Tuesday saw Rockfire Resources (LSE:ROCK) confirm its exit from Papua New Guinea, leading shares in the Australia-focused business to inch down 3.33p to 0.65p.
The business’s move came after Papua New Guinea’s Minister for Mining decided not to renew its Nakru licence, which has been under review since September 2017. In reaching this conclusion, the minister noted that Rockfire had held the tenement since 2012 but had not identified any resources.
With Nakru representing Rockfire’s one remaining licence in Papua New Guinea, the organisation will now be able to maximise its focus on its 100pc-owned large-scale gold and copper projects in Queensland.
These include Copperhead, which is a coherent surface copper anomaly covering 3km by 2km in area. Five diamond drill holes in 1972 encountered visible copper and molybdenum minerals, including two that were 300m long. Results from all the samples collected at Copperhead average 0.35pc copper equivalent.
According to Rockfire’s chief executive David Price, the project potentially hosts a minimum of 300m of continuous copper mineralisation as all existing holes terminate with visible copper minerals still present. As such, the business is preparing for its maiden drilling program at the asset.
Meanwhile, the business also owns a long-term porphyry copper project called Copper Dome, where previous drilling has encountered very promising intercepts. These include 15m at 0.88pc copper, including 4.5m at 2.28pc copper, 12m at 0.61pc copper, including 3m at 1.24pc copper. and 51m at 0.20g/t gold.
On today’s news, Price said the following: ‘Today's announcement signifies the Group's exit from Papua New Guinea, a process which began almost two years ago under the direction of the then new management team, with the objective of focusing on more favourable jurisdictions and prospects that, the directors believe, can be more readily advanced to a JORC resource. This has recently been supported by our maiden gold resource at Lighthouse in Queensland, something we also plan to achieve at our Copperhead Project, also in Queensland.’
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) fell 6.3pc to 3.75p on Thursday morning as it revealed that it had taken another step forward in the drilling of its Ditau Camp prospect Botswana.
The £6m exploration firm said it has now received assay results for two holes drilled earlier this year at the prospective site from a business called Genalysis Laboratories in Australia. Genanalysis assayed a total of 489 core samples prepared by Intertek Laboratories in Johannesburg for 65 elements. It then carried out 12 duplicate check assays, ran 14 control standards and 14 blanks during the assay run.
Having received the assay results, Kavango is now undertaking its own program of checks and duplicates at an independent laboratory as per standard industry practice.
Ditau Camp forms part of Kavango’s KSZ project in Botswana, where it is targeting the discovery of world-class mineral deposits at depth using industry-leading drilling and sampling techniques. The prospect is underlain by magnetic and gravity anomalies that suggest a 7km x 5km intrusive body at depth. The alteration zone was discovered using ground-based geophysical techniques.
In Thursday’s update, Kavango’s chief executive said: ‘We are pleased to have received the assay results from the two drill holes at Ditau. Kavango is now completing its own check assays at an independent laboratory in South Africa, which is normal industry practice. We will then be in a position to fully check, assess and interpret the results so as to formulate our plans for Ditau.’
He added that Kavango’s preferred option would be to farm-out Ditau Camp to an industry partner due to its size and the firm’s ongoing, primary focus on the Kalahari Suture Zone (KSZ) structure in south Botswana. Drilling is expected to begin at the 450km-long magnetic anomaly, on which the majority of Kavango’s 15 prospecting licences sit, later this year.
Kavango is exploring the trend for copper, nickel, and PGE-rich sulphide orebodies. Despite the area displaying a geological setting with distinct similarities to that hosting the world-class Norilsk Ni-Cu-PGE orebodies in Siberia, it has not previously been explored using modern techniques.
Thursday’s news comes just several days after Kavango announced that it had acquired a new prospecting licence at Ditau. The new area covers 916.4km2 to the south-west of the organisation’s existing licence and includes the extensions of the Ditau geological and geophysical structures that have potential for base metal mineralisation. In a statement, Foster said that Kavango felt that the new licence could be ‘instrumental in the farming-out of Ditau.
To read our recent investor Q&A session with Kavango Resources’ chief geologist Mike Moles, please click here.
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
After listing as a cash shell in November, Cobra Resources (LSE:COBR) unveiled the first major step in its plans to take advantage of a decade-long lack of natural resources development projects investment in March. The business acquired the rights to a $5m farm-in over a highly prospective gold project called Wudinna, that already has a JORC compliant resource, which the management believe can be built on substantially and has the potential to develop into a multi-million-ounce gold operation. It also has complete ownership of an underexplored copper mine called Prince Alfred. With Cobra gearing up for major work programmes at both of the South Australia-based assets, we asked new MD Craig Moulton why he thinks investors should get on at the ground floor when the firm resumes trading.
Under-valued opportunities
Cobra Resources is an exploration and mining company formed to take advantage of a significant lack of investment in natural resources development projects over the last decade. The firm believes weak market conditions have given rise to many opportunities to buy undervalued and advanced assets that are currently orphaned because of their operators’ restricted capital. The organisation will only approach an opportunity if it believes it is attractively valued and can be developed into a sustainable operation through the application of disciplined and structured exploration and analysis.
Backing up these ambitious goals is Cobra’s strong commercial and technical management team who collectively boast more than 100 years of experience in the natural resources sector.
Leading the firm is Craig Moulton, who was hired as managing director in March this year. Moulton is a geologist and mineral economist who has spent 25 years in senior roles at firms like Rio Tinto, Cliffs, and Wood Mackenzie. Working alongside Moulton is non-executive director Rolf Gerritsen, Cobra’s founding chief executive, who will be well-known to UK junior mining investors as the chief executive of Metal NRG.
Finally, fellow non-executive director Greg Hancock is a corporate finance specialist who has spent more than 35 years in the capital markets of Australia and the UK. Alongside Cobra, he holds board positions at Ausquest, BMG Resources, Zeta Petroleum, Strata X Energy, Golden State Mining, and King Island Scheelite.
Cobra listed as a cash shell in London last November alongside a £523,500 placing at 1.5p a share that valued it at c.£1m. It also issued warrants on a one-for-one basis that will raise an additional £1.3m if they are all exercised. The firm immediately started to evaluate acquisition opportunities before announcing the suspension of its shares this March when it purchased a business called Lady Alice Mines.
Developing Wudinna
As part of March’s transaction, Cobra took on Lady Alice’s farm-in agreement with ASX-listed Andromeda Metals for an advanced South Australian gold project called Wudinna. Once owned by Newcrest, Wudinna comprises six under-explored tenements covering 1,928km2 in the Central Gawler Gold province. This is a 450km arcuate belt containing well-known gold deposits like the Tunkillia and Tarcoola projects and Alliance Resources’ Weednanna asset.
Mineralisation at Wudinna is hosted by shallow-plunging, stacked, quartz-pyrite veins, meaning it is under shallow cover. However, advanced geochemical sampling techniques to date have proved useful in locating high-grade mineralisation.
Last month saw Cobra update its mineral resource estimate for Wudinna to 4.43MMts of ore at 1.5g/t gold for 211,000oz using a 0.5g/t gold cut-off grade. Digging deeper, the asset’s three primary deposits, Barns, Baggy Green, and White Tank, are estimated to house 104,000oz, 94,400oz, and 13,000oz of gold respectively.
Cobra was able to increase Wudinna’s total estimated gold by 5pc and its resource tonnes by 15pc without carrying out any drilling. Instead, it approached the three deposits with a different mineralisation interpretation and variography than that used in previous estimates. Moulton says this bodes well for Cobra approach to the project moving forward:
‘We now have a much better understanding of the geological continuity at the project.. That is exciting from a resource point of view. It then flows into how you do your exploration. We have a number of targets, and we can now approach these with a better understanding of the geology. We have also done more work around the geochemistry, so we are creating a really solid exploration model. I think the resource upgrade demonstrated the value that can be unlocked at Wudinna.’
Under the terms of Lady Alice’s farm-in, Cobra can spend £5m at Wudinna over three stages to earn a 75pc interest in the project. Specifically, the first stage enables Cobra to earn a 50pc position in the project by spending A$2.1m on exploration within three years of the farm-in being agreed. It can then obtain a 65pc stake by paying another A$1.65m over a further two-year window and a 75pc position by spending a final $1.25m during an additional 12-month period.
Map showing deposits and anomalies currently located on Cobra’s Wudinna project
Cobra’s plans to spend its money on following up on what it believes to be a continuity of mineralisation across Wudinna’s three primary deposits. Meanwhile, the company also plans to work on the six additional, priority target anomalies it has defined across the project, some of which boast larger geochemical signatures than both Barns and Baggy Green. With Wudinna’s named deposits currently covering a very small portion of its total area, Moulton says new target anomalies will be pivotal in realising the asset’s actual value moving ahead.
‘We are talking about working on an orebody that is very interesting geologically, we know we are within a mineralised system, and has been completely underexplored. New targets can help resources get to multiples of where they currently sit. This is not greenfield exploration; this is really advanced exploration into resource development. What’s more, we are getting it at early exploration prices.’
The remainder of 2019 will see Cobra complete test modelling at its six priority targets and test resource extensions at Baggy Green. This latter work will see it test mineralisation at Baggy Green far-North, check northern and southern extensions of Baggy Green South, and complete infill geochemical sampling. Following this, the firm hopes to define new resources at two to three of its best drill results in 2020 with the ultimate aim of doubling or tripling its existing JORC resource to more than 1MMoz of gold.
Added bonus
As part of the Lady Alice acquisition, Cobra has also taken control of Prince Alfred, a historic copper mine located around 100km north-east of a town called Port Augusta in South Australia. Mineralisation at the project is stratiform and believed to be shear-hosted with grades mined historically of around 5pc copper.
Although no records remain, Prince Alfred was discovered in 1866 and operated between 1869 and 1874 and early parts of the twentieth century. Work ultimately ceased as a result of technical limitations and a collapse in copper prices. All-in-all, it has been estimated that around 40,000ts of ore at about 5pc copper have been recovered from the project over the years to a depth of 170 feet.
Prince Alfred copper mine, 1915
To date, the depth of mineralisation at Prince Alfred is yet to be tested. South Australia’s Mines Department came close in 1960 when it drilled two holes to check beneath the mine. However, one hole stopped short of mineralisation due to a miscalculation, and the other is thought to have tested outside the southern boundary of the mineralised structure. Cobra aims to change this over 2018 by examining the deeper mineralisation with five to seven holes and downhole geophysics. If this work is successful, then the business will then get to work on a further programme aimed at defining a JORC resource of between 1-2MMts at 2-5pc copper at the asset.
With Prince Alfred coming as something of a bonus alongside Wudinna in the Lady Alice deal, Moulton said the low cost of work means the asset offers no downside or risk compared to a large amount of upside potential.
‘Prince Alfred is brownfield exploration targeting extensions of copper ore from an existing orebody. It is something we can test quickly before deciding on whether it represents a significant opportunity. If it does not, then we will simply divert the allocated funds into advancing Wudinna. On the other hand, if it is successful, then the opportunity value is huge.’
Community support
Alongside their prospectivity, Moulton believes the location of Cobra’s assets will give the business a critical advantage over some of its peers moving forward. Indeed, not only is South Australia an extremely stable jurisdiction with a rich history of mining, Cobra’s board has already been able to use its strong understanding of the area to progress discussions with regulators.
‘South Australia is a supportive jurisdiction with a clear and predictable regulatory framework. Unlike many other areas, the government is supportive of mining development and exploration as long as it is managed in a socially and environmentally sensitive way. . When we started talking to the local authorities, and they learned of our plans to list the assets in London, they were supportive. ‘This sort of partnership creates a positive dynamic from day one. While Cobra will have to meet all of the necessary environmental controls, the government wants us and other explorers to develop the next mine in South Australia.’
Over the long-term, Cobra hopes that its exposure to projects like Wudinna and Prince Alfred will position it strongly for the next forecast 'up-cycle' across commodities, . With this in mind, Moulton believes that Cobra’s return from suspension will represent an excellent time for investors to get in on the ground floor with a firm that is very much at the beginning of its journey.
‘It is all in front of Cobra in terms of value uplift,’ he says. ‘I think that the company boasts several highly attractive qualities, and the fact that our enterprise value will be incredibly low when we return from suspension only serves to emphasise this. We have plenty of experience, an option over a significant resource base in an established a mineralised system, and a considerable amount of upside potential.There is not going to be many investment opportunities where you can get exposure to over 200,000 ounces of gold in a portfolio at such a low price.
Cobra’s planned exploration milestone for 2019/20
Getting in at the ground floor
As well as being led by a knowledgeable and experienced management team, Cobra is set to acquire majority interests over two exciting assets – one boasting a gold resource and the other historic mining. Over the short-term, the firm’s exploration programmes will ensure a steady string of newsflow that, if its management’s instincts are correct, could be value generative. Looking into the future, any success at the two projects – and anything else the business adds to its portfolio – could position it very favourably when commodity markets conditions turn. A lot of this potential is, of course, speculative – as it always with an organisation as young as Cobra. However, the firm’s first steps and progress to date are highly encouraging and bode well for when it resumes trading.
Author: Daniel Flynn
The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
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 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
Kazera Global (LSE:KZG) jumped by nearly a quarter to 2p on Friday morning after announcing a better-than-expected mineral resource for two of its major deposits in Namibia.
The investment company announced a maiden JORC-compliant combined total indicated and inferred tantalite mineral resources for the Homestead and Purple Haze deposits of 324,600ts with upside potential. The deposits form part of the Namibia Tantalite Investment (NTI) Mine, in which Kazera holds exposure through its stake in a business called African Tantalum.
The organisation went on to add that strong grades of tantalite were demonstrated across both deposits, with an average grade of 323ppm tantalum pentoxide including 911ppm at Purple Haze. Meanwhile, higher-than-anticipated lithium grades were encountered across both deposits, with an average grade of 4,410ppm lithium dioxide.
All-in-all, Kazera said Homestead’s resources were in line with pre-drill estimates, showing potential for economic tantalite and lithium potential. However, Purple Haze’s resources exceeded expectations with total indicated and inferred resources of 125.5 kt alongside an average tantalite grade of 459 ppm and average lithium grade of 5,259 ppm across the deposit.
The parties developing the NTI mine now plan to add further resources to the project through exploration at Homestead and Purple Haze alongside two additional deposits called White City and Signaalberg.
Kazera’s chief executive Larry Johnson added: ‘We are delighted by these initial results particularly those at Purple Haze where there exists significant opportunity to deliver high quantities and grades of both tantalite and lithium. The initial resource numbers at Purple Haze were ahead of what we initially expected and we look forward to additional resources there and at White City, Signaalberg and through additional drilling at Homestead.
‘With a water supply option, government certified via the Orange River, and a maiden JORC compliant Mineral Resource confirmed, NTI continues to show the capacity to become a long-term mine for stable production. Today's result represents the first of a number of phases in identifying the total mineralization on the portfolio.’
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
The share price of Arc Minerals (LSE:ARCM) jumped 15pc to 3.88p in early trading on Thursday after the firm revealed it has identified a large new target at its flagship asset, Zamsort. The new target, called West Lunga, contains anomalous copper over a 6km strike, with peak concentrations of 463 parts per million (ppm) of copper identified.
West Lunga sits in the western part of Arc’s licences in Zambia and shares the same horizon as the world-class Kamoa deposit. The new find is one of eight high priority areas on the license located in the Central African Copperbelt. Arc holds a 66pc interest in the Zamsort asset via an equity holding in privately owned Zamsort Limited.
Nick von Schirnding, Executive Chairman of Arc commented: "This is very encouraging news - especially having been identified by the discovery team of Kamoa, one of the largest high-grade copper discoveries of recent times. This development means we are going to review the ranking of our 14 priority drill targets and it is likely that we will prioritise West Lunga as one of our highest priority targets."
License area with the West Lunga target
Arc is also continuing to develop its more advanced Kalaba prospect at Zamsort. Kalaba is a copper-cobalt licence covering nine of 30 high priority targets ranked by a previous joint venture operated by Anglo American. First Quantum’s Sentinel and Kansanshi, and Barrick’s Lumwana mines are close by. The project has an existing near-surface estimated copper-cobalt oxide resource of 16.59Mt at 0.94pc copper and a historical exploration target of 150Mt. This makes it one of the most significant projects of its type in Zambia.
It’s been an exceptional week for those invested in Arc, with its share price leaping 38pc in the past 7 days. This was, in part, due to positive news released on Tuesday regarding its Cheyeza asset in Zambia. The company announced its maiden drilling campaign has confirmed significant copper mineralisation at Cheyeza East. Highlights included 25m @ 1.05pc Copper from 2m depth, including 1.7pc Copper over 9.3m from 18.5m. These initial holes were drilled in a 3km by 0.8km area where as much as 2,792 ppm of copper were identified in the soils.
The firm is continuing to drill to test the anomaly further, both along strike and down dip with an initial 1,200m diamond drill programme planned for each of the key targets. Once results are in from these exploratory drills, Arc will prioritise targets for more detailed work.
Von Schirnding said the drill results have ‘exceeded all our expectations both in terms of grade and thickness’ and highlights that a third hole located 200 metres south also showed significant mineralisation.
Author: Stuart Langelaan
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
Arc Minerals (LSE:ARCM) bounced 6.5pc to 3.3p on Tuesday morning after revealing ‘highly-encouraging’ drilling results at its Cheyeza copper target in Zambia.
The £23.3m explorer and developer said its maiden drill program confirmed the significant copper mineralisation discovered back in June. This was based within a 3km by 0.8km area of particular interest at Cheyeza East where Arc identified up to 2,792 parts per million copper.
On Tuesday, the company said that one of its holes in the area assayed 25m at 1.05pc copper from 2m depth including 1.7pc copper over 9.3m from 18.5m. This intersection featured an even more impressive 13.34pc copper over 0.56m from 27.24m. Beyond this, another hole drilled 200m south also indicated significant mineralisation.
Cheyeza was one of several areas identified by geophysics and geochemistry work completed by Arc at its 66pc-owned Zamsort asset last year. The business said it has now deployed two rigs to the east of the asset so it can continue to test the full extent of its anomaly both along strike and down dip. It plans to prioritise targets for further, detailed exploratory activities.
Arc’s executive chairman Nick von Schirnding said Tuesday’s results ‘exceeded all our expectations both in terms of grade and thickness.’ He added: ‘While we are still at an early stage in the drilling programme, these results are highly encouraging and we have now deployed two rigs to Cheyeza East. Importantly our third hole 200 meters south also shows significant mineralization.’
Another target identified by Arc at Zamsort last year was Lumbeta, which stretches for 11km and is associated with the crest of a fold. According to Arc, these formations can act as mineralisation traps and form high-grade deposits. Upon announcing the discoveries in February, Arc’s executive chairman von Schirnding said they could represent a ‘potential game changer’ for the firm.
Elsewhere, Arc is continuing to develop its more advanced Kalaba prospect at Zamsort. Kalaba is a copper-cobalt licence covering nine of 30 high priority targets ranked by a previous JV operated by Anglo American. It is found near First Quantum’s Sentinel and Kansanshi and Barrick’s Lumwana mines. The project has an existing near-surface estimated copper-cobalt oxide resource of 16.59Mt at 0.94pc copper and a historical exploration target of 150Mt. This makes it one of the most significant projects of its type in Zambia.
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 hitting 2.3p in March after securing a game-changing farm-in agreement with world-leading gold miner Newcrest for its Havieron asset in Western Australia, shares in Greatland Gold (LSE:GGP) have slipped to 1.7p. Over this period, Newcrest has begun the initial work at Havieron and Greatland has made considerable progress across the remainder of its Paterson project. With major developments on the horizon, MiningMaven spoke to Greatland’s CEO Gervaise Heddle and CTO Callum Baxter about how their plans in Paterson could trigger a considerable re-rate in the firm’s share price.
Unique approach
Greatland, which currently has a £55m market cap, is an AIM-listed natural resource exploration and development business operating primarily in the gold, copper, nickel, and cobalt markets. The company identifies and advances projects that could house large mineralised systems and holds on to them for as long as possible to maximise its range of options for monetisation.
Greatland applies the most up-to-date exploration techniques possible in underexplored areas when looking for projects. Heddle says this allows the outfit to evaluate a site’s exploration potential in the lowest-cost and fastest way possible.
‘As an explorer, we recognise that combining leading edge exploration techniques with a strict capital allocation process is critical,’ he tells us. ‘We are continuously trying to make the next significant discovery, but we also actively bring in projects and ideas. Exploration is a creative process, and you have always got to think about how you approach assets and how you interpret the data you receive. By using an array of modern exploration techniques in a systematic manner, we have been able to uncover prospects previously missed by other miners.’
As it stands, Greatland owns six projects in Australia, a low-risk mining jurisdiction where its management team boasts decades of experience. The most advanced of these is its Paterson project, located in the Paterson province of Western Australia. The company owns three licences in the region spanning 385km2 of ground thought to be prospective for intrusion-related gold-copper systems.
The Paterson region hosts several long-standing, world-class gold and copper deposits, with notable examples including Newcrest’s Telfer mine and Metals X’s Nifty copper sulphide mine. The district has enjoyed something of a renaissance over recent months following a new wave of exploration licence applications and high levels of prospecting from key regional players like Rio Tinto.
A map of the major mining projects within the Paterson region of Western Australia
Despite Paterson sitting on the massive Proterozoic Orogen formations that hosts the globally-significant Tropicana and Nova deposits in Australia, the region remains highly under-explored. Baxter believes this is because the region’s geology requires a particular set of exploration skills that Greatland has been able to master.
‘Rio’s discovery at Winu and Greatland’s success at Havieron have opened everyone’s eyes up to the Paterson region because it looks like there should be more deposits out there,’ he tells us. ‘However, most of the area’s mineralisation does not pop out at surface as it’s undercover at depths anywhere from 5m to 400m below the surface. Alongside us, we believe there are only a handful of companies that understand the geophysical processes to be able to explore this mineralisation in the region. We are in a strong strategic position.’
Major opportunity
Greatland’s most advanced prospect in Paterson is Havieron, which is found 45km east of Telfer and 500km east of rail and port infrastructure at Port Hedland. The asset is a large geophysical target consisting of a coincident magnetic and gravity anomaly covering an area of around 1,000m by 1,000m.
Before its acquisition by Greatland, Havieron had been subject to minimal exploration despite encouraging early signs of prospectivity. Indeed, throughout the late nineties, six holes drilled by Newcrest intersected significant alternation including several high-grade zones with peak gold grades of 15.45g/t and peak copper grades of 2.5pc.
According to 3D models created by Greatland, Havieron offers the potential for mineralisation extending from 400m to more than 1,200m below surface -readily accessible using modern drilling equipment. In April last year, Greatland broke new ground when it followed up these models with its first drill campaign at the asset. This saw it complete four vertical core holes for a total of 2,400m of drilling. According to the firm, the work, which returned a 121m intercept at 2.93g/t gold and 0.23pc copper.
A subsequent, second drilling programme in September last year enhanced this potential even further by establishing new peak grades of 211.3g/t gold, 12.38pc copper, and 4,104ppm cobalt at the asset. This work also included a world-class combined intersection of 275m at 4.77g/t gold and 0.61pc copper.
Havieron’s excellent early drilling results captured the attention of Newcrest, a world-leading gold miner with operations spanning Australia, Papua New Guinea, and Indonesia. In March this year, Greatland announced that the major player had acquired the right to earn in up to a 70pc interest in the 12 blocks covering the Havieron target.
To secure this prominent position, Newcrest must spend up to US$65m and complete a series of exploration and development milestones in a four-stage farm-in over six years. The terms of each of these stages are outlined in the image below. Regardless of whether it decides to proceed with Havieron’s development, Newcrest must spend an initial US$5m on the asset within 12 months of the farm-in commencing.
The terms of Greatland’s farm-in deal with Newcrest for Havieron
Elsewhere, the farm-in sees Newcrest become manager of Havieron and grants it first right of refusal over the remainder of Greatland’s Paterson project licences. Heddle expects Havieron to become a cornerstone asset for Greatland if Newcrest’s efforts are successful.
Newcrest and Greatland have agreed in principle that all ore from the asset will be toll processed at Telfer. By leveraging Newcrest’s existing infrastructure at Telfer, Greatland believes they will reduce upfront capital costs, time to production, and time to first cash flows at Havieron. In turn, this is expected to give the project a significantly higher net present value than if the firms had to build a separate processing plant and infrastructure.
Newcrest got straight to work at Havieron completing a native title heritage survey and construction of a local field camp. Critically, it also revealed plans for a 10,000m drilling programme to define the extent of mineralisation along strike and at depth at Havieron, testing the system to a depth of 1,000m below surface. Newcrest’s drilling campaign has now commenced with two drill rigs active.
Wider potential
Moving away from Havieron, Greatland’s second considerable opportunity within its Paterson project is at Black Hills. The asset – purchased by the company in late 2017 – sits adjacent to Havieron’s north-western border and contains four distinct zones of mineralisation called Saddle Reefs, Eastern, Rogers, and Northern Granites. As with Havieron, the asset is regarded as having high potential or hosting gold deposits similar in style to Telfer.
Greatland completed its first exploration campaign at Black Hills in June last year. The work was an immediate success, with prospectors encountering many gold nuggets and pieces in bedrock within days of arriving on-site. Likewise, rock chip samples from the site contained gold grades of up to 81.7g/t and established an 800m strike length of surface gold mineralisation at Saddle Reefs. These results suggested that Black Hills could be prospective for near-surface, low-cost and low-risk exploration. They also went on to inform a 3DIP survey that outlined a large, buried chargeability anomaly at Saddle Reefs over 1,000m of strike.
Some of the gold nuggets identified by prospectors at Black Hills
This year has seen Greatland deliver further progress at Black Hills, notably completing a high-powered, deep-sending IP survey. This work, which concluded last month, extended the strike length of Saddle Reef’s anomaly by 400m. Greatland is now comparing historical IP datasets with its own results to select new drill targets and preparing a 6,000m drilling plan to test the areas covered by its target anomaly.
Greatland’s final Paterson project licence is Paterson Range East, which lies c.25km north of Havieron and covers 224sq kms of rocks prospective for Havieron-style gold-copper mineralisation. Greatland revealed last month that it was planning to conduct a low-level airborne magnetic survey over the entire licence. The work is expected to begin in early June and aims to increase the resolution of magnetic targets on the licence.
Baxter tells us that Greatland identified these targets as part of an internal review of historical regional geophysical and geochemical data over the western Paterson region following its success at Havieron. All-in-all, this work identified a total of approximately 20 Havieron-style targets that have yet to be tested on Greatland’s Paterson Range East licence.
The results of Greatland’s airborne survey will be used alongside other geophysical and geochemical data to prioritise targets to follow up with detailed modelling and drill testing.
Pushing ahead
Alongside its Paterson project, it is worth noting that Greatland owns several additional projects with significant potential. These will be covered in more detail in a later piece, but include the Firetower and Warrentinna projects in Tasmania, where numerous encouraging signs of gold prospectivity are yet to be explored fully. Meanwhile, in Western Australia, the firm also owns a vast greenstone belt called the Ernest Giles project, an asset that hosts two styles of potential gold mineralisation called Panorama, and a final prospect called Bromus.
A map showing the location of the assets in Greatland’s portfolio
Elsewhere, Greatland also intends to capitalise on general weakness in the junior resources sector by acquiring further projects. Heddle, a former fund manager, says he views Greatland’s assets like an investment portfolio, with the addition of new assets and the replacement of others proving pivotal when maximising returns for investors. His ambition is for this approach to lead to another major discovery that will see Greatland become a mid-tier miner when combined with its all-encompassing management style.
‘We are already getting out there and strengthening every aspect of the business,’ he says. ‘With these processes in place, I hope to grow Greatland’s business significantly from its current level. I think there is a realistic path to do that, although risk is attached. The exploration game is tough, but if we can apply the knowledge gained from our recent success and stick to a disciplined capital allocation approach, then we can maximise our chances to repeat this success.’
Can Greatland deliver?
Heddle’s plans are ambitious. However, they are by no means inconceivable. Within Paterson alone, Greatland boasts a substantial initial financial commitment from a global resources leader that could lead to a game-changing mine alongside additional projects and unexplored targets to boot. When this is combined the firm’s strong management team, wider portfolio prospects, and its cash in the bank (£4m as at 31 December 2018) its future potential seems bright. With Greatland’s shares falling to 1.7p since hitting 2.3p when the Newcrest deal was announced, a favourable Havieron development decision and steady exploration progress elsewhere could well prompt a re-rate.
This article first appeared on our sister site ValueTheMarkets.com at https://www.valuethemarkets.com/2019/06/12/we-are-in-a-strong-strategic-position-heddle-and-baxter-on-their-plans-and-outlook-for-greatland-gold-ggp/
Author: Daniel Flynn
The Author does not hold any 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.
Since listing in London last July, Kavango Resources (LSE:KAV) 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.
Recent weeks have seen Kavango’s shares enjoy a considerable rally as a result of strong drilling results at its Ditau prospect and progress in its ongoing airborne electromagnetic survey over the KSZ. Here, co-founder and seasoned geologist Mike Moles answers key questions from MiningMaven and investors around the firm’s recent newsflow and its plans moving forward.
Q) Kavango has recently completed an airborne VTEM survey over the Kalahari Suture Zone (KSZ). Could you please explain the limitations of the first VTEM survey, which was completed in October 2018, and what improvements were made for the second survey in February 2019. What were you hoping to find with the second survey?
A) In most AEM surveys, electro-magnetic waves are generated by towed equipment. The lower the frequency of the EM waves, the deeper they penetrate into the ground. A receiver on the aircraft measures the time delay in getting these signals back, and this measures the “conductivity” of the underlying rock.
The Phase 1 VTEM survey was carried out at a frequency of 25Hz. The higher frequency EM signals (50Hz or 25Hz) are absorbed by conductive layers in the ground, which is OK if you are looking for water in aquifers down to 100m depth. However, it is not so good if you are looking for deeply buried sulphide deposits at over 250m beneath conductive Kalahari salt pans or Karoo shales and mudstones.
The average depth penetration of the 25Hz VTEM survey was only 169 metres, so we were only just beginning to see the upper parts of conductors that could be indicative of mineralisation at our target depths. This meant we had to visit all 26 of the conductors identified in the VTEM survey and run some fairly extensive (and expensive) ground geophysical surveys over all of them to determine their potential for hosting mineralisation.
In the past, the main problem with the lower frequency surveys was noise. This was mostly due to the vibrations caused by the helicopter, and particularly that associated with wind-shear. After the disappointing depth penetration of the VTEM system, we learnt that the Danish company SkyTEM were claiming to have solved the noise issues with a 12.5Hz frequency system. Further enquiries and endorsements by companies that had used the system convinced Kavango to see if this new system would be available for our Phase 2 survey.
The added depth penetration of the SkyTEM system has made a huge difference to what we can “see” below the surface. It is like being able to see the whole body rather than just the top of its head.
Q) When Kavango first came to market, part of its pitch was that it expected to be able to release initial results from airborne surveys speedily. The company was able to provide results of the first airborne VTEM survey, and the identification of 26 conductors, within a very short time of completion. Release of results from the second survey has taken much longer. Why has the company changed its approach?
A) For the Phase 2 (SkyTEM) survey, it was decided to use some very hi-tech data processing that was being pioneered by a geophysics consultancy based in Copenhagen. This processing results in a very detailed 3D model of the ground covered by the survey. Because this consultancy is “well ahead of the game” in this work, there is much demand for their services. Our survey data had to wait in the queue. However, the work has now been finished, and Kavango are now evaluating the results.
Q) In December 2018 the company announced it had identified significant drill targets, after follow up ground surveys of the conductors identified in the first phase airborne VTEM survey. Could you please describe the process that was followed in the ground surveys, what the company was looking for and whether the company is following the same approach after the second airborne VTEM survey.
A) The follow-up process for the Phase 1 AEM survey involved the selection of 26 conductors by Kavango’s geophysics team together with geophysicists from the contractor (Geotech Ltd). Each conductor was given a number and visited on the ground. If the conductor appeared to be shallow and was overlain by a visible clay pan, the target was rejected for further follow up. Further selection was based upon whether the conductor had a surface (soil) geochemical anomaly sitting over it. This reduced the targets to eight. All of these were then surveyed by ground based CSAMT surveying (which is a type of EM). Of these, three were selected as “Significant Conductor Targets”.
The drilling of these targets was delayed because it was decided to drill the conductors discovered at the Ditau Camp Prospect (PL169) first. By the time the drilling at Ditau had been completed, the Phase 2 AEM data had identified further targets for evaluation. Once the Phase 2 targets have been followed up and prioritised, a KSZ drilling programme will be announced. This may include targets from the Phase 1 AEM survey.
Q) The recent RNS suggests the initial results of the second drill hole at Ditau were better than the first. Could you please describe what Kavango has already encountered across the two holes at Ditau and what the board hopes to see in the forthcoming results of the assay tests?
A) My view is that they both tell the same story. The main difference is that the first hole was stopped due to bad ground before it intersected the intrusive body at depth. The second hole intersected a gabbroic intrusive at 478m and was continued into the gabbro for a further 79m.
The geological interpretation of what we have discovered in these holes is still far from clear, but it seems quite unusual. The magnetics suggests that the gabbro is 7km by 5km in size with an unknown thickness. Both the gabbro itself and the overlying Karoo sedimentary rocks are highly altered. The fact that the alteration products are very similar for both the gabbro and the sediments suggests that the gabbro is of Karoo age (or even post-Karoo). Not only are both rock types altered but they are also highly deformed, suggesting some local (or even regional) tectonic event. Indeed, it seems possible that it was this tectonic event that led to the alteration rather than the intrusion of a molten magma into the sediments, which rarely produces such a degree of alteration.
A magnetic image of the Kalahari Suture Zone, where Kavango is searching for massive sulphide orebodies
Unfortunately, the portable XRF is not able to determine values for gold, silver, uranium, vanadium or PGEs. Of the Rare Earths, only Neodymium (Nd) and Praseodymium (Pr) can be detected. But the XRF does suggest that the alteration includes elevated arsenic, cobalt, copper, zinc and lead, as well as high levels of iron, potassium, calcium, titanium, barium, strontium and zirconium. Neodymium and Praseodymium run at around 0.2% for over 200m.
Kavango is obviously waiting with great interest to see what comes out of the assay results. Of particular interest will be values for Rare Earths, gold, uranium, copper and vanadium.
Q) Could you please explain the significance of the Karoo sediments and the roles they play in Kavango's model for the KSZ and Ditau. What is the company looking for there and what indicators is it hoping to find to prove its hypothesis of the presence of a Norilsk style deposit(s) in the region.
A) In most of southern Africa, the Karoo sediments were laid down “unconformably” on top of much older rocks of the Proterozoic Era. The sedimentary sequences began accumulating about 300 million years ago and this lasted for about 110 million years. In the KSZ area (including Ditau) the Karoo sediments are usually 200 to 300m thick and capped with up to 20m of much younger Kalahari sand.
Towards the end of the Karoo the old super-continent of Gondwana started to break up with South America drifting away from Africa. As it did so, deep seated faults appeared parallel to the main rift, or in some cases old fault lines re-opened allowing molten magma to intrude into the crustal rocks. It seems that the old KSZ discontinuity which had formally marked a very ancient craton edge was re-activated and formed a conduit for ascending magma. The magma was extruded onto the surface in the form of basaltic lavas. These lavas built up into thicknesses of several kilometres and covered most of southern Africa as well as parts of India, Antarctica and South America, which were then still part of Gondwana. Whilst most of the lavas have since eroded away, many of the magma chambers that fed the lava “fissures” remain as intrusive bodies buried within the Karoo sediments. It is these Karoo intrusive bodies that Kavango believes could be associated with metal bearing sulphide deposits.
We know that a similar chain of events took place at Norilsk (Siberia). Here, very rich sulphide ore bodies have been found in association with the magma chambers (or feeders). As at Norilsk, many of the intrusive bodies along the KSZ were emplaced within coal measures or coaly shales, where the high sulphur content of the host rocks may have facilitated the development of massive sulphide ore deposits.
As a general model, Kavango would expect to find such sulphide mineralisation within the lower Karoo sediments at depths of between 100m and 300m. However, the KSZ represents a 450km long zone of deep-seated faulting, intruded by magmatic bodies along its entire length. It is thus highly prospective for the discovery of any model of mineralisation associated with continental break-up and volcanism. Due to the depth of cover, the area has been largely ignored by mineral exploration companies. Only now have the geophysical and geochemical techniques become available to look beneath this cover for the large ore deposits that are likely to reside there.
Q) What is a gabbro and what is its significance?
A) Intrusive rocks start their life as molten magma at the interface between the solid crust and the semi-liquid outer mantle. Granite intrusions are made from re-cycled (molten) crustal material that has been brought down towards the mantle by subduction. But mafic and ultra-mafic intrusives are composed mainly of mantle-derived material that undergoes some degree of differentiation as it rises through the crust towards the surface. Magma that extrudes onto the surface cools fast and produces rocks with small crystals, whilst magma that cools slowly within the crust produces intrusives with more coarsely gained minerals. Gabbro is one of the most common mafic intrusives and the coarse-grained equivalent of basalt (lava).
Mafic and ultra-mafic magmas contain small amounts of precious and base metals. As the magma cools, these metals tend to find sites within crystallising silicate minerals and as such are not found in concentrations rich enough to form economic deposits. However, in certain circumstances, the metals can combine with “free” sulphur to form an immiscible liquid. This can accumulate in various areas within the magma chamber to form massive sulphide deposits. The extra sulphur required for “sulphur saturation” can be introduced by the incorporation of coal measures into the magma chamber during its emplacement.
Further concentration of the sulphur-rich liquid can occur by being forced cracks in the surrounding “country” rock as pressure builds up in the chamber; or much later, by hydrothermal fluids dissolving the sulphides and re-depositing them in more concentrated form elsewhere either within or outside the magma chamber.
Q) Could you please explain what the "alteration halo" is and why it is Kavango's principal interest at Ditau, as described in the recent RNS.
A) When a magmatic body is intruded into the country rock, it is extremely hot. Any water in the surrounding rocks becomes super-heated and can start to change the chemistry of both the country rocks and the cooling magma itself. This alteration has the capacity to “dissolve” certain elements within the mineral assemblages and deposit them, in concentrated form, in places where the temperature or pressure or chemistry of the hot liquid promotes deposition. This alteration is sometimes termed “an alteration halo”. However, as has been said in answer to an earlier question, gabbroic intrusions of the size underlying the Ditau prospect do not normally produce alteration halos hundreds of metres thick.
The intense alteration lying above the intrusive at Ditau appears to be around 300m thick, which is unusual. Both the Karoo sediments and the gabbro itself are also highly deformed. Kavango is interested in the mineralisation in the Karoo sediments because they are closer to surface. Generally, the deeper the mineral deposit is from surface, the higher the value of the mineralisation needs to be to make mining economically viable. Until we get the assay results back from the laboratory, we will not know if the alteration above the gabbro hosts economic resources of valuable minerals.
This article marks the first in a series of quarterly Q&A sessions between MiningMaven and Kavango on the behalf of Kavango’s investors. If you have any questions you would like answered in the next piece then please feel free to contact MiningMaven at This email address is being protected from spambots. You need JavaScript enabled to view it. or via our Twitter feed @theminingmaven.
Shares in Asiamet (LSE:ARS) dropped 11.7pc to 4.7p on Friday following the release of series of updates for its BKM copper deposit in Central Kalimantan, Indonesia. Among the updates, Asiamet revealed that it has now completed a feasibility study on developing BKM using open pit mining and a solvent extraction-electrowinning copper heap leach.
The work gave the project an initial nine-year mine life producing up to 25,000ts of copper cathode per annum alongside initial capital expenditure of $192m. What’s more, the study highlighted additional value enhancement opportunities at the project with the potential to improve valuation by a minimum of $35 million on a risked weighted basis.
However, some investors were left underwhelmed by the study’s post-tax NPV(8) for the project of $133.5m and its 19.5pc internal rate of return. In comparison, a previous PEA for the project gave it an after tax NPV10 of $204m and an after rax IRR of 39pc, according to Asiamet’s website. What’s more, the study applied an economic assumption of a long-term copper price of $3.30/lb, a significant premium to where the metal is currently trading.
However, some would argue that this assumption reflects the belief of many that the red metal is entering an exciting phase moving forward that could make it a stand-out medium to long-term investment. As we covered in our recent ‘View from the City’ article on Asiamet, these forecasts are driven by an expected lack of supply as demand for copper increases from the electric vehicle and developing economies like China.
In a further update on Friday, Asiamet revealed a maiden ore reserve for BKM. This comprised 137k contained tonnes of copper in the proved category, 166k contained tonnes of copper in the probable category, and, in turn, 303k contained tonnes of copper in the proved and probable category. Finally, the firm also released an update copper resource for the asset that gave it total resources of 69.6Mt at 0.6pc copper for 451.9k of contained copper.
Regardless of investors’ reactions to the feasibility study, Asiamet said the results pave the way for it to enter detailed discussions with potential partners and financial institutions who have expressed an interest in BKM. Asiamet’s chief executive Peter Bird added that the project evaluation ‘greatly exceeds’ the company’s current £48.5m market cap. He said that limited value has also been ascribed to the other high potential project’s in the business’s portfolio, which include BKZ and the large Beutong project.
‘Completion of the BFS is a major milestone for Asiamet. We are very pleased with the outputs derived as they deliver a technically and financially robust project that can be significantly further improved through a number of clearly defined initiatives,’ he said.
‘The value enhancement initiatives together with the exceptional exploration upside identified proximal to the BKM project have the potential to extend mine life and provide a substantial uplift in overall project value. Evaluation of these items is next on the agenda with resultant outcomes to be considered and followed by the detailed engineering and design phase.’
‘Having successfully completed the Feasibility Study, we are now in a position to complete detailed discussions with potential partners and advance an array of debt and equity financing opportunities. We look forward to providing an update on these initiatives over the coming weeks and months.’
To read an analysis of Asiamet and its prospects from our sister site ValueTheMarkets in its recent ‘View from the City’ report, please click here.
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
Indonesia-focused resources business Asiamet (LSE:ARS) has enjoyed a strong start to the year, with its shares rising from 4.2p to their current 6.4p. This gives the company a market cap of £59m. With one of its key copper assets approaching an investment decision and the development of its tier one Beutong project on the horizon, there is speculation in the City that Asiamet might be an attractive takeover target.
The view is that the prospectivity of Asiamet’s portfolio might place it far ahead of its peers in the event that the next copper bull-run forces major resource players to make a scramble for supply of the red metal. Here, we take a look at the company and the prospects it offers.
Continue reading by downloading our ‘View From The City’ PDF report…
Map showing deposits and anomalies currently located on Cobra’s Wudinna project
Cobra’s planned exploration milestone for 2019/20
