Recent announcements from the South Australian mineral and energy resources sectors
This update covers the January 2019 period and is compiled from information publicly released by companies.
Readers should refer to the latest information available on company websites, particularly in regard to making any forward investment decisions.
Previous news items:
- Alliance Resources
- Aeris Resources – Argonaut Resources
- Archer Exploration
- Havilah Resources
- Hillgrove Resources
- Iluka Resources
- Iron Road
- Leigh Creek Energy
- OZ Minerals
- Tasman Resources
- Terramin Australia
- Tyranna Resources
Reanalysis of historical iron ore drill sample pulps has identified a new gold target at Alliance Resources’ Weednanna North prospect, 1,300 m north of the Weednanna gold deposit (ASX release 25 January 2019). A total of 158 composite and split samples returned gold results greater than 0.1 grams per tonne (g/t) Au, including 11 cores with greater than 2.0 g/t-m (grade x thickness) Au intercepts. Best results include:
- 17 m at 0.15 g/t Au from 60 m (08WNRC003)
- 12 m at 0.27 g/t Au from 54 m, including 1 m at 1.37 g/t Au from 58 m (08WNRC005)
- 8 m at 1.06 g/t Au from 58 m, including 2 m at 2.81 g/t Au from 58 m (10WNRC005)
- 2 m at 1.67 g/t Au from 68 m (10WNRC007)
- 14 m at 0.50 g/t Au from 78 m, including 2 m at 1.02 g/t Au from 78 m (10WNRC009)
- 2 m at 1.20 g/t Au from 102 m (10WNRC014)
- 22 m at 0.34 g/t Au from 42 m, including 2 m at 1.12 g/t Au from 42 m (10WNRC027).
Weednanna North geology is very similar to that of the Weednanna deposit and it also appears to have similar structural positions to those that host Weednanna’s gold. The prospect is considered a priority gold exploration target warranting further drill testing.
Latest drilling results from Weednanna East have been released (ASX release 29 January 2019). The 85 aircore drillhole program was designed as a first pass test to extend known gold in regolith anomalism at Weednanna East. Four holes returned greater than 100 parts per billion gold with the best result 2 m at 1.31 g/t Au from 49 m in 18WDAC078.
Alliance and subsidiary Alliance Craton Explorer have entered into an agreement with Tyranna Resources and subsidiary Trafford Resources (ASX release 31 January 2019). Alliance and its subsidiary will acquire Trafford’s remaining interest (approximately 18.59%) in the Wilcherry project and an 80-person camp on leasehold land at Kimba for a total consideration of $1.5 million cash.
Aeris Resources – Argonaut Resources
By mid January 2019 a heli-portable drilling rig had been mobilised and a 27-person exploration camp completed at Aeris Resources’ and Argonaut Resources’ Torrens project site (Argonaut ASX release 14 January 2019).
The start of drilling on 21 January marked the recommencement of on‐ground exploration within the project area after an 11-year hiatus (Argonaut ASX release 22 January 2019, Aeris ASX release 22 January 2019). The first drillhole, TD7, is targeting a coincident magnetic and gravity anomaly defined from the FALCON geophysical survey flown early in 2018.
Archer Exploration’s latest drilling program at the Blue Hills copper project aims to test large areas of coincident copper–gold mineralisation at the Hood, Katniss and Hawkeye prospects. Results from three reverse circulation drillholes completed at the Hood prospect indicate alteration consistent with that associated with intrusive style copper–gold deposits (ASX release 25 January 2019). Assay results are expected in the next month. Drilling at Katniss and Hawkeye is expected to commence in February 2019.
The presence of albitite in float in the Hood area and in situ between Hawkeye and Katniss further supports Archer’s proposed intrusive model for a large-scale mineralising system at Blue Hills.
Havilah Resources has announced final assay results from the recent Grants iron ore basin drilling program undertaken and funded by SIMEC Mining (ASX release 21 January 2019). Results show an average 18% increase on previous Niton X-ray fluorescence (XRF) iron analyses, with grades of around 24–27%.
Best results include:
- 96 m at 27.55% Fe from 220 m (GBRC001)
- 296 m at 24.37% Fe from 20 m (GBRC004)
- 194 m at 24.18% Fe from 110 m (GBRC005)
- 252 m at 25.45% Fe from 32 m (GBRC007).
Diamond drilling is underway to provide early sample material for preliminary metallurgical test work.
Drillhole GBDD014, completed on 29 January to a depth of 624.4 m, provides the first interpreted full thickness intersection of the Grants Basin iron-bearing sequence (ASX release 29 January 2019). A total of 486 m at 24.6% Fe (from 127–613 m) was intersected based on systematic handheld Niton XRF analyses.
Completion of remediation work on the section of wall where a rock fall occurred in December 2018 at the Kanmantoo Mine and the lifting of access restrictions to the area by the Mines Inspector has enabled mining to recommence (Hillgrove Resources ASX release 17 January 2019). Pit design has been modified to reduce the likelihood of similar occurrences in future. The proposed design has been independently reviewed and is likely to reduce future copper production by approximately 2,000 recovered metal tonnes, i.e. approximately 10% of remaining production at the commencement of 2019. Work has commenced to evaluate alternative underground mining methods to recover the copper ore loss.
Despite the rock fall, Hillgrove reported a strong December quarter with copper production of 5,366 tonnes (t), contributing to the highest annual production since operations began of 22,584 t for calendar year 2018 (ASX release 30 January 2019). Gold production for the quarter was 885 ounces (oz) (6,003 oz for 2018) and the low strip ratio of 1.4:1 continued the build-up of ore stockpiles to 2.9 million tonnes, equivalent to 10 months of processing.
Latest drilling results have been released from Hillgrove’s Kanappa area (ASX release 30 January 2019). The best copper intersection was in KPDD003 where a chlorite, sericite, K-feldspar, magnetite, pyrrhotite vein and alteration zone extends from 12.55 m downhole to end of hole at 208.7 m and opens to east, within which is:
- 45 m at 0.2% Cu, from 47 m downhole, including 5.5 m at 0.47% Cu from 69.5 m downhole and 4.5 m at 0.65% Cu from 85.0 m downhole.
Despite the low-grade copper intersections the geology of these drillholes confirms Hillgrove’s view that the Kanappa area is prospective for large-scale magmatic related copper–gold mineral deposits. Further work is in progress to confirm these observations and their implication for the next drilling program.
Iluka Resources’ full-year zircon production rose from 312,000 t in 2017 to 349,000 t in 2018 with the boost coming from higher ore grades and improved recoveries at Jacinth-Ambrosia and the additional release of zircon in concentrate (ASX release 25 January 2019).
Jacinth-Ambrosia operated at full capacity over 2018. In the December 2018 quarter mining was completed at the southern end of the Jacinth deposit and the mining unit moved to Jacinth North where it will remain before moving to Ambrosia in the second half of 2019.
Following an extensive review of the Central Eyre Iron Project, Iron Road is developing a new mine plan that will maximise capital efficiency and reduce total capital mine costs by greater than 50% to US$645million (ASX release 29 January 2019). Key to the new plan is reducing the former ambitious mine production target from 24 million tonnes per annum (Mtpa) to 12 Mtpa at 66.7% Fe over the initial 22-year ore production mine life and cutting substantially both pre-strip volumes and life-of-mine strip ratio.
The primary aims of significantly reducing total mine capital requirements and reducing reliance on electrical power have been satisfied, without forgoing competitive mining costs, iron concentrate quality or project optionality. This outcome has been achieved without compromising future mine expansion options and leverages efficiencies available through the application of a hybrid conventional truck and excavator method, accompanied by conveyor mining systems.
Leigh Creek Energy
Leigh Creek Energy provided an update on its pre-commercial demonstration plant reporting that it has achieved 13 days of continuous production of commercial quality syngas and 89 days of continuous production (ASX release 8 January 2019). The syngas is now producing up to 20% methane. The company sees the achievement as confirmation that in situ gasification syngas has potential as low-cost feedstock for high-value ammonia and urea products.
In an ASX release on 21 January 2019 the pre-commercial demonstration plant was reported to be rapidly maturing towards commercial flow rates. As at 20 January the flow rates were consistently in excess of 1,000 standard cubic metres/hr (Sm3) which equates to 8,760,000 Sm3/yr and syngas composition was consistently recorded up to 20% methane and 5–10% hydrogen.
One-metre assay results have been released from Marmota’s September 2018 drilling program at Aurora Tank Goshawk area (ASX release 17 January 2019). Best gold results include:
- 5 m at 24.3 g/t Au from 38–43 m, including 2 m at 53.5 g/t Au from 38–40 m and 1 m at 88.8 g/t Au from 38–39 m (18ATRC104)
- 3 m at 10.4 g/t Au from 58–61 m, including 1 m at 26.4 g/t Au (18ATRC120)
- 1 m at 3.8 g/t Au from 87–88 m (18ATRC111).
These are a follow up of 4 m composite results reported to the ASX on 14 November 2018.
The new high-grade intersection in 18ATRC104 is open in a number of directions and accompanied by elevated arsenic, which is considered to be a pathfinder for primary gold. The new intersections have further increased the lateral footprint of gold mineralisation that is close to the surface and potentially amenable to low-cost open-pittable mining.
Further biogeochemical sampling has seen new (tree leaf) samples collected extensional to the Goshawk area. Results will be used to guide Marmota’s next drilling program.
Prominent Hill produced 26,599 t of copper and 37,719 oz of gold during quarter four 2018, resulting in full year copper production of 110,111 t and gold production of 130,856 oz (OZ Minerals ASX release 24 January 2019). Both the copper and gold annual production were above the 2018 guidance, the fourth year in a row for copper. 2019 gold production guidance has been raised to 115,000–125,000 oz (from 100,000–110,000 oz) due to an increase in gold feed grade.
Underground operations delivered 765,000 t at 1.98% Cu. Haulage volumes were in line with the prior quarter and are expected to increase through 2019 as underground development continues to open additional stoping fronts. Diamond drill platform development for the expansion study is ahead of schedule with drilling expected to commence in quarter one. The haulage feasibility study continued and is on track for completion in quarter three and the Malu paste plant commissioning scheduled for end of 2019.
At Carrapateena, underground development remains on schedule for first concentrate production in the fourth quarter of 2019. Bulk earthworks for the minerals processing plant and non-processing infrastructure are now complete as is the offsite infrastructure works including the high-voltage powerline and Mount Gunson ElectraNet Substation. Construction of the southern access road upgrade and tailings storage facility has commenced.
Carrapateena Expansion works continued during the quarter with results of the scoping study expected to be released late in the first quarter of 2019, as will results of the Carrapateena Extension resource definition drilling program.
OZ will also commence a regional exploration program designed to test several coincident gravity and magnetic targets on the Carrapateena leases in the first quarter. All targets selected for testing in this phase occur on an interpreted structural corridor extending between Carrapateena and BHP’s Oak Dam prospect.
OZ and Red Metal have announced a second collaborative agreement (ASX release 30 January 2019). The new Greenfields Discovery Alliance provides OZ with a two-year option to fund a series of mutually agreed, proof-of-concept work programs on six of Red Metal’s early-stage projects in Western Australia (Yarrie, Nullarbor) and Queensland (Gulf, Three Ways, Lawn Hill, Mount Skipper). OZ has committed to expend a minimum amount on each project within the two-year period; total commitment is $8.05 million.
In December 2017, the companies entered into a joint venture to progress exploration of Red Metal’s Punt Hill and Pernatty Lagoon copper–gold projects, 30 km south of Carrapateena.
Detailed geophysical modelling results have been released from a recent gravity survey at Tasman Resources’ Pernatty project in the Gawler Craton (ASX release 7 January 2019). The area is approximately 20 km south-southeast of the Carrapateena iron oxide – copper–gold (IOCG) deposit. A number of potential IOCG target areas have been defined at relatively shallow depths. Bodies of interest lie between 200 to 400 m in target area A, and between 350 to 550 m in target area B.
Terramin Australia has acquired the historical Kitticoola copper–gold mine from Kitticooler Holdings (ASX release 9 January 2019). The mine operated intermittently between 1846 and 1971 producing 7,000 t of ore at an estimated average grade of 2.25% Cu. The gold potential was not realised until 1890 and the mine intermittently produced 30,000 t of ore at an average recovered grade of 5.4 g/t Au at that time.
Mineralisation in the mine area is comprised of nine lodes, with only three (Baker, Mastermann and Anstey) having been opened to any extent. The lodes occupy two sets of tensional fractures within the Palmer Fault. Lodes occur within the Palmer Granite as narrow veins ranging from 1 to 15 m in width and 30 to 200 m in length. Previous evaluation of remnant mineralisation in the oxide and sulfides zones returned average grades of 5.24 g/t Au and 0.55% Cu and 14.52 g/t Au and 4.45% Cu respectively.
Kitticoola, which remains an approved private mine, is located 2.5 km south of Palmer and approximately 62 km by road from Terramin’s Angas processing facility at Strathalbyn. The purchase provides Terramin with the opportunity to add potential production from Kitticoola to its Bird-in-Hand project in the Adelaide Hills.
Tyranna Resources and subsidiary Trafford Resources have entered into an agreement with Alliance and subsidiary Alliance Craton Explorer (ASX release 31 January 2019). The agreement is for the sale of Trafford’s remaining interest (approximately 18.59%) in the Wilcherry project and an 80-person camp on leasehold land at Kimba for a total consideration of $1.5 million cash. The sale is expected to allow Tyranna to focus on its wholly owned gold project at the Eureka gold mine in the Kalgoorlie region of Western Australia and the Jumbuck gold project in South Australia