(Source: Exploration Insights)
If you’re into investing in the mining sector, you should know the above chart very well. This series covers the three projects with the most significant drill interceptions over the past week, as well as the prospects of the companies which own these projects. I will use data from the weekly bulletin of opaxe, which can be found on its website. Note that the drill interceptions are converted into grades of gold equivalents using the following formula:
Opaxe has chosen gold as the metal equivalent for all conversions, as it considers gold to be the most widely used and best understood benchmark to determine or appreciate the grade tenor of a drilling intercept.
1) Larocque East uranium project Lake in Canada
On April 15, IsoEnergy (OTCQX:ISENF) released the last batch of results from the 8,500m 2020 winter drilling program at the Hurricane zone at its Larocque East project. The best interception was 7.5m @ 22.7% U3O8 and 0.4% Ni from 318.5m in hole LE20-52, which is equal to 2,013(AuEq.)m. This hole aimed to evaluate the potential for additional high-grade mineralization to the south of holes LE20-40 and LE20-34.
Larocque East is located in the eastern part of the Athabasca Basin in Saskatchewan, some 35km northwest of the McClean Lake uranium mine and mill:
In 2018, IsoEnergy acquired the project from Cameco (NYSE:CCJ). IsoEnergy’s strategy includes acquiring a significant amount of land in the basin and drilling around mineralized intercepts that were found but never adequately followed up after 2011.
I think that the sandstone cover on the property is relatively thin, as it ranges between 140m and 330m. The dimensions of the Hurricane zone at the moment are 575m along-strike, 40m wide and up to 11m thick. The zone is relatively shallow, some 330m below surface.
2) Menzies gold project in Australia
On April 14, Kingwest Resources released the results from its reverse circulation pre-collar and shallow target drilling campaign at its Menzies project and the best interception was 3m @ 158.4m Au from 180m. This is equal to 475(AuEq.)m and is the best drill result since the company acquired the project in September 2019.
(Source: Kingwest Resources)
Menzies is situated in the Eastern Gold Fields region of Western Australia, and it consists of five historical underground mines, the last of which ceased production in 1943. There was also some open-pit mining during the 1990s.
(Source: Kingwest Resources)
Historic production stands at around 800,000 ounces of gold with some 650,000 ounces from underground deposits and 150,000 ounces from open cuts.
Exploration is limited as only 21 holes to 200m were drilled before Kingwest bought the project. Menzies is located close to roads as well as mills, with the closest one located some 80km away.
The strategy of Kingwest is to drill known and new high-grade targets and increase resources with the aim of setting a base for high-margin underground mining.
At the moment, Menzies holds just over 170,000 ounces of gold across all deposits.
3) Julimar polymetallic project in Australia
On April 15, Chalice Gold Mines (OTCQB:CGMLF) announced the results from six drill holes from its Julimar project. Hole JRC006 intersected a new, shallow, high-grade Pd-Ni-Cu zone, but the best interception was in hole JRC001, which returned 33m @ 6.5g/t Pd, 0.7g/t Pt, 1.6% Ni, 0.7% Cu and 0.1% Co from 44m. JRC006 and JRC001 were drilled around 60m apart.
(Source: Chalice Gold)
Julimar is located in Western Australia, around 70km from the City of Perth, and Chalice has interpreted a mineral complex about 26km long and 7km wide.
The property has access to major highway, rail, power and port infrastructure and has never been explored for nickel, copper, or PGEs.
Julimar is one of the most significant projects under cover that are being explored by Australian mining companies.
I think that the recent discoveries can be compared to the legendary Nova nickel discovery of Sirius Resources in 2012. Just like Nova, Julimar is located in a previously overlooked mineral province, in an area which has never before been drilled for nickel.
IsoEnergy released more high-grade drill results from the Hurricane zone, and I think there’s good exploration potential as most of the cross-sections are yet to be closed off. I think IsoEnergy is among the few promising juniors in the uranium space. The company has C$3.7 million of cash on hand and should be funded for 2020.
Menzies is a small high-grade gold project, which is located near several mills. If Kingwest goes for toll milling, initial capex should be modest, and I think the exploration potential here is good as Menzies has seen very little drilling over the past two decades. However, if you want to get exposure to the company, you’ll have to go to the ASX as this one is not listed in the USA.
The latest drill holes from Chalice’s Julimar project have intersected wide, shallow zones of high-grade nickel-copper-palladium mineralization. The company looks undervalued, and I think the latter has an interesting strategy of making opportunistic acquisitions and then returning money to shareholders after sales. Chalice has not raised capital since 2011 and has so far generated more than A$100 million ($61 million) from asset sales.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: I am not a financial adviser. All articles are my opinion – they are not suggestions to buy or sell any securities. Perform your own due diligence and consult a financial professional before trading.
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