ASX explorers well placed to join feast

Nearology is a term used in the resource space when an explorer holds ground near a huge, company-making mineral discovery.

In this piece, we’ll be looking at three well-known deposits in Australia – Sandfire Resources’ (ASX:SFR) DeGrussa copper deposit, Core Lithium’s (ASX:CXO) Finniss mine and Hasting Technology Metals’ (ASX:HAS) Yangibana REE project – and which companies have staked ground nearby in the hopes they’ll find something equally juicy.

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First, let’s talk copper. 

S&P Global forecast demand for copper could double from 25Mt to 50Mt by 2035, but Goldman Sachs say regulatory approvals for new copper mines have hit new lows, while BHP’s chief commercial officer Vandita Pant recently told the FT Commodities Global Summit that as much as $US250 billion in mine investments would be needed by 2030.

Whether or not that investment occurs boils down to prices being high enough.

At $US9002.50/t yesterday, prices are already at levels considered strong by historical standards – and for explorers with their ducks in a row, that’s a swell spot to be in.

The DeGrussa copper discovery

Around 14 years ago Sandfire Resources (ASX:SFR) made the massive DeGrussa copper discovery in WA.

The company was famously looking for a tiny gold resource to help keep the lights on in the wake of the GFC, only to stumble on an RC hit of 22m grading 3.6 per cent copper, 3.8g/t gold, and 13.4g/t silver 100m below the ground, when young geo Margaret Hawke decided to drill six extra holes at the tailend of an unsuccessful drill drive.

A later diamond drill hole struck an unimaginable 27 per cent copper over 8m.

DeGrussa turned the company from a penny stock into an ASX copper mid-tier, and while that mine is winding up this year, it hasn’t stopped juniors looking for a similar volcanogenic massive sulphide (VMS) systems in the Bryah Basin region.

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Who has tenements nearby?

HORSESHOE METALS (ASX:HOR)

Horseshoe Lights copper-gold project is around 50km west of DeGrussa, and includes the historic open pit of the opper-gold mine by the same name which operated up until 1994, producing more than 300,000 ounces of gold and 54,000 tonnes of contained copper, including more than 110,000 tonnes of direct shipping ore (DSO) which graded between 20-30 per cent copper.

The deposit contains a current in-situ resource of 128kt Cu metal @ 1 per cent (0.5 per cent cut-off) and 36,000oz Au.

The company’s latest round of drilling has demonstrated the potential to grow the existing resource base with multiple zones of thick, shallow copper mineralisation confirmed outside the existing resource envelope. 

Director Kate Stoney says it’s important to note the potential at depth, with the multiple wide zones of sulphide copper mineralisation at Motters intersected around 200m below surface.

“We know that regionally these copper deposits can exist down to 1000m, so we have effectively only tested around a third of the potential depth extent at Motters,” she said in HOR’s March quarterly report. 

“Testing this potential will be a key focus moving forward.”

AURIS MINERALS (ASX:AUR)

Auris is another explorer with a handful of copper-gold projects in the area, including the Morck Well project which used to be a joint venture with Sandfire (it bailed late last year) which sits just 22km from the DeGrussa Plant.

Auris now has a controlling stake of 80 per cent in the project with CuFe (ASX:CUF) holding 20 per cent interest (free carried until a Decision to Mine).

In October last year MD Mike Hendricks said initial observations highlighted previously uncharted DeGrussa formation sediments.

“These sediments are along strike of previous copper hits including one hole with 11m at 3.5 per cent copper,” he said.

“Morck Well is continuing to shape as an exciting copper-gold opportunity for the JV with follow-up work planned and diamond drilling assays expected to be received this quarter.”

The company also just kicked off air core drilling at the project last week, testing high-priority gold targets.

BRYAH RESOURCES (ASX:BYH)

BYH is also on the hunt for a potential new VMS ‘Horseshoe Lights type’ mine analogue at the Windalah prospect, about 13km from DeGrussa.

The company believes that following structural, geological, geochemical and hyperspectral vectors will lead to the discovery of Cu sulphides at greater depth than current drilling. 

Best results from diamond drilling last year include 2m at 3.88g/t Au from 437m (BBRD072) and 1m at 0.35 per cent Cu from 429m (BBRD072).

The plan is to target copper-gold VMS mineralisation at 300m and 500m depth, with downhole electromagnetic surveys to test for off-hole conductors anticipated to commence in H2 2023.

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The Northern Territory Finniss mine

There’s a lot of lithium clickbait out there (not in Stockhead, of course) but the general gist is that prices have bottomed, plummeting way less than analysts predicted, and are now rising again.

Not to mention, there’s been a some big name mergers and acquisitions, or attempts at such. Liontown Resources (ASX:LTR) has rejected a $5.5 billion bid from American lithium chemical giant Albemarle, Mineral Resources (ASX:MIN) spoiled a $136 million bid for Essential Metals (ASX:ESS) by IGO (ASX:IGO) and its Chinese partner Tianqi.

Then there’s Allkem’s (ASX:AKE) $16 billion merger with Livent.

And when there are fewer players controlling the product, you’re more likely to get higher prices.

Not a bad environment for a junior to be in, especially if they’ve got a stake in the Northern Territory near Core Lithium (ASX:CXO), which got its Finnis mine into production earlier this year.

Finniss is targeting an average 160ktpa of battery-grade lithium spodumene concentrate for at least 12 years, and Core has secured offtake for 80 per cent of production for the first four years with lithium majors Ganfeng and Yahua.

This month the company announced an investment decision on its high grade BP33 underground mine would be made by the end of the first quarter of 2024. 

In April, the company increased its mineral resource estimate by 62 per cent at the Finniss project to 30.6Mt at 1.31 per cent Li2O following the culmination of the 39,600m RC and diamond drilling program undertaken last year at both known deposits and at new prospects within the Bynoe Pegmatite Field.

These stocks are right on the boundary

CHARGER METALS (ASX:CHR)

Charger Metals is basically surrounded by Core’s tenements, with its Enterprise prospect located along strike from CXO’s Blackbeard Prospect, which includes notable drill intersections: 

• 41m at 1.63 per cent Li2O from 137m (SRC117)
• 59m at 1.54 per cent Li2O from 158m (SRC118)
• 71m at 1.05 per cent Li2O from 101m (SRC119)

The company kicked off first-pass RC drilling this month, and plans to complete approximately 2000m to test three priority target areas believed to have high prospectivity for “significant pegmatite-hosted lithium mineralisation”, including Enterprise, Old Bucks and Megabucks.

LITHIUM PLUS MINERALS (ASX:LPM)

Another explorer sharing a border with Core is LPM, with its Bynoe project consisting of 11 granted tenements covering 297sq km.

In May, the company raised $4.5 million to accelerate exploration at Bynoe – ahead of a maiden JORC resource estimate expected in Q4 CY23. 

And the company is already seeing success at the Lei prospect, reporting this week that the initial diamond hole had intersected a 43m pegmatite interval downhole from 443m to 486m, which “provides strong indication of the extension of the Lei pegmatite system at depth beneath the 2022 intersection, which included 21.2m at 1.74 per cent Li2O from 398.8m (BYLDD004).”

“This rapid success at the start of our 2023 program gives us confidence that we may be on the cusp of a highly significant lithium discovery at the Bynoe project,” executive chairman Dr Bin Guo said.

EVERGREEN LITHIUM (ASX:EG1)

Then there’s fresh listee EverGreen, whose project – also called Bynoe – is contiguous to Core’s mine.

In March, chief technical adviser Jason Ward told Stockhead the project’s promise was more than just about being next door to a big deposit.

“The initial geochemistry found really big lithium anomalies and they appear to be right next to Core Lithium’s anomalies and contiguous with them,” he said.

“It’s not simply a nearology play, they’re contiguous geochemical samples to their mine.”

To date the company has completed an ambient noise topography (ANT) survey and commenced field mapping and stage 2 soil, rock chip and termite mound sampling at the project.

The plan is to kick off drilling at the project ASAP.

 

Hastings eyes REE production in WA

Rare Earth Elements (REEs) are a group of 17 metallic elements including praseodymium, terbium, yttrium, and neodymium, used in the production of many modern technologies such as wind turbines and electric vehicle motors.

Although prices for rare earths (NdPr oxide) have nosedived since late year after breaking records at the start of 2022, in the long-term experts believe the sector will remain buoyant as Europe and the US continue to pour money into the clean energy transition.

In fact, demand for REEs is tipped to surge three to seven times above current levels by 2040, and the pressure is on for Western economies to shore up supply and develop processing capabilities.

And WA’s Gascoyne region is the place to be, home to big guns like Hasting Technology Metals (ASX:HAS), on the cusp of becoming Australia’s next REE producer with its Yangibana project.

This month the company entered into a binding terms sheet with GR Engineering Services (ASX:GNG) for delivery of the Yangibana beneficiation plant and associated infrastructure.

The plant will have a feed capacity of one million tonnesa year and a rare earth concentrate output capacity of 35,000 tonnes per annum.

“The appointment of GR Engineering, one of Australia’s leading process engineering companies, for the construction of the Yangibana plant marks an important milestone on Hastings’ path to first rare earth concentrate production by late 2024,” executive chairman Charles Lew said. 

Who’s got a project in the region?

DREADNOUGHT RESOURCES (ASX:DRE)

Dreadnought is another big name in the Gascoyne, with its Yin discovery at its Mangaroon project, comprising of 43kms of REE mineralised ironstones which includes 3km containing a JORC mineral resource of 14.36Mt at 1.13 per cent TREO, and 40km containing a JORC exploration target of 50-100Mt at 0.9-1.3 per cent TREO.

DRE says the mineralisation at Yin contains “significantly higher” NdPr as a fraction of the rare earth oxides (NdPr:TREO ratio) than most other REE deposits globally, over 50 per cent higher than the global average. 

First pass, 400m x 40m wide spaced drilling along 16km of the Yin exploration target will be completed this month, before infill resource drilling starts. 

The company is also awaiting results from a metallurgical study on 16 diamond holes drilled at Yin underway sometime this month. 

LANTHANEIN RESOURCES (ASX:LNR)

This mining minnow is a mere 2km from Hasting’s Yangibana and only 15km from Dreadnought’s fence line.

Like Yangibana and Yin, the source of rare earths at LNR’s Lyon and Edmund project areas are from Gifford Creek ferrocarbonatities, which have been intruded along the Bald Hill lineament.

New ironstone trends, which may host REE mineralisation, have recently been discovered at Lyons in the most western area of the project, with rock samples sent to ALS Laboratories for priority analysis.

“The latest ironstone Y42 Splay target follows a 1800m strike extent of anomalous magnetic and spectral satellite anomaly just 3km south of the proposed Hastings mine,” technical director Brian Thomas said earlier this month.

Currently a +10,000m RC drilling program testing numerous magnetic ironstone targets, as well as the deep 450m diamond drilling which is testing margins of large tonnage Carbonatite targets, is under way at the project. 

KINGFISHER MINING (ASX:KFM)

Kingfisher reckons it has a ‘belt-scale’ rare earths play on its hands after drilling in early February confirmed the discovery of continuous, high-grade rare earths at the MW2 target at its Mick Well project in the Gascoyne.

Notable results included 5m grading 2.63 per cent total rare earth oxides (TREO) and 0.54 per cent neodymium and praseodymium – both valuable magnet REEs – from a down-hole depth of 124m (MWRC067) and 4m at 3.24 per cent TREO and 0.54 per cent Nd2O3 + Pr6O11 from 46m (MWRC035).

There is growing evidence to suggest the company’s 54km Chalba corridor is the next significant REE target in the area, with intersections comparable to those from the Bald Hill deposit which is part of Hastings’ Yangibana project.

The company is planning to conduct RC drilling at MW2 in July.

This content first appeared on stockhead.com.au

At Stockhead we tell it like it is. While Horseshoe Metals, Charger Metals, Hastings Technology Metals and Lanthanein Resources are Stockhead advertisers, they did not sponsor this article.

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