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Maiden drilling in sight at SVD’s Pascalle Gold Project
Investors are rushing into gold stocks as the precious metal continues to hit new highs. The gold price is now above AU$2,000/oz, for the first time ever, and it seems to have plenty more in the tank with forecasters tipping a rise to US$3,000/oz within a year.
Just like the gold price, Western Australia’s Paterson Province is taking centre stage.
Heavyweights Rio Tinto (ASX: RIO), Newcrest Mining (ASX: NCM), and IGO Ltd (ASX: IGO) each have a slice of prospective ground in this booming WA gold province and cash is pouring into the region.
Outside of the ASX, one of the biggest gold stories out of the Paterson Province is that of London-listed Greatland Gold’s (AIM: GGP) Havieron discovery, which is now being drilled as part of a JV with Newcrest.
With a newly acquired project sitting right between the Havieron discovery and Newcrest’s 32 million ounce Telfer mine, ScandiVanadium (ASX: SVD) is gearing up for its maiden drilling program in the Paterson Province.
The company recently completed the acquisition of Vanatech Pty Ltd along with its two Western Australian exploration targets: the Pascalle Gold Project in the Paterson Province and the Gnama Project in the Fraser Range Nickel Belt. SVD also gained Vanatech founder and geologist Tom Langley in the deal.
While the company name is slightly off target, SVD’s new acquired assets are right in the middle of the action.
Pascalle Gold Project – WA’s Paterson Province
The company’s Pascalle Gold Project is an underexplored gold project in the Paterson Province, wedged neatly between the Havieron discovery and the Telfer Mine.
The Havieron discovery is perhaps the biggest WA gold exploration success story of the last 12 months. The gold deposit is centred on a magnetic anomaly where significant gold and copper mineralisation was revealed under 400 metres of cover.
The discovery was made by London-listed Greatland Gold (AIM: GGP), which has delivered shareholders a >800% gain in the last nine months, for a £530 million (almost A$1 billion) market capitalisation. Given that Newcrest has farmed into the project in a $65 million deal, that valuation is based on Greatland having just a 30% interest in the project.
It’s yet to be seen how big Havieron could ultimately be, but its tipped to be the next feed source for Newcrest’s nearby Telfer plant.
Another regional project approaching production is Rio Tinto’s (ASX: RIO) Winu copper-gold project. Located further to the north of SVD’s Pascalle Project, Rio recently disclosed a resource at Winu.
Providing further encouragement about the potential for the development of multiple ore bodies within the system, Rio has also revealed a new gold discovery, Ngapakarra, located approximately two kilometres from Winu. Here, early stage drilling identified shallow, thick high-grade gold which remains open in all directions and at depth.
But SVD’s Pascalle Project is not simply a nearology play.
Pascalle drilling imminent
The Pascalle project area has a number of key geological similarities with other major discoveries in the region and the processing of geophysical data has identified eight prospective targets for follow up investigation.
The recent discoveries by Rio Tinto at Winu and by Greatland Gold at Havieron have demonstrated the importance of geophysical surveys in aiding discovery of tier one gold copper prospects in the region — SVD is now following the same process.
The company will commence a high-resolution helicopter electro-magnetic and magnetic survey over the Pascalle Gold Project later this month.
The surveying system to be used is the same as was involved in Rio Tinto’s discovery of the Winu copper-gold project, also located in the Paterson province of Western Australia.
This system will be vital in planning the group’s upcoming maiden drilling campaign, which is set to commence by the year’s end.
Based on the early work to date, the project looks highly prospective for Telfer, Havieron and Winu style gold-copper deposits. It has eight untested drill targets and all the right geological conditions to host the region’s next major gold discovery.
Significant exploration expenditure in the region has resulted in enhanced understanding of geological controls on mineralisation over the last four years and encouraged new concepts in exploration.
In the past, exploration was less advanced. Newcrest’s 32Moz Telfer mine was just outcropping followed at depth, while at Pascalle, which was also first identified by Newcrest, next to no drill holes were completed down more than a couple of metres into fresh rock.
Here you can see SVD’s Pascalle target (below, left) and Havieron (below, right) showing ‘Bullseye’ magnetic target with coincident gravity-high highlighted.
The difference in resolution is due to the difference in depth, with Havieron occurring at greater than 450 metres, whereas, at Pascalle, cover is only between 20m and 50m across the vast majority of the licence area (up to 120m maximum).
The Bullseye target at Havieron proved to be a fantastic hit — including 75m @ 4.8g/t gold and 0.6% copper — however, drilling had to extend through 400 metres of cover to get to it.
Not only does Pascalle have only limited cover, it is in the right area geologically, and there are multiple targets to test.
This all comes against a backdrop of gold hitting $2,000/oz, as forecast point to continue run to US$3,000/oz within a year.
Gnama Project – Fraser Range Nickel Belt
Further south in WA’s Fraser Range Nickel Belt is SVD’s Gnama Nickel Project.
Gnama sits ~20km along strike from the Nova-Bollinger Mine, which was discovered by Sirius before being acquired for $1.8 billion by IGO Ltd (ASX: IGO) in May 2015.
Gnama is also not far from Legend Mining’s (ASX: LEG) recent Mawson discovery. The discovery in December 2019, propelled LEG’s share price from 4 cents to 14¢ today, for a $350 million market cap — an impressive valuation for an explorer without a resource.
The 61km2 Gnama project was identified by Sirius Exploration in 2010 when RC holes drilled to test a soil geochemical anomaly intersected a zone of nickel, copper and cobalt enrichment in the oxide zone above mixed mafic and ultramafic rocks.
As Sirius moved on to drilling at the Nova target, the potential at Gnama was never followed up and the tenement was allowed to lapse.
However, the project has huge potential — the oxide cap indicator is similar to exploration indicators at LEG’s Mawson discovery, Creasy Group’s Sliver Knight, and at Nova-Bollinger.
In light of the revised company direction, SVD appointed Mr David Frances as Executive Chairman. Mr Frances led Mawson West (TSX: MWE) from 2006-2012 where he completed the world’s largest base metals capital raise and IPO in 2010.
He also has previous exposure to the Fraser Range as Managing Director of Winward Resources which was acquired by IGO in 2016.
With exposure to two premier Western Australia gold provinces and work set to commence shortly, in combination with the strong gold price, SVD will continue to continue attract investor attention.
Elon Musk is pushing the vehicle manufacture industry to seek out more high purity manganese to power its vehicles.
As the world transitions to electric vehicle (EV) dominance, manganese will play a key role in EV production.
At the Tesla’s Battery Day 2020, held today, Musk said Tesla’s next generation EV batteries will contain 1/3 manganese.
“It’s relatively straight forward to do a cathode that’s 2/3 Nickel 1/3 Manganese, which will allow us to make 50% more cell volume with the same amount of Nickel,” Musk said.
A well located, ASX company could be one of the beneficiaries.
Euro Manganese Inc (ASX: EMN) is sitting on the largest manganese resource in Europe, right in the thick of the action when it comes to battery markets in Europe, where there is no local manganese supply.
EMN has the largest manganese resource in Europe and will recycle waste to produce highly refined manganese metal and salts (no “mining” involved).
Furthermore, it is strategically located in the Czech Republic with 6+ large battery factories located just 200 to 500kms away.
Tesla will need to source its manganese from a local supplier to keep costs manageable.
Telsa’s under construction Gigafactory in Germany will be the most advanced high-volume electric vehicle production plant in the world and the company plans to produce 500,000 electric vehicles at the Grünheide site starting from the European summer of 2021.
Europe is at the heart of the EV revolution and Tesla’s announcement today could prove to have a snowball effect on European manufacturers who are likely to follow in the US company’s footsteps in seeking out a high-grade manganese product and localising cathode production.
Automakers like Volkswagen, General Motors, and Ford are already pouring billions of dollars into EV development and making a huge investment in this space as they fight over the growing consumer market.
According to the European Automobile Manufacturers Association, the share of chargeable cars rose to 7.2% percent in the April-June quarter from 6.8% in the first quarter of 2020.
The changing landscape in Europe, coincides with a scaling down of subsidies in China. Sales of EVs in Europe are projected to exceed one million units in 2020 and to grow rapidly in the years to come.
It comes as the EU prepares to ‘recharge’ its climate action plan and increase its climate targets to achieve a 55% reduction in greenhouse gas emissions by 2030, a move welcomed by clean transport group Transport & Environment (T&E).
EMN well placed
EMN intends to produce battery grade manganese by reprocessing tailings in the Czech Republic.
The following map illustrates the proliferation of battery plants and the extensive network of automotive and battery manufacturers in mainland Europe and the location of EMN’s Chvaletice Manganese Project (CMP) in the Czech Republic – relative to the major European EV and battery manufacturing hub.
The company will be waste recycling from historic mines and delivering high purity manganese to EU battery makers.
EMN plans to re-process Europe’s largest manganese deposit, which is hosted in historic mine tailings in the Czech Republic, in order to produce high-purity manganese products (HPM) in an economically, socially and environmentally-sound manner.
EMN expect to become the only primary producer of high-purity manganese in the EU, where 100% of manganese requirements are currently imported.
Currently, the bulk of the world’s production of manganese ore occurs in South Africa, China, Australia, Brazil, India and Gabon.
Several prospective customers have expressed interest in procuring high-purity manganese products from the project, and in conducting supply-chain qualification of the products of the proposed Chvaletice demonstration plant.
Attracted by the strategic European position of Chvaletice, the incomparable low environmental footprint of the project (no mining or new solid waste generation), and the exceptional purity of the products that Euro Manganese has produced in previous pilot plant trials, five memorandums of understanding have been signed to date with major customers. These are intended to evolve into long-term offtake agreements.
Musk’s announcement today, could be a game changing one for manganese producers including the up and coming EMN.
The richly gold-copper endowed Mid-Cauca porphyry belt in Colombia hosts numerous multi-million-ounce gold discoveries and attracted the world’s three largest gold producers — Newmont Gold Corp., Barrick Gold Corp., and AngloGold Ashanti.
Also drawn to the richly gold-copper endowed region is ASX-listed junior Los Cerros (ASX: LCL) which has a dominant position within the belt’s Andes and Quinchia regions.
Los Cerros has just reported that it had intercepted thick gold mineralisation from surface at the Tesorito target at its Quinchia Project.
The stock closed up a handy 127% yesterday after the announcement was released to the ASX.
That move lifted the company’s market capitalisation to $60 million — still only a fraction of its neighbouring mining majors.
Drill hole TS-DH08, the first hole of the company’s current expanded drilling program at Tesorito, returned an exceptionally wide gold intercept and hinted that there is further potential at depth.
These first assay results confirmed the encouraging results of previous drill holes TS-DH02 and TS-DH07 that are located either side of the recently completed hole. This has further demonstrated both the deeper gold-copper porphyry and the near surface high grade epithermal gold potential.
Gold mineralisation exceeding 1g/t Au has now been demonstrated by three separate diamond holes to exceed 230m downhole thickness, over an area of 300m x 250m, and remaining open in all directions
The raw data from these latest holes is extremely impressive with TS-DH08 returning 230 metres at 1.0 g/t gold, including some prominent intersections of 18 metres at 2.0 g/t gold from surface and 116 metres at 1.4 g/t gold from 114 metres to 230 metres.
Importantly, these results build on 384 metres at just over 1 g/t gold from 16 metres and 253 metres at a similar grade from 2.9 metres.
In the heart of the multi Moz Mid-Cauca Gold Belt
Los Cerros’ Quinchia Project hosts the Miraflores Gold Deposit with a Resource of 877,000 gold ounces at 2.8 g/t gold and Reserve of 457,000 ounces at 3.3 g/t gold.
Within three kilometres of Miraflores is the Tesorito near surface porphyry where the company is currently drilling.
Also in close proximity, is the Chuscal target where a maiden drilling program was completed in January 2020 and drilling is set to recommence in October 2020.
The multi-million ounce Mid-Cauca Gold Belt is home to large producing mines, recent high profile discoveries and the subject of extensive investment by mining majors, including AngloGold Ashanti, a shareholder in Los Cerros.
AngloGold is the third largest gold mining company in the world based on production.
This is an outstanding endorsement of the company’s prospects given Anglo’s comprehensive understanding of the region.
AngloGold’s 30 million ounce Nuevo Chaquiro project (also known as Quebradona) lies 50 kilometres north of Los Cerros’ territory.
The gold component of the AngloGold’s reserve at the Nuevo Chaquiro copper-gold project was based on a gold grade of 0.71 g/t, highlighting the potential commercial viability of the grades being delineated by Los Cerros.
Even at 0.71 g/t gold, the contained gold in Nuevo Chaquiro is 2.5 million ounces, highlighting the benefits of developing the large-scale projects that are characteristic of the region.
At Los Cerros’ Tesorito, there is already emerging evidence of scale and continuity of both near surface epithermal and deeper high grade porphyry style mineralisation.
Down hole thicknesses exceeding 230 metres of gold mineralisation of 1 g/t or above, essentially from surface, have now been identified in three drill holes over an area of 300 metres x 250 metres. This mineralisation remains open to the north-northeast and east direction as well as showing additional promise to host copper with gold in depth extensions.
Current hole TS-DH09 is exploring an untested northern anomaly, currently at a depth of 329 metres, the outcome of which is much anticipated.
Los Cerros’ Senior Geologists, both of whom have worked at the multi-million ounce Nuevo Chaquiro deposit, 51 kilometres to our north, and La Colosa deposit, 104 kilometres south-east, have noted textural and mineralogical similarities to that deposit, especially its porphyry core which also carries banded veins, UST textures and primary bornite.
Commenting on these promising results, Los Cerros’ managing director Jason Stirbinskis said, “This is a highly encouraging start to the drill campaign as not only has it provided a sense of near-surface porphyry mineralised volume given similar results of nearby holes, it has hinted that there is further potential at depth.
‘’Primary bornite is a copper rich mineral species, its presence, based on visual logs, correlates to elevated copper in assays and has raised the possibility of more copper occurrences as we chase depth extensions in subsequent drilling.
‘’In this regard it is interesting to note that TS-DH02 recorded an intersection near end of hole, of 35 metres grading 0.2% copper from 365 metres downhole including 0.7 metres at 2.6% copper from 391 metres downhole depth, some 90 metres vertically below the TS-DH08 hole depth.
‘’The 18 metre intersection grading 2.0 g/t gold from surface including 6 metres at 4.1g/t gold also provides encouragement to further pursue the east-west trending epithermal veins for high grade gold resources to supplement existing resources and reserves at the nearby Miraflores deposit.
Stribinskis has referred to the possibility of adding high-grade gold resources to supplement the existing resource at Miraflores.
This could become an integral part of the company’s strategy, particularly with the gold price hovering in the vicinity of US$2,000 per ounce.
Other options were pursued ahead of Miraflores when the gold price was approximately US$1,300 per ounce, but another $700 per ounce could make the mine highly economical, even more so if the resource was expanded and complemented by the addition of higher grade ore.
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