, the business has advanced its 100pc-owned Molyhil tungsten and molybdenum project to mine construction-ready status. It is currently in a commercialisation process to secure project-level finance for the mine construction phase. Meanwhile, the company’s Kapunda project interest (up to 45pc) is being divested into a new company called Enviro Copper, as announced earlier this month.

Once these two transactions have completed, Thor said its exploration interests will be limited to its 40pc-owned Bonya tungsten, copper, and vanadium project. As such, executive chairman Mick Billing said the new firms will give it access to a new round of exploration opportunities in Australia.

‘I am extremely pleased to announce today's Strategic Australian acquisitions which add gold and uranium into the Thor Mining Australian portfolio,’ he added. ‘The company is seeing the maturity of its Molyhil project as we move toward the mine construction and production phases. Likewise, with Kapunda as announced the company is moving its interest into a new vehicle with a listing strategy on a recognised stock exchange.

‘In anticipation of the above crystallisation process the Company needs to access new Australian opportunities and the Strategic Acquisitions announced today enable us to take a material step forward in this regard. Alongside this the Strategic Financing further bolsters our working capital and provides a considerable extension to our cash runway. Thor is active in multiple areas and we anticipate further news updates to the market in the near-term. I look forward to updating the market across the above areas over the coming weeks.’

Elsewhere, Thor announced that it is currently undertaking standard director due diligence before appointing a new external non-executive director. This individual will assist the firm with its transition and development.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above.

Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

 

Ecuador-focused resources firm SolGold (LSE:SOLG) dipped 3.7pc to 38.7p on Tuesday despite revealing progress at its flagship Cascabel project and developments in its bid for Cornerstone Capital Resources.

SolGold said the preliminary economic analysis for Cascabel’s Alpala deposit is now at a ‘very advanced stage’ and is slated for release following peer review and quality assurance procedures. However, the firm noted that preliminary mine plan assessments and metallurgical data have been more complicated than initially anticipated, resulting in ‘unavoidable but necessary’ delays.

Alpala lies upon the northern section of the prolific Andean Copper Belt, the base for nearly half of the world’s copper production. According to SolGold, the project area hosts mineralisation of Eocene age, which is the same age as numerous Tier 1 deposits along the belt in Chile and Peru.

Elsewhere, the business said it is continuing to engage 11 drilling rigs onsite across the wider Cascabel area in Northern Ecuador. These are carrying out resource extension drilling at a rate of 10,000m a month, focusing on higher-grade mineralisation to the North West and South East of Alpala. Furthermore, the company is conduction sterilisation and geotechnical drilling of the proposed plant site and decline route.

Finally, SolGold provided an update on its bid for TSV-listed Cornerstone Capital Resources, first announced in January this year.

Cornerstone owns the final 15pc of Cascabel that is not owned by SolGold. The latter believes that moving the operation into one entity will have ‘tremendous economic upside, further de-risk the ownership structure and present a simplified and highly attractive value proposition for investors’. The business has offered Cornerstone’s shareholders the opportunity to convert each of their shares into 0.55p of a SolGold share, which it has calculated as an immediate premium of around 20pc.

In Tuesday’s update, SolGold said it is finalising formal documentation for its Cornerstone bid, which it expects to complete shortly. The business said the process had taken longer than expected due to ‘taxation and other considerations to ensure the most advantageous treatment of Cornerstone shareholder’ and the need to translate the bid into French. However, it added that the withdrawal or failure of its bid could have a negative or depressing effect on the illiquid cornerstone market.

‘Should the bid be successful, all Cornerstone shareholders will benefit greatly from consolidation of the project to increase focus and attention on the SolGold capital structure,’ SolGold went on to add. ‘SolGold's award-winning management team are applying the exploration expertise, regional familiarity and blueprint throughout the country, based on the Company's extensive exploration portfolio secured pursuant to its 2014 first mover advantage in Ecuador as a serious copper-gold porphyry explorer.’

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Asiamet Resources (LSE:ARS) rose 4.3pc to 6.9p on Monday morning after continuing its hot news streak with the upgrade of its Beutong copper-gold resource in Indonesia.

The firm revealed a 2019 mineral resource assigning the asset a measured resource of 34Mt at 0.67pc copper, 0.13g/t gold, 1.68g/t silver, and 90ppm molybdenum. Meanwhile, its indicated resource has been set at 56Mt at 0.58pc copper, 0.12g/t gold, 2.07g/t silver, and 104ppm molybdenum.

Finally, Beutong’s inferred resource now hits 419Mt at 0.45pc copper, 0.13g/t gold, 1.14g/t silver, and 125ppm molybdenum. All-in-all, this translates to total resources of 2.43Mt copper, 2.11Moz gold, and 20.9Moz silver.

Beutong is a sizeable high-quality copper, gold, silver, molybdenum deposit outcropping at surface that boasts production licence tenure and is based near existing infrastructure. The upgrade follows an infill drilling programme completed last year that improved Asiamet’s geological understanding of the asset.

What’s more, the prospect appears to offer plenty of upside potential, remaining open to the east, west, and at depth. Indeed, the deepest drilling completed at Beutong to date has intersected porphyry mineralisation to around 800m below surface and 200-300m below the depth of drilling used to delineate its resource.

Alongside this, Asiamet has modelled strong copper, gold, and molybdenum grades near a sizeable magnetic body below current drilling. It believes this offers ‘excellent potential’ for the discovery of a high-grade ore similar to well-known porphyry systems like Wafi Golpu and Cascabel, owned by Newcrest and Solgold respectively.

Asiamet is now planning to complete further drilling campaign to grow the Beutong deposit well beyond the current resource, test the potential for a high-grade core, and explore early stage development opportunities.

The company’s chief executive Peter Bird, added: ‘Junior companies with large, well located development stage copper inventories such as Asiamet are rare and extremely well positioned to benefit from widely forecast stronger copper prices. 

‘The 2018 drilling program has improved our geological understanding of the deposit and this updated Mineral Resource Estimate in accordance with JORC 2012 provides strong support for the integrity, size, scale and upside potential of the project.  Future drilling campaigns will be directed to expanding the Resource, testing the potential for a high grade core at depth, and exploring early stage development options for the project.’

The upgrade at Beutong comes just days after Asiamet revealed that strong drilling results have taken it another step closer to completing a bankable feasibility study (BFS) for its BKM copper deposit in Indonesia. The business said that the latest round of assay results received from infill and geotechnical drilling have confirmed its expectations for the deposit. It added that they also ‘further strengthen’ resource models at the site.

Highlights from the latest results include a hole called BKM31550-06 that delivered 19m at 1.16pc copper from a depth of 72.5m. This included 5m at 1.43pc copper from 82.5m depth and 2m at 2.61pc copper from 89.5m depth. Another hole called BKM31550-09 included 27m at 0.67pc copper from 57.5m depth. This featured 3m at 2.15pc copper from 80.5m depth.

Asiamet has now completed 37 resource evaluation holes and four geotechnical holes for 5,665m of diamond core drilling. It has received assays results for 32 holes, with the remaining nine expected before the end of the month. Once the company gets these, it will update its resource models at BKM, using this to generate first ore reserves for the BKM copper project.

The BKM BFS is expected to precede the delivery of a final feasibility study by the close of H1 2019 and first production by the end of the year. Asiamet has already carried out a preliminary economic assessment at BKM, which gave the site an after-tax NPV10 of $204m and after-tax IRR of 39pc. This calculation was based around a 25ktpa copper cathode heap leach operation to be carried out over an initial eight years.

BKM’s NPV alone dwarfs Asiamet’s current £66.2m (c.$87.6m) market cap considerably. What’s more, this figure doesn’t include the ‘district-scale potential’ Asiamet expects to be on offer in the area surrounding the project. This point was highlighted last month when institutional investor JP Morgan took advantage of a slump in Asiamet’s share price amid the resource market downturn to increase its stake to 9.37pc.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Kavango Resources (LSE:KAV) sat at 2.9p on Monday morning after revealing ‘extremely encouraging’ initial drilling results at the Ditau prospect on its Kalahari Suture Zone (KSZ) project in Botswana.

The firm said the first hole drilled at the site encountered a 200m zone of intensely altered rock holding a 70m area containing significant sulphide alteration. This presented indicative cobalt values of up to 0.9pc and a weighted average of 0.2pc cobalt alongside elevated copper, zinc, lead, and nickel values. Kavango’s chief executive Michael Foster said this is ‘suggestive of mineralisation at depth’.

The core from the hole – which is called DitDDH1 – will now be sent to an accredited international laboratory for geochemical analysis and assay. Kavango will release final assay results when they become available.

The business has now begun drilling a second hole called DitDDH2 on a second conductive body based 1.8km east of its first target. Elsewhere, Kavango has now drilled a water well at Ditau to facilitate drilling and remove the need to cart water over long distances.

Foster added: ‘This hole is already advancing to plan and is benefitting from the new water well. We will continue to announce further drilling results from Ditau in a timely fashion.’

Kavango holds 15 prospecting licences covering 9,231km2 of ground in Botswana, including most of the 450km long Kalahari Suture Zone (KSZ) magnetic anomaly in the southwest of the country.  Here, it is exploring for copper, nickel, and platinum group element-rich sulphide orebodies. Kavango’s co-founder Mike Moles recently authored a piece for MiningMaven on how these formations occur and why the firm is keen to locate them, which can be found here.

The KSZ is yet to be examined using modern drilling techniques. However, Kavango argues that it has a similar geological setting to the giant Norilsk copper/nickel deposits in Siberia. Speaking last year, Moles said that Kavango only needs to find one sulphide deposit on the KSZ deposit to demonstrate its prospectivity and that the Norilsk model is applicable.

The business announced that it was launching an initial 1,000m drill programme at Ditau at the end of January. This has been designed to intersect two ‘very compelling’ coincident geophysical and geochemical base metal conductor/anomalies.

The anomalies extend north-south for at least 4km and are coincident with zinc in soil anomalies at the surface. Zinc acts a pathfinder for potential base metal mineralisation at depth because it is the most mobile of the base metal elements.

Meanwhile, the company has mobilised the second phase of an airborne electromagnetic survey over its remaining licences in the KSZ. The airborne EM survey detects and prioritises potential locations for these sulphide deposits, which Kavango can then follow up with more detailed groundwork and drilling.

Flying for the second phase of the survey began towards the end of February and is expected to take between four to six weeks to complete. It will cover up to 2,062 line-kilometres in the Hukunstsi area of Botswana.

 

A map showing Kavango’s licences in Botswana’s Kalahari Suture Zone

 

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above.

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Chesterfield Resources (LSE:CHF) recently came to market to provide investors with an opportunity to access the vibrant copper market through the formerly-thriving mining jurisdiction of Cyprus. Fresh from the firm expanding its land package considerably on the back of strong gold prospectivity, executive chairman Martin French talks us through what investors can expect over coming months in this exclusive Q&A session…

Can you tell me about the formation of Chesterfield Resources?

We started as a group of investors looking for exploration opportunities in copper. We believe the current supply/demand dynamics within the market for the metal present an excellent opportunity for investors.

Cyprus has always looked like a fantastic opportunity to me. The word “copper” even comes from the Latin word for Cyprus – Cyprium. Historically, the island has always been significant for the metal. Not many people know, it was a big producer in the 1960s and early 1970s. However, following the Turkish invasion of 1974, the industry was stopped in its tracks.

This was also around the time that the Vietnam War was drawing to a close, meaning that copper demand has begun to decline. Alongside this, explorers and producers began to discover large porphyry systems in Latin America. All this has meant that the industry’s needs were met elsewhere. Essentially, we felt this indicated that an area that was once a very vibrant producer of copper had been mothballed for 45 years. It looked like a great area to approach.

Chesterfield’s particular opportunity arose because we discovered that third parties did not hold many of the licences covering previously-copper producing areas. The government still owned them. This gave us an opportunity to go out and acquire an expansive licence area with relative ease.

So, against this backdrop, has your interest in revitalising Cyprus’s copper industry been reciprocated by the island’s government?

For some time, there have been two main industries in Cyprus. One is the tourism sector, which caters in particular to the British. The other is financial services. However, over recent years, the latter has come under an increased compliance restrictions from EU regulators. This is creating some pressure on the Cypriot financial services industry.

I think Cyprus now wants to diversify from its traditional, hallmark economic drivers. The fact that companies like Chesterfield are coming in to revive the island’s mining industry ought to be attractive from the government’s point of view.

Handily, the strong links between the UK and Cyprus – which have arisen mainly thanks to the area’s booming tourism industry – are working in our favour. Indeed, Cyprus’s legal system is based on English Common Law, two RAF bases are actually British Overseas Territories, and – for what it’s worth – they even drive on the ‘wrong’ side of the road (like us Brits do). All of these connections have made it a great country in which to operate – perhaps even more so than jurisdictions like Spain and France, where some of our peers are targeting. As it stands, from a mining perspective, Cyprus is a relatively benign place. We have found the mining regulatory authority very helpful.

Although there were a few miners that attempted to enter the territory during the last resources boom, no one has really come into the area as we have. We have acquired quite a large land package, and – speaking globally - this is very unusual given the area’s previous prospectivity. So we have a significant first mover advantage. Going forward, however, we hope and expect other resource firms to join us in the area.

Can you tell me about the assets, and what made you pursue them?

At the moment, the ground we have in the Troodos area is brownfield exploration. We are exploring for mineral deposits as well as studying historical dumps for other revenue opportunities. We did around 3,000m of preliminary drilling before Christmas within the areas in which we had been permitted to work. Fortunately, much of this is based in the vicinity of significant, historical mines.

Cyprus is well known for hosting volcanogenic massive sulphide (VMS) ore deposits. So much so, that geology students often go out to the island to study its rock structures. With this in mind, the real surprise for us was that we hit surprisingly high levels of gold, as well as copper. We have also discovered more recent epithermal systems, which we did not expect. This, therefore, means that mineralisation is hosted in at least two types of systems, which is very exciting.

Our work so far has mainly taken place at our Troodos West licences, and we are starting to generate a large number of targets here. We have also begun to receive permits at the grants we applied for in Troodos North, which we announced last month. We will now be working to generate targets here before drilling them and exploring what they can offer.

As it stands, there is one target in particular that could represent a near-term revenue project for us. This is a pit called Limni. It was refilled with about 10MMts of waste material, and we are fairly sure that it contains a large amount of copper in water solution. When it rains heavily, the pit even starts to overflow with this bright blue liquid – as sure a sign of mineralisation.  We are looking to drill into Limni and see if we can extract this and should be talking more about that soon. It is an exciting possibility for us.

A map of Chesterfield’s holdings in the belt surrounding Cyprus’s Troodos Mountains

You also recently announced a substantial expansion of your exploration programme; can you talk me through this?

Of course, this was launched mainly off the back of the strong results we received from our early drilling – the gold levels really marked a step-change in the pace of our activities. Initially, we applied for permits over around 60km2 of land, principally covering Troodos West and North, but as our drilling results started to look so strong, we decided to up the ante.

We have applied for licences that will essentially more-than-triple our mineralisation exploration land package in the highly prospective belt surrounding the Troodos mountain range. Once you submit a licence in Cyprus, no-one else can apply for it. Provided these are granted, we will become the dominant player on the island in terms of exploration acreage – we are very much gunning the engines. We will take this land package and start to explore it straight away. There really is a lot you can do very quickly with remote sensing and archival data to begin generating target lists.

Obviously, we cannot drill until we have the permits, so the immediate plan is to focus on the licences that we already have permited. We hope to start drilling again mid year, but this could come even sooner because our contracted drill is held in our facility, meaning it is easily accessible.

Alongside this, we will be exploring our additional land and, as can be seen in our recent newsflow, we have been hiring new staff to support our larger operations. Notably, this includes First Quantum veteran Michael Parker, who has joined us as chief operating officer. Mike was instrumental in two huge discoveries for First Quantum and was the organisation’s country manager for the DRC and then Peru. He is an extremely experienced and senior individual, and a company of our size would not normally expect to be able to hire a person of that calibre.

This sounds like a large amount of work; can you talk me through Chesterfield’s cash situation?

Of course, as it stands, we have around £1.6m in the bank, meaning we are pretty well funded. Of course, the degree to which this can stretch is dependent on the amount of drilling we decide to do. Regardless, I feel quite confident in saying that we have sufficient funds for our activity in 2019.

So, what is the long-term plan?

We are in Cyprus to make commercial discoveries, and we are very confident that we can do that. We have exploration techniques that were not available to companies operating in the region back in the heady days of the 60s and 70s, and we also have a vastly improved knowledge of the area’s geology.

Alongside this, drilling was very slow and expensive back in the days when Cyprus’s mining industry was booming. Miners tended to rely on finding mineral expressions at the surface and following them down. They were not really exploring and  drilling in the way we think of it these days.

Furthermore, there are quite a few areas where we can see mineralised structures going under cover. In volcanic regions, these formations tend to go under basalt and old lava flows. In the past, these would have gone entirely un-noticed by operators due to technological restrictions.

This combination of greatly-improved geological understanding and massively-improved exploration techniques means that, in our eyes, we are approaching the asset as if it were new with the knowledge that it is already prospective.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

 

Asiamet Resources (LSE:ARS) sat at 6.6p on Wednesday after revealing that strong drilling results have taken it another step closer to completing a bankable feasibility study (BFS) for its BKM copper deposit in Indonesia.

The business said that the latest round of assay results received from infill and geotechnical drilling have confirmed its expectations for the deposit. It added that they also ‘further strengthen’ resource models at the site.

Highlights from the latest results include a hole called BKM31550-06 that delivered 19m at 1.16pc copper from a depth of 72.5m. This included 5m at 1.43pc copper from 82.5m depth and 2m at 2.61pc copper from 89.5m depth. Another hole called BKM31550-09 included 27m at 0.67pc copper from 57.5m depth. This featured 3m at 2.15pc copper from 80.5m depth.

Asiamet has now completed 37 resource evaluation holes and four geotechnical holes for 5,665m of diamond core drilling. It has received assays results for 32 holes, with the remaining nine expected before the end of the month. Once the company gets these, it will update its resource models at BKM, using this to generate first ore reserves for the BKM copper project.

Asiamet’s chief executive Peter Bird said the results strengthen the business’s position as it moved into the final phase of mine and process design to generate an initial ore reserve for BKM.

‘Upside potential in and around the BKM deposit remains very high and an external geological consultant with extensive experience in Indonesia has recently been engaged to further strengthen our understanding of the BKM geological system and develop a suite of additional high potential near mine Resource targets for testing in the next round of drilling,’ he added. ‘This work is currently under way and we look forward to providing an update on this target generation program shortly.’

The BKM BFS is expected to precede the delivery of a final feasibility study by the close of H1 2019 and first production by the end of the year. Asiamet has already carried out a preliminary economic assessment at BKM, which gave the site an after-tax NPV10 of $204m and after-tax IRR of 39pc. This calculation was based around a 25ktpa copper cathode heap leach operation to be carried out over an initial eight years.

BKM’s NPV alone dwarfs Asiamet’s current £66.2m (c.$87.6m) market cap considerably. What’s more, this figure doesn’t include the ‘district-scale potential’ Asiamet expects to be on offer in the area surrounding the project. This point was highlighted last month when institutional investor JP Morgan took advantage of a slump in Asiamet’s share price amid the resource market downturn to increase its stake to 9.37pc.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

 

Since listing in London last July, Kavango Resources (LSE:KV) has been making progress in its quest to locate magmatic, massive sulphide orebodies in Botswana. In particular, the company is focused on a 450km-long magnetic anomaly called the Kalahari Suture Zone (KSZ), where it hopes to discover deposits of copper, nickel, and platinum group elements. In this piece, Kavango co-founder and seasoned geologist Mike Moles explains how the magmatic sulphide orebodies Kavango is searching for are formed, what they could contain, and how they can be developed into a marketable product.

Until Kavango started work on the KSZ, the mineral potential of the area had not been investigated using modern exploration techniques. Kavango believes that the KSZ represents a similar geological setting to the giant Norilsk copper/nickel/PGE deposits in Siberia. The firm has now begun an initial 1,000m drill program at its nearby Ditau prospect.  Meanwhile, the company is continuing to line up further drilling targets through the combination of an extensive airborne EM survey and a pioneering, high-resolution soil sampling technique that detects ultra-fine metal particles.

What are magmatic sulphide orebodies?

Magmatic ore deposits are formed in association with the intrusion of mafic/ultra-mafic magma into (or sometimes on top of) the rocks forming the earth’s crust. This magma contains more dark minerals like olivine and pyroxene than light-coloured minerals like silica-rich feldspars and quartz.

Examples of mafic/ultra-mafic rock include gabbro, peridotite and dunite. Most of the minerals making up these rocks are still silicates but they tend to contain relatively higher proportions of base and precious metals in their crystal lattices than felsic minerals. The diagram below shows this dynamic in action. When these metals are concentrated at high enough grades and in large enough quantities to be economically mined, they are called ‘magmatic ore deposits’.

 

This diagram shows examples of both mafic and felsic rocks (Credit: W.W. Norton & Company)

It is worth noting that magmatic ore deposits are not the same as volcanogenic massive sulphide (VMS) deposits. These are formed from the interaction of seawater with submarine volcanism. The extrusive volcanism represents a ‘heat engine’ that drives the hydrothermal alteration of both the lavas and the country rock. The metals that are ‘dissolved’ by the alteration then combine with sulphur in the seawater. This leads to the deposition of metal sulfide deposits on the seafloor or within the country rocks.

How are they formed?

Mafic/ultra-mafic magma is the product of the partial melting of ultra-mafic rock and sub-ducted crust. The magmas rise into the solid crust partly due to thermal convection (hot spots), partly due to the melting of sediments containing water, and partly due to density, temperature & pressure differentials.

In some cases, the magmas intrude into areas of structural weakness like deep-seated faults or ancient craton edges or suture zones. Here, the magma can reside for varying periods in what are known as ‘magma chambers’ where it interacts with the enclosing rock.

During this period, the magma may partly crystalize and alter the chemical composition of the residual magma. Further pressure from below may then force this ‘evolved’ magma into shallower depths.  In some cases, it may eventually reach the surface, where rapid decompression may result in the extrusion of lava (e.g. basalt). Extrusive lavas cool rapidly, but the magma in the magma chambers may take several million years to cool and crystalize to form solid rock. 

Following this, the concentration of the critical ‘ore’ minerals occurs through a number of different primary and secondary processes.

Primary concentrations

The mafic/ultra-mafic magmas vary in chemical composition depending upon their source rocks and the degree of partial melting that occurred during their formation. The molten magma may end up containing quantities of sulphur and water.

As the magma in the magma chamber begins to cool it starts to crystalise, with some minerals crystalising before others. This changes the chemical composition of the residual magma, leading it to be enriched in certain elements through a process known as ‘fractional crystallisation’.

The chemistry of the residual magma may also be changed by the incorporation of volumes of ‘country’ rock from the walls of the chamber. It is particularly advantageous for the magma to incorporate volumes of coal or coal shale that contains both sulphur and carbon. This appears to be the case with the gabbros on Kavango’s KSZ project. If the residual magma becomes enriched with sulphur, most of the metals will prefer to bond with the sulphur rather than form oxides or take up sites within the silicate lattices. The metal sulphide liquid is late to crystallize and forms an ‘immiscible’ liquid, which is heavy relative to the recently formed silicate minerals. This metal-rich sulphide liquid tends to crystallize on the cool walls of the intrusion or gravitates to the floor where it forms a concentrate - the massive sulphide. 

Concentration and crystallization of this immiscible liquid can also occur at other localities due to a sudden drop in pressure or introduction of new magma into the chamber. This type of mineral concentration is usually dependent upon large quantities of magma passing through the magma chamber, constantly enriching the residual magma in metal sulphide liquid.

A variation of this model occurs in very large mafic/ultra-mafic (layered) intrusive bodies such as Bushveldt, Duluth, and Stillwater. These are closed or partly-closed systems where magma replenishment is less important. In these bodies, sulphur is also less important. After the first phase of crystallization, the residual liquid becomes enriched in certain elements. This may lead to the crystallization of another mineral species until the residual liquid becomes depleted in the elements needed for that phase. This leads to cyclical fractionation producing alternation layers of mineral species. At some point in this very slow process, bands of chromite might form as the concentration of chrome in the residual melt combines with oxygen in the system. As the silicate crystals form, gaps occur between them. These gaps may be filled with the immiscible sulphide liquid, which is rich in copper, nickel and PGEs. In some cases, these sulphide-rich layers are rich enough to be economic.

Another variation are Komatiites, which seem to be restricted to very ancient ‘Archean’ terrains formed at a time when there was no free oxygen in the air. They are essentially ultra-mafic lavas that once flowed over the surface of the earth and were enriched in sulphur.  As the lavas cooled, the metals combined with the sulphur and the resulting immiscible liquid sank to the paleo-surface, where it accumulated in depressions and hollows forming sulphide concentrations. An example of this is Kambalda.

A magnetic image of the Kalahari Suture Zone, where Kavango is searching for massive sulphide orebodies 

Secondary concentrations

Secondary concentrations occur at some point in time after the intrusive has solidified (crystallised). The majority of these deposits are formed by hydrothermal alteration. Essentially, this is the activity of very hot water (or brines) circulating through the intrusive and concentrating the metals further, either within the intrusive itself or transported some distance away, where the precipitation of the minerals is favourable.  These secondary deposits come in the form of re-crystallised sulphides or as oxides/carbonates and can be very high grade.

What do they look like?

On the surface, weathered massive or disseminated sulphide orebodies will form ‘gossan’. These are generally rusty coloured rocks with a rough, crinkly texture. Gossans can be very high grade, although metallurgically these metal oxide ores can be difficult to process. Massive sulphide ore is generally very heavy, formed of a mass of shiny suphide crystals, and will smell of suphur when hit with a hammer. Disseminated sulphide ore will have large numbers of shiny sulphide crystals within a matrix of the host rock (usually gabbro or altered mafic rock).

An example of the various layers of a sulphide mineral vein, with gossan at the top (Credit: Bastian Asmus, Archaeometallurgy) 

How are they found?

The metal particles within the sulphide crystals are too small to find with the naked eye in streams or soils.

Most of the oldest mines are sited where outcrops of gossan were discovered. Typically, the gossans were assayed for metal values. When these proved to be positive, drilling was conducted beneath the gossans to identify sulphide mineralisation below the level of oxidation. Usually, the oxides were not mined, due to the difficulty of extracting the metal.

Although there have been some discoveries in very remote areas in recent times by finding the gossans, most exploration for magmatic sulphide ore bodies is now conducted by remote sensing for hidden orebodies.

Before starting the search, geologists will select areas where a discovery is likely. These will be in areas where mafic/ultra-mafic intrusives are known to occur. Preferably this will be in association with a major structural fault along which intrusives from below the crust can migrate. 

Soil sampling can identify metals coming to surface, whilst geophysical techniques can identify massive sulphide bodies at depth by testing the electro-magnetic signals of the ground being explored. This can be done by airborne EM surveys, which can cover hundreds of kms of survey per day and will typically identify conductors to 200 - 300m depth.

EM conductors identified from the airborne surveys are then followed up by ground-based geophysical techniques to identify drilling targets. Depths to targets can be calculated and drilling can be conducted to investigate the anomalies. 

How are they extracted? 

Once a metal sulphide deposit has been identified, drilled out and a resource calculated; a feasibility study will be carried out to determine whether it can be mined economically. It will be decided how the deposit is to be mined; open cast or underground mining.

During the mining operation, only the ore of a certain grade will be processed. The ore will then be crushed and milled to liberate the sulphides from the host rock (gangue). The resulting product will then undergo floatation which will separate the sulphides from the guague. The sulphides are then smelted to burn off the sulphur (usually captured), leaving a metal matte, which is then sent to a refinery where the economic metals are separated and extracted. The product is either sold at the matte stage or as a metallic product after refining.

Author: Mike Moles

Mike is the co-founder of Kavango Resources (LSE:KAV), where he is currently a non-executive director and responsible for exploration strategy in Botswana. He has 30 years of experience in mineral exploration in southern Africa and has formerly held senior roles at Delta Gold, Reunion Mining, and Lonmin.

African Battery Metals (LSE:ABM) sat at 0.4p on Friday after securing an option to acquire a stake in a Tanzania-based nickel project. The firm has entered an option agreement with AIM-listed exploration and development company Katoro Gold (LSE:KAT). This gives it the right to purchase a 25pc position in Katoro’s Haneti project as well as a stake in Katoro itself.

Haneti comprises tenements that cover around 5,000km2 and are prospective for nickel, platinum group elements, cobalt, copper, gold, and lithium. Around $1.5m worth of work has been carried out at the project to date, identifying grades of up to 13.6pc nickel.

Katoro believes that Haneti could host a chonolith type nickel sulphide deposit and is principally targeting a prospect called Mihanza Hill. It is currently carrying out a 2019 work programme to determine whether disseminated or massive sulphide mineralisation is present.

Under the terms of its agreement, African Battery has acquired an initial £25,000 worth of Katoro shares at 1p each.  Each of these shares comes with a three-year warrant that is exercisable at 1.25p. This also gives the business exposure to Katoro’s other asset, which includes the Imweru and Lubando gold projects in Tanzania. Together, these host a JORC compliant gold resource 754,980oz gold.

Following this initial purchase, African Battery has been granted a 60-day option, giving it time to carry out due diligence on Katoro’s projects, with a particular focus on Haneti. If the business decides to exercise this option, it will acquire around £75,000 worth of shares with warrants attached.

It will also acquire a 25pc stake in Haneti, through Katoro’s subsidiary Kibo Nickel.  In this scenario, it will be required to fund a 25pc share of Haneti’s costs. Finally, African Battery will have the option to acquire a further 10pc position in Haneti for £25,000 a year on from the day it exercises its option.

African Battery’s exec director Paul Johnson said Friday’s deal complements the firm’s existing interests and provides it with some diversification without diverting its focus away from Africa and battery metal projects.

‘Alongside our existing copper and cobalt interests, the addition of nickel into our portfolio exposes our shareholders to another strategically significant metal where we believe the forward supply/demand dynamics are looking highly attractive,’ he said.

‘We are looking to work with Katoro on an accelerated exploration programme at Haneti to build on the knowledge that Katoro, and previous owner Kibo Mining plc, gathered.  This includes data demonstrating 13.59% nickel in sampling of outcrops. We look forward to reporting back on developments in respect of this strategic transaction in the near future.’

Friday’s update comes after African Battery announced that it had returned from the first stage of its strategic and operational review with a ‘robust financial position’.

The exploration player was suspended from trading in December as demands from short-term creditors exceeded available working capital. However, it was re-admitted to the market last month days after shareholders voted in favour of a host of proposals aimed and restructuring the business. This included a conditional placing and subscription to raise £1m at 0.5p a share and help pay off creditors.

In an update, African Battery said it has now paid all material creditor balances through either cash or share settlements. It now has no material debt and free working capital of around £860,000. It believes this figure will cover corporate plc costs, anticipated project exploration, and expenditure on existing interests for 12 months.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The article expresses the views of the Author solely and does not necessarily express the views of MiningMaven.com and Catalyst Information Services Ltd or their connected parties who are not responsible for its content or accuracy

News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance. Readers are recommended to seek the advice of appropriate professionals when considering investments in small capital.

Exploration business Oriole Resource rose to 0.37p on Wednesday after updating investors on its strategic repositioning, exploration progress in Cameroon and Senegal, and strong financial position. Here, chief executive Tim Livesey and chief financial officer Bob Smeeton talk us through the significance of the figures and why they believe Oriole remains highly undervalued in the retail market.

Financial discipline

The headline figure from the results was an operating loss of £2.55m for the year to 31 December 2018, a significant improvement on the loss of £7.5m in the prior year, where the higher operating costs were due mainly to the attempted acquisition of Australian listed Crusader Resources.

Chief financial officer Bob Smeeton tells us this drop in operating costs has arisen from the business’s strategic repositioning over the year as well as an increased cost discipline over the period, which resulted in an impressive 26pc reduction in administration costs.

This saw Oriole introduce a renewed strategic focus on high-impact, early-stage exploration assets. Principally, it shifted its focus onto its existing exploration project in Senegal and a new project in Cameroon while continuing its efforts to monetise its legacy and royalty assets in Turkey.

Elsewhere, the firm introduced a new management team headed up by chief executive Tim Livesey, who joined in March last year to replace Bob Foster, who had been in an interim role. Finally, to reflect its repositioning, the outfit changed its name to Oriole Resources from Stratex International in September.

We basically did all of the administrative changes that we could do without having to close down and re-open the firm,’ Smeeton tells us. ‘We have refreshed the company entirely. We are on a much more even keel now, following a difficult 2017. The reduction in administrative costs reflects the agreed revised compensation positions of the new management team and Board, additional fiscal discipline around advisers and other corporate running costs, and this will continue.’

Expanding on this final point, Smeeton said the successful resolution of a long-running VAT dispute with HMRC in February 2019 is likely to cut administration costs further this year. Indeed, the organisation incurred £170,000 worth of adviser fees in relation to the dispute last year, which will now fall away.

He adds that the resolution will also boost Oriole’s cash balance, as it expects to receive a £500k rebate from the UK tax office in Q2 2019. The organisation’s cash, which sat at £1.29m at the end of 2018, will also be boosted by a recent $500k success fee from its Turkish partners on the Karaağaç gold project and a £40k R&D credit noted last month, from activities in the 2016 tax year.  Further R&D rebates are expected for 2017 & 2018. Smeeton says this should cover the cost of its planned work activities and administration for the remainder of the year.

‘Obviously, as a junior explorer the more work we do, the more money we will spend,’ he added. ‘However, we are in a fairly comfortable position at the moment.’

New assets

Wednesday’s results also saw Oriole update investors on its 85pc-owned Dalafin project in Senegal. In March last year, the business announced that it had struck an agreement with IAMGOLD that would allow the mining major to earn a 70pc interest in the licence over six years by spending $8m. Work has commenced, with IAMGOLD meeting and exceeding its first year spending commitment.

The firm has confirmed mineralisation within multiple zones at the Madina Bafe target in the south of the licence area. This is a priority for the business as it falls within 10km of its 2.59Moz Boto gold project, where it has applied for a mining licence.

Last month, IAMGOLD outlined a $1m year two work programme for the asset that will see it carry out another c.13,000m of AC and RC drilling. This will include work at the Saroudia prospect, which Livesey tells us is also just a stone’s throw away from Boto.

A diagram showing the location of Dalafin and its prospects

Elsewhere, Oriole provided an update on its new Bibemi and Wapouzé ventures in Cameroon. Last year, the firm signed an agreement to earn-in up to a 90pc stake in the sites by spending $3.12m over four years. It has already completed a rock-chip sampling programme at Bibemi that demonstrated ‘bonanza’ grades, with multiple assays returning in excess of 100g/t.

Meanwhile, it started a phase one trenching programme on the licence late last year, with initial results this month confirming multiple zones of orogenic-style gold mineralisation. This includes 6m at 3.02g/t with individual veins returning up to 13.6g/t gold. The organisation is currently waiting for its remaining trenching results but has already commenced Phase 2 trenching across key results to date At the earlier-stage Wapouzé asset the firm has started a systematic soil sampling programme, with results expected soon.

With Cameroon’s wet season now approaching, Livesey told us that Oriole will spend some time analysing its geological results at both sites to date with a view to progressing them later this year:

‘We are interrogating the geological and sampling data that we have received and are still receiving. We will then try to understand the controls on the mineralisation at Bibemi and then apply that knowledge to the next phase of exploration. We will also look at whether the findings also apply at Wapouzé or if it is a completely different system. Ultimately, the goal is to get to the point where we can maximise our chances of success with some targeted drilling.

A diagram showing the location of Oriole's assets in Cameroon

Moving forward

Finally, in its outlook for 2019, Oriole said there is a ‘great opportunity’ for Oriole to establish itself as a high-quality exploration player after building foundations throughout last year. Despite the progress made by Oriole since its restructuring, the company’s shares have struggled to progress and currently sit at 0.38p. This gives the business a market cap of £2.63, little over its current cash balance.


The recent resource bear market has provided little support here, and Livesey told us he believes that Oriole is currently highly under-valued. However, he remains hopeful moving forward:

We consider Oriole to be massively undervalued with its current market cap close to cash in bank,’ he said. ‘We should be trading significantly higher than where we are today when one considers the money we have got in the bank, the fact we have IAMGOLD as a partner, the value being realised in our legacy assets, and the progress we are making as first movers in a new gold district in Cameroon. It just doesn’t make sense at all. Moving forward, we will continue to progress our efficient and cost-effective exploration programmes, and we are sure the market will eventually catch on. We have a free carry in Senegal, cash in the bank and a team delivering on exploration in Cameroon.  It is a very exciting time for us and we look forward to updating investors over the coming months.’

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

On Thursday, Horizontal Minerals (LSE:HZM) reported positive results from metallurgical and smelting test work at its Vermelho nickel cobalt project. Samples from Vermelho, which is located in northern Brazil, returned an average grade of 31.8pc nickel. The firm says the results confirm the suitability of a proposed conventional Rotary Kiln Electric Furnace for processing ore from the resource. 

The data will add to a pre-feasibility study for Vermelho which is currently underway. A study produced by the previous owner, Vale S.A. demonstrated the project had the capacity to produce 46k tonnes of nickel and 2.5k tonnes of cobalt per year.

Horizonte CEO Jeremy Martin said, "We are pleased to report the test work has confirmed that it is possible to produce high grade, commercial specification ferronickel from the saprolite and transition ore at Vermelho. These results confirm the suitability of the proposed conventional Rotary Kiln Electric Furnace ("RKEF") process selected for the Company's Araguaia ferronickel project is also suitable for processing Vermelho ore. In parallel the test work at SGS Lakefield on limonite samples from Vermelho to demonstrate its suitability for production of high purity nickel and cobalt sulphate to supply the EV battery markets is at an advanced stage and we look forward to reporting on the results of this work.

The company is also developing the Araguaia Nickel Project in the same region of Brazil. The project is expected to produce an average of 14.5k tonnes of nickel a year, with an opportunity to double this through the construction of a second Rotary Kiln Electric Furnace process line. Horizonte produced a feasibility study confirming Araguaia as a Tier-1 project with a large, high-scale resource last October.

Jeremey Martin added: Elsewhere we continue to advance the construction financing on the Araguaia Project. Against a backdrop of global growth in nickel consumption running at around 4 to 5% per year with stainless steel currently accounting for two thirds of demand. Going forwards and coupled with this continued growth in stainless steel, nickel use in battery chemistry is set to increase significantly. This robust demand story for nickel positions Horizonte well, owning 100% of two Tier 1 nickel projects, within trucking distance of each other with the potential to produce 40,000 to 50,000 tonnes per year of nickel. 

Horizonte’s share price was hit recently with a TR-1 notification of major holdings released on 5th March revealing significant holder City Financial had sold the bulk of its stake.  The investment firm was forced to sell its holding as it is entering administration, offering a potentially good opportunity for other interested investors to enter the stock.

Author: Stuart Langelaan

The Author holds a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

Catalyst Information Services Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

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