News that caught my eye this week No.5
More Cu in South Australia and NT (maybe), more manganese for ESR, a possible undercover porphyry belt and a big nickel EM Survey
Hi All,
A lot of news has come out over the last week relating to ongoing and upcoming work so I cover a few more names than normal. Given I have mentioned a few companies across my various articles I decided to come up with a tracker that will be a feature from next week onwards. These are companies that I am tracking and in the case of some I have exposure, in the case of others I pass in and out, but most I track for discovery and I am only prepared to enter when a positive outcome materializes.
The Poll
Thank you to everybody who voted in the poll. The overwhelming winner was “New Investment Ideas” with 73 %. I will continue to deliver these and will have a few pieces that step out of the weeds and get a little more “BIG picture”.
As always the follow ups first
Copper Search- CUS- Drilling Update Douglas Creek IOCG Prospect - Peake Project
This is possibly the most impactful announcement of the week for me. Not because the company announced a discovery (or because I hold stock) but because they announced the extension of one of their key 600 m holes by a further 186 meters and follow up with a second angled hole at the Douglas Creek prospect. The company also stated that they will be sending the full basement intersect (from 132 m) down to Adelaide for cutting and assay with result expected in September.
To understand the significance of this announcement one must be aware of how they report information. For example the prospect drilled first as part of this campaign came up with a false positive of sedimentary iron sulphide and the company disclosed this immediately with no intention of assaying the clearly non-mineralized core.
The last time the company decided to send core down to Adelaide was when they drilled holes 23PK01 and 23PK11. Neither hole hit a deposit but they contained everything to make one think they were dealing with a near miss. The company followed up and hit nothing further nearby, speculating that the mineralization intersected was hosted in leakage structures coming from a IOCG. The slide below outlines the assays from 23PK01, the better of the two holes located about 2 km South of Douglas Creek. This could very well be the same scenario playing out again now.
Drillhole 23PK01 summary slide
My base case is that the hole being currently assayed is in line with 23PK01 and that whatever the company spotted in the core told them that the gravity anomaly is critical. Hence the drilling of the second hole is targeting the core of the gravity anomaly.
New angled hole path with the gravity and magnetic anomaly
Curiously the company released a model of the magnetic and gravity anomalies on twitter where the gravity anomaly inversion shell used a significantly higher density, thus reducing its size. Once again I interpret this as the company seeing something in the core that made them put a much greater emphasis on the gravity rather than the magnetic anomaly.
Twitter GIF of the gravity and magnetic inversions
The market has reacted positively.
Estrella Resources-ESR- New Supergene Manganese Discovery and Exceptional Assays
As speculated in last weeks piece about Greenfields terrains opening to exploration, these guys (ESR) are finding their targeted mineralization (lateritic manganese) sticking up out of the ground in many places. It will be interesting when they start to do the trenching and and collect larger samples systematically. For anyone who has seen weathering in rocks with even a little bit of manganese, the pyrolusite (MnO) can cover the surface and give the appearance of the stuff being everywhere but it can end up being just a surface effect. I don’t know how prevalent that is here but given previous successful attempts during WW2 to mine manganese there may be some good ore around. Lots of black manganese in the the images provided. I suspect the company will find more of this then they will know what to do with.
The company makes clear the analytical challenges they face, they cant just run the stuff over to ALS or Intertek on their way back to the city. They have to have their own sample processing and analysis procedures.
This is one of the “extra” things that have to be done when entering a new terrain. More below.
New interesting targets
Buxton Resources-BUX- Diamond Drilling Commencing at Dogleg Ni-Cu-Co Prospect
The dogleg prospect was discovered in late 2023 as a result of moving loop EM surveys targeting a prospective intrusive of ruins dolerite in the Kimberley that discovered a 280 x 45 meter conductor with a 12,000 S conductance (useful for comparison with last weeks GAL post).
The mineralization has a great Ni and Cu tenor. IGO and BUX are conducting a huge Moving Loop Electro-Magnetic (MLEM) survey over the same rock in the hope of finding more and in higher abundance.
Large planned MLEM survey area
To a lesser extent the chance that there may be something deeper at Dogleg is also of interest. The program of works incudes the drilling of what is known as a platform hole for down hole EM (DHEM). This is when a company drills a hole parallel, rather than across a prospective body in order to then survey it for conductive responses over the greatest possible extent.
Neighbors including SVY may benefit from this spur in activity.
Nickel is out of favor at the moment and I would very much prefer to see orthomagmatic discoveries with high PGE’s as they promise higher near-term returns but given the nickel tenor involved here, a large massive sulphide deposit could likely make money in any market and should it be discovered and developed would likely come online into a recovering Ni price.
Encounter Resources-ENR- Diamond drilling underway at Sandover Copper (NT)
I am somewhat embarrassed that this in my first post on Encounter Resources. This is a company I hold in extremely high regard but also one that has in my option attracted a market cap premium disproportionate to its undisputed high-quality. It is the large Greenfields Tier 1 deposit explorer par-excellence in my opinion.
My greatest interest in the company has not come from their carbonatite and Niobium work. I was a early investor in WA1 (first trade at 22.5 c on the 26/10/22 in fact) and a early seller as it turned out. I have no doubt that ENR will have a Nb deposit of their own, perhaps several given that this part of the West Arunta has a lot of carbonatites and as it is turning out the strongest control on the mineralization is the supergene enrichment which is largely even across the area. So in my mind if you have carbonatites on your ground, you will likely have Nb-rich carbonatites and finally the supergene enrichment will turn this into a deposit for you. I mean the WA1 and ENR ground, everyone else has caught a bid off of the success but the ground has not been proven in my mind.
For those that want to geek out about this check out the first 10-15 minutes of the presentation below.
Dr. Steve Barnes on Timescales and Lenghtscales in magmatic sulphide deposits
The presentation concerns Ni sulphide deposits but this is not important. The key take away is when you have several processes required in the formation of a deposit the one with the shortest timescale will have the greatest impact. In the case of the West Arunta this is the weathering and supergene enrichment as it is in the supergene ores at Mt Weld for example. Therefore, given that the rocks needed to form the deposits are prevalent (carbonatites with Nb) and the main controlling process affected the whole area (weathering) the deposits will be widespread as well. But I digress.
The Encounter targets I found most interesting were the sedimentary copper plays in the NT. Some JV’d out and some in house. The one they are drilling now is Sandover and the work conducted definitely makes for a compelling area play. Oxidized sandstones, reducing shales and structure to funnel the fluids.
All this is very early stage but the deposit model has been demonstrated. Key is zoning in on a orebody. This sort of exploration can as I keep saying “move the dial” even for a company with a 250 million MC. I would like to see ENR spin out their copper assets into a different company the same way they did their Tanami Au projects into Hamlin Gold (HMG). That way investors can tune and supercharge their exposure to discovery. Also, sooner or later a Nb price beta is going to start to affect their share price in my opinion.
I watch with interest.
Green Critical Minerals-GCM- GCM awards drilling contract for Boulia Cu-Au Project
I really though long and hard about if I should include this company or not. I even cut and pasted the images, links and writing out a couple of times. Why? Because the target fascinates me but the company is very different to what I normally consider for my investments. Interested? Read on.
This is one of those scenarios where I complain about how many shares the company has on issue. In this case it is about 1.3 billion with a 3.7 million MC and about 1.2 million in cash. I must say that this is a company that I have not paid attention to previously and my knowledge of their plan to drill in this area came from a reputable colleague sharing their announcement on LinkedIn.
GCM permits next to a large Anglo American ground holding
For anyone who has not had the pleasure of visiting Boulia it is located in Western Queensland’s channel country half-way between Birdsville and Mt. Isa. The thing to take away about this part of the country is that there is no mining that takes place here. It has nevertheless been the target of much recent exploration by the likes of Anglo American and further to the west Rio Tinto, Sandfire and the yet unlisted but very entertaining Plutonic Limited. Going off John Van’s 2018 interview on exploration radio my understanding was that Anglo was looking for another Mt. Isa on this ground and I gather they were unsuccessful thus far. GCM on the other hand are looking for Porphyries.
So why tell you about a this Junior. This: Gold Molybdenum Copper Porphyry Target Defined at Boulia. This announcement is worth a read for anyone who can understand its significance and potential implications. This: Gold Molybdenum Copper Porphyry Target Defined at Boulia. This announcement is worth a read for anyone who can understand its significance and potential implications.
There is a strong anomaly across a number of elements sitting in soils on limestone that contains veining and recognized skarn alteration. The company is speculating that it is a porphyry that has intruded limestone, producing skarns and depositing metal. They make inferences that the rock is a porphyry and speculate as to ages from what I can deduce are relative relationships. This is very early stuff and the spacing on the soil anomalies has not been tightened as much as I would like to define a target. If anything, the drilling that they are undertaking is scout proof of mineral system drilling rather than anything shooting for a ore zone in my interpretation although this may still happen.
Finally, a repeat of the disclaimer, nothing here is financial advice, comes with no warranty and I take no responsibility for anyone’s financial decisions.
Cheers,
CC