Buzz building around imminent drilling campaigns for NT copper monsters
9th September 2021
A bunch of juniors are about to follow-up a test hole drilled by Geoscience Australia which revealed strong potential for IOCG copper-gold deposits near Tennant Creek. Greenvale, Inca and Strategic Energy among those about to try their luck at the big time. And Nexus defies gold gloom with some bumper results.
It goes without saying that there is a strong appetite for copper exploration with some big upside potential now that the price of the red metal has well and truly consolidated around the $US4.20/lb level.
The current price compares with the $US2.50/lb average in the first half of last year when the world was first dealing with the shock of the COVID pandemic, and the $US3.60/lb average for the 2021FY.
The ever-cautious BHP reckons that the copper market could well be challenged in 2022-2024 as a number of in-development projects in Peru, Chile, Africa and Mongolia come into production or complete their expansions.
“Once that phase of the decade is navigated, a structural deficit is expected to open in the mid–to–late 2020s, at which point we again see some sustained upside for prices,” BHP said in its commodities outlook released with its August 20 profit report.
Looking further out, BHP reckons the price-setting marginal tonne will come from either a lower-grade brownfield expansion in a lower-risk jurisdiction, or a higher-grade greenfield project in a higher-risk jurisdiction.
“Neither source of metal is likely to come cheaply,” it said.
It is against that backdrop that investor interest is amped up in the explorers.
If their exploration programs come with some serious upside potential in a frontier exploration area, all the better.
That’s exactly what is happening up in the Northern Territory where the Federally-funded National Drilling Initiative (NDI) returned some exciting results from a stratigraphic program designed to confirm a sand-covered region to the east of Tennant Creek had IOCG copper-gold potential (Olympic Dam, Prominent Hill, Carrapateena and Ernest Henry are IOCG examples).
That the program, conducted by Geoscience Australia and the NT’s Geological Survey, was a success was highlighted by one of the holes (NDIBKO4) actually returning a copper sulphides hit despite the stratigraphic-style of drilling.
It all went to indicate that the East Tennant region, as it is now called, is a new exploration frontier for large-scale copper-gold deposits, either in the IOCG or sedimentary style, the latter with lead/zinc potential (variations can have copper/silver).
The industry is now chasing down that potential. Apart from Newcrest, which has been drilling there on the quiet, a bunch of junior explorers have been getting busy in the hot-spot.
Since the NDI success (assays for NDIBKO4 on an excised patch of ground are yet to have been released), the juniors that were early movers into the region have been busy working up drill targets, with drilling about to start.
There is no guarantee in the exploration game, but standby for some real excitement if one of the juniors hit something of interest.
GREENVALE MINING (GRV):
Greenvale was mentioned here on May 14 on the strength of its Alpha torbanite project in central Queensland.
It was 21.5c at the time and has since moved on to 35c as it advances the torbanite deposit as a high-yielding source of bitumen, light crude oil to make the bitumen sprayable, and spent carbon for the coal filler/activated carbon markets.
A feasibility study into the torbanite development is due for release in the March quarter next year.
Alpha has the makings of a handy $100m-plus gross revenue business. Investors are keen on the story too.
But now they get another ticket to the fair with Greenvale poised to start an exploration program on its East Tennant ground.
First up is the Twin Peaks prospect where two magnetic anomalies, separated by a couple of kilometres and with coincident or partially offset gravity anomalies, will be tested by the drill bit.
Experts in these things reckon the signatures look like Ernest Henry (the Glencore/Evolution copper-gold mine in Queensland which because of its copper credits, produces its gold at a negative cash cost of $A1,300/oz), and are bigger than the small but high-grade copper-gold deposits of the Tennant Creek field.
INCA: (ICG) and STRATEGIC ENERGY (SER):
Inca is another early mover with a couple of tickets to the fair – its hunt for Tier 1 copper/silver deposits in Peru and its East Tennant ground, among other interests.
It last traded at 11c for a market cap of $47 million and it said recently that it was working towards a fourth quarter drilling program at its Frewena project in the NT.
Strategic Energy is preparing to drill its Cottage prospect. The company comes at the potentially high-impact program sporting a modest $12m market cap at 5.4c a share.
NEXUS MINERALS (NXM):
It has been mentioned previously that impressive gold exploration results can fire up a stock regardless of what the gold price is doing.
That is what happened during the week with Nexus (NXM).
While the broader gold equities market was again fretting over the gold price, which remains as good as could be hoped for in Aussie dollars, Nexus took off.
It shares popped 53% higher on Wednesday to 23c.
It gave up some of the gain later in the week but nevertheless remained the talk of Perth on the believe that it has major discovery on its hands next to Northern Star’s multi-million ounce Carosue Dam operation on the Laverton belt.
Some smarties in Perth were early on to this one. They were backing the idea that after some nice work consolidating its ground position in the region, Nexus would have a better than average chance of coming up with something special.
They have been rewarded too. Nexus was a 9c/$22m market cap company back in May. Now it sports a $54m market cap, with this week’s lift coming from the addition of the Templar discovery to its cluster of prospects in the region from which it has already been pulling impressive results.
Results reported from Templar included 10m at 5.54g/t gold and 28m at 3.64g/t. The broad and high-grade results are in the same rocks at the Crusader prospect which has previously delivered impressive results 1.2km to the south, potentially linking the prospects in to one big mineralised system.
Templar and Crusader are part of the broader Wallbrook project area which sits between Northern Star’s Carosue Dam and Porphyry operations.
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