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Recent announcements regarding the South Australian mineral and energy resources sectors

This update covers the February 2018 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.

The Government is currently in Caretaker mode because of the General Election being held on 17 March 2018. Further Ministerial releases will be provided when the government is sworn in after the election.

Previous news items:

Company news

Alliance Resources

Reverse circulation drilling has commenced at Alliance Resources’ Weednanna gold prospect to test the limits of the new Target 4 gold zone (ASX release 21 February 2018). Ten holes have been completed to date for 1,434 m (ASX release 28 February 2018).

Drilling of new gold area Target 5 will follow, before returning to regional targets to test the remainder of the shallow moving-loop electromagnetic anomalies for base metals.

Weednanna is part of the Wilcherry project, a joint venture between Alliance Resources (67.35%) and Tyranna Resources Ltd (32.65%).

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Archer Exploration

Latest metallurgical test work conducted on drill samples from Archer Exploration’s mid-2017 drilling program at the Ketchowla cobalt manganese project has returned outstanding results. Recoveries of greater than 90% for cobalt, copper, manganese and nickel include:

  • Up to 98.66% Co
  • Up to 99.39% Mn
  • Up to 91.27% Cu.

Archer sees these positive metallurgical results and those of its earlier drilling (ASX release 24 July 2017) as confirmation of the potential for Ketchowla to host a significant cobalt and manganese deposit (ASX release 12 February 2018).

At the Blue Hills project, an aerial electromagnetic survey has been completed with preliminary data highlighting a number of basement conductors prospective for intrusion-related sedimentary-hosted copper–gold mineralisation (ASX release 15 February 2018). Archer has applied for an exploration licence over newly identified large conductive targets Legolas and Ygritte. Processing of the data for target generation has commenced with results expected by the end of the month.

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Argonaut Resources – Aeris Resources

Torrens joint venture partners Argonaut Resources (30%) and Aeris Resources (70%) have received final government approval to undertake a major exploration drilling program of up to 70 diamond drillholes over the large Torrens anomaly (ASX release 19 February 2018). The coincident magnetic and gravity anomaly is located in the Torrens Hinge zone, a continent-scale zone of crustal weakness that appears to have been a conduit for mineralising fluids from the earth’s mantle. Drilling by Western Mining in the late 1970s and by the Torrens Joint Venture in 2007 and 2008 confirmed the existence of a major iron oxide–copper–gold mineralising system beneath several hundred metres of sedimentary cover.

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The $350 million smelter upgrade at BHP’s Olympic Dam copper–gold–uranium mine was completed in late 2017, with the first anode cast from the flash furnace in late December (ASX release 18 January 2018). Operations will continue to ramp-up to full capacity in the March 2018 quarter, with production guidance unchanged at 150 kilotonnes (kt) for the 2018 financial year. Production is expected to increase to approximately 215 kt in the 2019 financial year, underpinned by improved operating performance and higher ore grades from the Southern Mine Area.

Major upgrade works on the refinery, concentrator, other key infrastructure and site technology were also undertaken during the smelter upgrade period (BHP media release 9 February 2018).

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Havilah Resources

Havilah Resources and Cobalt Blue Holdings have signed a memorandum of understanding for the joint investigation of the applicability of Cobalt Blue’s proprietary process for the recovery of cobalt from pyrite ores (ASX release 1 February 2018). Cobalt Blue will complete its due diligence on the Mutooroo copper–cobalt deposit and provide the results to Havilah by 30 April 2018. The agreement is non-binding and may be terminated by either party at any time, except in the period after test work has commenced and prior to delivery of test results.

The agreement is consistent with Havilah’s Copper Growth Strategy as the Mutooroo copper–cobalt project is one of the three copper projects advancing towards investment decisions.

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Investigator Resources

Investigator Resources announced that drilling would commence on 14 February 2018 at the Trojan copper–gold target near the Paris silver project (ASX release 13 February 2018). The Trojan target is interpreted as the centre of the Nankivel porphyry system, which Investigator drill tested in 2016 and 2017 assisted by the PACE collaborative drilling program.

An ASX release on 26 February 2018 reported that three drillholes been completed and that pyritic metasediments with visible copper sulfide had been intersected which may be a pyritic halo to a porphyry system. Assay results are expected shortly.

Investigator is seeking a joint venture partner to fund further exploration on its Nankivel project.

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OZ Minerals

OZ Minerals 2017 Annual and Sustainability Report was released to the ASX on 22 February 2018. Highlights include:

  • Achieving copper guidance for third consecutive year (112,008 tonnes (t) produced) and exceeding the gold guidance (126,713 ounces (oz) of gold).
  • Steady progress on transitioning to an underground only mining operation with open pit closure bought forward to the first quarter of 2018.
  • Achieving the milestone of mining 1 million tonnes (Mt) of ore from the open pit since it began its life in 2009.
  • Further extending Prominent Hill’s mine life to 2029, following an 18% increase in underground ore reserve to 39 Mt.
  • Board approval to develop the $916 million Carrapateena copper–gold mine, one of Australia’s largest new mining developments. Carrapateena’s ore reserve tonnage estimate is 79 Mt with a copper equivalent grade of 2.31%.
  • Phase one construction at Carrapateena being well underway with phase two scheduled to start in the second quarter of 2018. $117 million was spent in 2017 with around $500 million to be spent at Carrapateena in 2018.
  • Signing of the Carrapateena Native Title Mining Agreement with the Kokatha Aboriginal Corporation, which was reached in just 12 months.

Exploration and growth were a key focus in 2017. OZ intends to be a three-mine producer within five years, with the West Musgrave project with Cassini Resources likely to be the third mine. The company’s pipeline of potential growth opportunities advanced and expanded in 2017 with the new Red Metal agreement for Punt Hill near Carrapateena taking the number of South Australian joint ventures to three (Coompana with Mithril Resources; Mount Woods with Minotaur Exploration). OZ exited its other South Australian joint venture at Intercept Hill with Red Tiger during the year.

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Renascor Resources

Further laboratory test work at Renascor Resources’ Siviour graphite project has produced 99.99% carbon spherical graphite from concentrates, which meets or exceeds industry specifications across all parameters tested (ASX release 15 February 2018). The results reaffirm the suitability of Siviour concentrates to be processed into high-value uncoated spherical graphite for sale into the market for lithium-ion battery anodes.

Also, recent metallurgical tests have confirmed the suitability of concentrates from Siviour for expandable graphite (ASX release 21 February 2018). The results will be included in the prefeasibility study currently underway.

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Rex Minerals

Rex Minerals achieved a milestone with submission to the South Australian Government of the Program for Environment Protection and Rehabilitation (PEPR) for its wholly owned Hillside copper–gold project on the Yorke Peninsula (ASX release 5 February 2018). Rex aims to commence construction at Hillside within 12 months of formal government approval of the PEPR, subject to financing and Rex Board approval.

The company’s Hillside Mine Social Management Plan, which provides the foundation for ongoing community engagement, was approved by the South Australian Government in September 2017.

Next steps for Rex include updating the Hillside Extended Feasibility Study and financing the initial project.

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Terramin Australia – Environmental Copper Recovery – Thor Mining

A maiden in situ recovery resource estimate for the Kapunda copper project of 47.4 Mt grading 0.25% Cu for 119,000 t of contained copper has been announced by Terramin Australia (ASX release 12 February 2018). The estimate was completed by Terramin’s wholly owned subsidiary, Terramin Exploration, and joint venture partner, Environmental Copper Recovery. This is the first estimate since 1992, and comprises the shallow mineralised halo around the historic South Australian workings.

Thor Mining is earning up to 60% interest in Environmental Copper Recovery, which is earning up to 75% from Terramin. Thor will have an effective 45% interest in Kapunda at the end of its farm in.

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Tyranna Resources

In an ASX release on 5 February 2018 Tyranna Resources provided an update on its total gold portfolio and investments.

Tyranna reaffirmed Wilcherry gold project drilling and metallurgical test work results released to the ASX by joint venture partner Alliance Resources (17 January 2018 and 19 January 2018). A new high-grade gold zone within the project complex returned 35 m at 3.65 g/t Au from 43 m, including 6 m at 13.63 g/t Au from 59 m.

Tyranna also reported that diamond drilling had commenced in November at the Greenewood gold prospect on the Jumbuck joint venture gold project (Tyranna 75%, WPG Resources 25%) to follow up on the success of the previous reverse circulation program that confirmed a high-grade structure.

With several prospective sites available for the Jumbuck gold project, Tyranna has targeted a 500,000 oz of gold resource, building on the current 219,000 oz Au inferred resource (announced in an ASX release on 17 October 2016).

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WPG Resources

Recent infill grade-control drilling in the Perseverance pit at WPG Resources’ Tarcoola gold mine has returned spectacular results (ASX release 7 February 2018). This horizon will be mined from February through to June, forming the basis for sustained increases in both tonnages and grade of Tarcoola ore being processed over the coming months. Some of the best true width intercepts include:

  • 11 m at 73.31 g/t Au, including 1 m at 607.75 g/t Au, from 17 m (TGC0922)
  • 19 m at 26.74 g/t Au from 4 m (TGC0906)
  • 13 m at 21.94 g/t Au from 6 m (MET003)
  • 5 m at 53.59 g/t Au from 18 m (TGC0899)
  • 12 m at 17.58 g/t Au from 0 m (TGC0905).

Drilling is ongoing and to date assays have been received for 112 drillholes, totalling 3,030 m with 18% showing intercepts of >20 g/t. The intercepts confirm scheduled increases in grade and ounce profiles for the close of financial year 2018. Grade-control modelling will be finalised by early March.

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