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Bryah Resources Ltd: THE INVESTMENT CASE

Bryah Resources in a sweet spot as it focuses on copper-gold and manganese

Mineral Resources' proposed takeover of Atlas Iron indicates that the market for manganese assets is on the rise.
Picture of high-grade manganese sample
INVESTMENT OVERVIEW: BYH The Big Picture
This sample from the Bryah Basin project assayed 49.5% manganese

Bryah Resources Ltd (ASX:BYH) is a copper-gold and manganese focused explorer with two projects in central Western Australia.

The Bryah Basin project covers about 700 square kilometres and is host to the high-grade copper-gold mines at DeGrussa, discovered by Sandfire Resources NL in 2009.

The high-grade long-life DeGrussa and adjacent Monty mines have a combined resource of 9.5 million tonnes at 3.9% copper, 1.4 g/t gold and 19 g/t silver.

This equates to 372,000 tonnes of contained copper, 439,000 ounces of contained gold and 5.9 million ounces of contained silver.

The Bryah Basin also has several historical and current manganese mines, which fit with the company’s strategy of focusing on copper, gold and manganese.

Focusing on gold and copper at Gabanintha

Bryah’s other asset lies within the Gabanintha project where Australian Vanadium Ltd (ASX:AVL) has the rights to minerals such as vanadium, cobalt, lithium and manganese.

The company’s focus at that project is gold and copper, and the company received some promising assay results in March from drilling at the Tumblegum South prospect.

Bryah's Gabanintha project.

This involved 26 reverse circulation drill holes over a distance of 2,500 metres with samples collected at 1-metre intervals.

These included 2 metres at 18.1 g/t gold and 5 metres at 3.5 g/t gold.

There was also contained copper within the intercepts.

Bonanza grab sample grades

In addition to this, during a recent field trip, technical personnel examined the drill cuttings of several holes.

A sample from an interval at about 48 metres subsequently assayed at 32.18 g/t (1.0 oz/t) gold and 0.44% copper.

Drilling results indicate that the mineralised zones intersected are generally open along strike and/or down dip, and extensional drilling will be undertaken.

Airborne survey highlights respective copper-gold targets

At its flagship Bryah Basin project, Bryah recently completed an airborne electromagnetic (EM) survey over the areas of highest prospectivity.

The survey was undertaken to identify conductors which potentially could be Volcanogenic Massive Sulphide (VMS) Cu-Au deposits.

The company's project is within the prolific Bryah Basin.

Bryah managing director Neil Marston said: “What we are looking for is the next DeGrussa copper-gold deposit.

“There are areas within our Bryah Basin project which have all the right geological indicators.

“The preliminary data we have received from the recent airborne EM survey is very encouraging with several anomalous EM responses being detected.

“In a month’s time we’ll have the final interpretation completed and we should be drilling the best targets not long after that.

“The earlier explorers generally did not drill below 50 metres depth but we will be going much deeper if needed to test the anomalies we have picked up.”

One significant EM response is about 7 kilometres north of the Peak Hill Gold Mine within the prospective Narracoota Formation.

600 metres strike length of potential VMS copper-gold mineralisation

This has been picked up in three adjoining flight lines, indicating an east-west length of at least 600 metres.

It is characterised as a moderate conductive source, which is potentially indicative of volcanic massive sulphide (VMS) copper-gold mineralisation.

This is in an area where there hasn’t been any previous exploration, making it a high priority target for Bryah.

What emerged as a bonus for the company was the identification of high-grade manganese.

High-grade manganese prompts expanded drilling

Bryah took the decision to expand its exploration program to include manganese on its Bryah Basin project after receiving promising assay results from rock chip samples.

The company recently collected five manganese samples from two prospective locations within its project area which were submitted for laboratory analysis.

The best assay result recorded was 49.5% manganese from a rock chip sample collected from a hilltop covered with outcropping manganese.

Exploration manager Rohan Williams on top of the manganese cap.

With a history of manganese production in the Bryah Basin, the company is focusing on targets which may be amenable to small/medium-scale mining.

Bryah is looking to identify opportunities where +30% manganese ore bodies which are at, or close to the surface, can be brought into production with limited capital outlay.

Region has strong history of manganese production

In a sense, the presence of high-grade manganese shouldn’t have come as a surprise as the Bryah Basin is well known for hosting a number of historical manganese mining areas.

Manganese mining activities are known to have occurred during the period from 1948 to 1967 with manganese production grades above 40% reported.

Mineral Resources mined over 400,000 tonnes of manganese

Mineral Resources Limited (ASX:MIN) mined over 400,000 tonnes of manganese from the Horseshoe South Mine between 2008 and 2011, exporting it through Port Hedland.

This mining was completed under an agreement with the tenement holder, privately-owned Peak Hill Manganese Pty Ltd.

Recently, privately-owned Horseshoe Manganese Pty Ltd has commenced manganese mining at the nearby Horseshoe Flats Mine, which is adjacent to one of Bryah’s tenements.

Atlas Iron gets in on the act

The Horseshoe Flats deposit was discovered by shallow drilling completed by Auvex Resources Limited in early 2010.

Under an agreement announced by Atlas Iron Limited (ASX:AGO) in March 2018, Atlas has sought to capitalise on the strength of the current manganese lump market.

Atlas has come to an arrangement under which up to 100,000 tonnes of product will be mined and crushed from Horseshoe Flats and then transported to Port Hedland for export.

Manganese presents low-cost entry for smaller players

Marston sees an excellent opportunity for the company to enter the manganese market.

He said: “Manganese is one bulk commodity where smaller producers can readily enter the market and capitalise on high prices with little capital expenditure outlay.

“Manganese ore prices are very good at the moment with 37% Mn ore exceeding US$250/tonne.

"We see our neighbours at Horseshoe Flats mine using contract mining to exploit a resource which lies just 2-3 metres beneath transported cover.

"We have the same geological setting on our land with high-grade manganese sticking out of the ground so we will be drilling as quickly as possible to prove up a resource which we can similarly exploit.”

Riding the manganese wave

Manganese is fast becoming an important energy metal which, in part, is why prices for manganese ore have risen by over 50% in the last six months.

The commodity, along with cobalt, is one of a group of metals that manufacturers are using in the production of next-generation battery and power storage applications.

Historically, manganese has been used in steel production, where about 90% of all manganese supplies are consumed.

The balance has been traditionally used in fertilisers, water treatment and other markets.

However, the demand for manganese is now increasing as applications, such as electric vehicle batteries draw on global supplies.

Manganese demand has nearly doubled since 2009

Manganese dioxide is used in regular dry cell batteries and the metal is also the main ingredient of lithium-manganese-oxide batteries.

These batteries are noted for their high thermal stability and are safer than some types of lithium-ion batteries.

There are also lithium-nickel-manganese-cobalt-oxide (NMC) batteries using about 19% manganese and 20% cobalt.

These are commonly used in powertrains for vehicles and power tools.

Global demand for manganese has jumped from around 11 million tonnes in 2009 to 18 million in 2016 and it is expected to grow to just under 20 million in 2018.

As at March 31, 2018, Bryah had $3 million in cash and cash equivalents.

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