Breakaway Resources discovers high grade copper including 1m at 6.23% at Eloise

Breakaway managing director David Hutton told Proactive Investors today that the company has identified a potential economic resource in the world-class Cloncurry Mineral District, with high grade copper intercepts and close proximity to existing mine and transport infrastructure.

Breakaway Resources (ASX: BRW) has returned further high grade intercepts at the Sandy Creek Copper Gold Project, in the heart of the world-class Cloncurry Mineral District in Northwest Queensland.

Results from the final 12 holes of a recent 16-hole reverse circulation drilling program confirm the internal continuity of the shear-hosted mineralisation and indicate potential for extensions along strike and down-dip.

The company has identified high grade mineralisation over 600 metres strike length at Sandy Creek, with results including:

- 1 metre at 6.23% copper, 0.52 grams per tonne (g/t) gold and 23g/t silver from 65 metres;
- 2 metres at 4.64% copper, 0.69g/t gold and 46.3g/t silver from 44 metres; and
- 2 metres at 2.08% copper, 5.23g/t gold and 8.3g/t silver from 37 metres.

These high grade results were also supported by broader intercepts, including 45 metres at 0.66% copper, 0.14g/t gold and 2.7g/t silver from 36 metres.

Some drill holes displayed multiple copper-gold intercepts, which could indicate the presence of numerous parallel zones of mineralisation, further reinforcing the size potential of the prospect.

Sandy Creek is part of the Eloise Exploration Project, which lies 20 kilometres west of FMR Investments’ Eloise Copper Mine and about 100 kilometres south of Xstrata Copper’s Ernest Henry mine.

Managing director David Hutton told Proactive Investors today that the proximity to these projects could be positive for Sandy Creek, with potential to utilise the existing infrastructure.

“We’re right up hard against existing infrastructure, so obviously it works in our favour regarding the potential economics of anything we might find,” Hutton said.

“Like any mine site, Eloise has mining and milling infrastructure, it has accommodation, it has power, and so potentially we could transport the ore to that mine, that milling facility.”

Although FMR Investments is Breakaway’s second largest investor, Hutton said no agreement to join forces had been discussed, however, he did not rule anything out.

“There are no immediate plans to enter into a partnership, I think FMR are certainly aware of what we’re doing, and in our most recent capital raising of early last week they actively participated in that.

“I think we’re very much on their radar, they’re watching what’s going on, and I think they’re seeking to strengthen that relationship because it will just give people options down the track.”

Breakaway has commenced drilling four diamond holes at Sandy Creek to test the down dip potential of the prospect.

Assays from these holes are expected by mid to late December 2011. Hutton told Proactive Investors the diamond drill holes would enable Breakaway to build a three dimensional geological model for Sandy Creek that would underpin a Resource.

Potential northern strike extension

In addition to the reverse circulation drilling program, Breakaway has undertaken surface mapping and rock chip sampling that has identified semi-continuous subcrops of secondary copper mineralisation to the north of Sandy Creek.

The surface mineralisation, which stretches over 125 kilometres strike length, has not yet been drill tested.

Significantly, the surface mineralisation lies directly along strike from the northernmost drill hole at Sandy Creek, and could potentially be a northern strike extension to the existing mineralisation.

Results from the surface sampling are expected in late November 2011.

Placement boosts cash reserves to $3.3M

Breakaway recently completed a share placement to raise $1.1 million, increasing cash reserves to $3.3 million, to support exploration at Eloise, and specifically Sandy Creek.

The placement, to clients of lead manager Patersons Securities, comprised 22.7 million shares at $0.049, and included Breakaway’s second largest shareholder, FMR Investments.

Forward focus reinforced

David Hutton told Proactive Investors this latest round of good news has reinforced Breakaway’s decision to focus on the Eloise Exploration Project.

“Previously we had focused a little on the exploration perhaps, but also heavily on a suite of nickel assets in Western Australia, so we made a strategic decision in the first half of 2011 to change the focus of the company.

“The fact that we’re getting some early runs and some quite quick runs on the board here just reinforces the merits of that decision that was made.”