AGGRESSIVE drilling at Adelaide Resources’ key projects has confirmed that the South Australian company is on track to become one of the country’s leading gold, copper and uranium explorers.
The ASX-listed company currently holds 20 copper, gold and uranium exploration licences throughout South Australia, the Northern Territory and Queensland that cover about 7300 square kilometres, and drilling has already confi rmed the potential for many of these tenements to host deposits. With $5.107 million in cash as at December 31, Adelaide Resources is set for an exciting year: one that will determine prospective production sites and place the company at the forefront of mineral exploration.
One of Adelaide Resources’ most advanced exploration ventures is its wholly-owned Rover copper-gold project, which covers 287sqkm within the heavily-mineralised Tennant Creek region. Rover lies 85km southwest of the town site and looks set to mirror the success of previous Tennant Creek mines, which have produced 5.5 million ounces of gold and 487,000t of copper to date. Drilling of magnetic targets at Rover by original owner Peko Mines between 1971 and 1982 intersected several magnetic ironstone bodies carrying gold-copper mineralisation. Access restrictions in place from 1982 prevented any further work until 2005, when Adelaide Resources acquired the project from gold producer Newmont Mining and first began exploration through new ground magnetic survey grids. Newmont, which acquired Normandy Mining in 2002, obtained its Rover tenement interests from Peko in 1991. Adelaide Resources is currently awaiting final assay results from its 2011 drilling program, however, results already released have confirmed there is still outstanding discovery potential.
“Rover is an area that is probably a continuation of the Tennant Creek field,” Adelaide Resources managing director Chris Drown said.
“It looks like the high-grade copper and gold characteristics which marked the historic Tennant Creek prospects are being repeated in the Rover field.
“We anticipate there will be deposits at Rover similar to those that were very profitably mined at Tennant Creek.” In 2011, a total of 26 diamond drill holes were completed at four prospects: Rover 1, Rover 4, Rover 12 and Rover 11 East.
The Rover 1 deposit lies across the southern boundary of Adelaide Resources’ tenement and a tenement owned by Westgold Resources. Drilling of the part of the deposit that falls in Adelaide Resources’ tenement confirmed the presence of a
significant body of prospective magnetite and hematite ironstone, and attractive intervals of often high-grade copper and lesser gold mineralisation. Some of the encouraging intersections achieved at Rover 1 included 55m grading 3.36 per cent copper, 15m grading 5.72 grams per tonne of gold and 1.73 per cent copper, and 26m grading 3.87 per cent copper.
The company has also discovered two main zones of copper and gold mineralisation at the wholly-owned Rover 4 prospect in 2011, with intersections including 15m grading 2.07 per cent copper, 2m grading 20g/t of gold, and 21m grading 0.94g/t of gold and 2.33 per cent copper. The magnetic anomaly associated with the Rover 12 deposit in the western part of the tenement is comparable in size to the anomaly at Rover 1, indicating that it may also be a large ironstone system. Five holes (two parent and three daughter) were drilled last year on two sections at Rover 12, with ironstone, copper sulphides and altered sediments intersected on both. Promising results from this earlier stage prospect include 4m grading 1.22 per cent copper and 5.57g/t of gold, and 2m grading 5.08 per cent copper from one of the daughter holes. Drilling at the Rover 11 East prospect intersected 30m-long intervals of jasperhematite- carbonate: a dense rock type likely to be the source of the gravity anomaly targeted by the drilling. Minor sulphides are present in the Rover 11 East drill core, and sampling and assaying are now in progress. Adelaide Resources’ goal remains the discovery of a copper-gold mineralisation with characteristics that will warrant stand-alone development. Following the receipt of all outstanding assays, the tonnage and grade of defined mineralisation at Rover 1 and Rover 4 will be assessed,
while areas where further drilling has the potential to build the resource base will also be identified.
Mr Drown said the next step of exploration at Rover involved assessing how much metal Adelaide Resources had on its side of the Rover 1 tenement. “Some of the intersections we’ve achieved are up with anything that the nation has delivered in recent times,” he said. “We firmly believe that we are dealing with Tennant Creek look-alike geology and grade type parameters, which gives us confidence that there is something exciting waiting to be found. “If we can find a deposit with characteristics similar to one of the great past Tennant Creek deposits, it will transform Adelaide Resources from a fairly small, junior explorer to a company with more value for shareholders.”
The Moonta copper-gold project lies on South Australia’s Yorke Peninsula, within a key exploration region at the southern end of the world-class Olympic Copper-Gold Province. Active drilling on the Moonta tenement has revealed a range of copper-gold deposits, and two drilling rigs are still currently operating there.
The 819sqkm tenement centres on the historic ‘Copper Triangle’ mining district of Moonta-Wallaroo, which has produced an estimated 355,000t of copper and about 3.5t of gold from ores averaging 3 to 4 per cent copper and less than 1g/t of gold.
Adelaide Resources acquired its initial foothold in the Moonta district in late 1993, before extending its holdings in 2003. The company currently has 100 per cent holdings covering the Moonta tenement, except for the Moonta Porphyry Joint Venture area, for which Adelaide Resources holds a 90 per cent stake and Breakaway Resources owns the remaining 10 per cent. Between 2003 and 2006, Adelaide Resources and the Phelps Dodge/Red Metal alliance spent more than $3 million testing several promising copper-gold targets through a joint venture agreement. At the Wombat prospect, grades of higher than 1 per cent copper were returned from a shear zone with a strike of about 400m, and a deep follow-up hole intersected 36m grading 1.14 per cent copper and 0.29g/t of gold from 239m downhole.
Adelaide Resources believes the Moonta region still remains highly prospective for the discovery of new gold and copper deposits. Significant air core drilling completed in early 2011 at the Willamulka prospect confirmed the presence of shallow low to moderate grade copper-gold mineralisation, which remains open at depth. A follow-up 7000m air core drilling program began early this year to complete further testing at Willamulka, and to explore a number of other earlier stage copper and gold geochemical targets. A diamond drill rig commenced work soon after the air core rig, testing for the continuation of known bodies of copper-gold mineralisation that remained open at depth or along strike at
the Willamulka and Wombat prospects. “The immediate Moonta district has pedigree in terms of its past production, and more recent science has suggested it is part of the same belt that contains the world-class Olympic Dam and Prominent Hill deposits,” Mr Drown said.
Exploration is also progressing at the Corrobinnie Uranium Joint Venture with Quasar Resources, on South Australia’s Eyre Peninsula. Last year, a 162-hole air core drilling program was completed to explore for palaeochannel-hosted uranium deposits. Portable XRF scanning of drill samples taken from a number of gamma anomalies defined by downhole logging confirmed the presence of uranium. These drill samples are now being assayed and the 2012 exploration
program will be designed once these results have been received.
“The Corrobinnie Uranium Joint Venture is progressing technically in the right direction,” Mr Drown said. “It probably hasn’t had much profi le but it is a good third string project to be involved in.”
While 2012 is set to be an important year for exploration, Mr Drown said Adelaide Resources was in no hurry to acquire more tenements.
“We are quite asset-rich in terms of holding a really strong portfolio of exploration properties right now,” he said. “Copper-gold exploration at Rover and Moonta, and uranium exploration at the Corrobinnie Joint Venture, are likely to
remain our focus at the moment. “While we are always on the lookout for other prospects, we believe we have a stand-out exploration portfolio at the moment.”
Mr Drown said that while there were no immediate plans for capital raising, it was an inevitable event.
“Like any junior explorer, capital raising is required from time to time,” he said. “At the end of the day, drilling is what is going to change the destiny of the company and we direct a great deal of money towards that exercise.
“Our ultimate goal remains to deliver value to our shareholders by fi nding mineral deposits, at any one of our projects, which would be economic to develop into mines. “Significant exploration success should deliver a first step of positive investment re-rating, with later production delivering a second wave of reward to our shareholders.”
By Helena Bogle