Exco Resources (ASX: EXS) is extremely well funded after the recent sale of the Cloncurry Copper Project in north-west Queensland to Xstrata for $175 million.
Post the sale of the project, Exco’s focus will be to add further value to the company's assets, with the board having already approved an initial exploration program of up to $10 million for the company's remaining tenements in the Cloncurry, Hazel Creek, and Soldiers Cap project areas.
Exco Resources intersects 1.69% copper at Cloncurry, generates new targets
Exco's increasing exploration at its North Queensland tenements is bearing fruit, with new iron oxide copper gold targets defined at the Mt Isa Inlier that bear similarities to Xstrata's Ernest Henry mine.
Exco Resources (ASX: EXS) is set to expand exploration activities at the Northwest Queensland package, with a data acquisition phase advancing.
New managing director Geoff Laing told Proactive Investors that Exco’s focus is on exploration in Queensland, to maintain the company’s self-sustaining position and replace cash flow from the White Dam gold project.
“For me the focus is very much on exploration in Queensland,” he said.
“We’ll certainly be looking to replace the cash flows that White Dam has brought in for the last 18 months by potentially acquiring a reasonably advanced project that we could start generating cash flow from in the not too distant future.”
In the Eastern Succession of the Mt Isa Inlier, Exco is targeting iron-oxide-copper-gold (IOCG) mineralisation.
This mineralisation bears similarities to Xstrata’s Ernest Henry underground mine, also in North Queensland, and is typified by the coincidence of strongly anomalous magnetic and gravity highs.
Exco has identified three new high priority targets at the Salebury South, Elder Creek and Canteen, which it intends to drill test in 2012.
Weatherley Creek drilling
At the Weatherly Creek project, initial drilling at a number of prospects has produced positive first phase results.
Drilling at the Canteen prospect intersected copper and gold below a small historical open pit, with results including 12 metres at 1.34% copper and 0.56 grams per tonne (g/t) gold from 18 metres depth.
Three holes were drilled at the Victory Prospect where previous drilling defined an inferred resource of 196,000 tonnes at 1.2% copper and 1.4g/t gold.
The latest round of drilling intersected relatively low grade mineralisation beneath the existing drilling, and indicated an increase in gold towards the south of the prospect.
One drill hole intersected 18 metres at 0.28% copper and 1.12g/t gold from 36 metres depth.
At the Bosca and Bosca South prospects, three drill holes tested for oxide copper mineralisation below small historical open pits.
One drill hole at Bosca intersected 24 metres at 0.62% copper while at Bosca South, an intercept of 0.33g/t gold and 8 metres at 1.69% copper and 0.09g/t gold was returned.
Finally, one drill hole of a proposed four hole program was drilled at the Rock Rat prospect to test a line of historical workings and shafts.
The rest of the drilling program was postponed due to the threat of wet weather, and will be continued after the wet season.
The first hole intersected 24 metres at 0.21% copper and 0.51g/t gold from surface.
Other operations
In other company news, work at the Pumpkin Gully syncline has yielded positive results, with drilling at the Salebury, Crow’s Nest and Tanbah North areas returning:
- 14 metres at 1% copper and 0.28g/t gold from 70 metres;
- 32 metres at 0.56% copper and 1.04g/t gold from 74 metres; and
- 10 metres at 1.51% copper and 1.34g/t gold from 98 metres.
Meanwhile resource drilling at the Kangaroo Rat copper gold deposit has been completed, with results returned to date in line with expectations.
Diamond drilling is planned for the project for metallurgical testwork, geotechnical studies and specific gravity determinations.
Well Funded
At the end of the December quarter, Exco Resources had $58.6 million cash in the bank, equivalent to about $0.164 per share.
The company recently paid $135 million, or $0.38 per share, back to shareholders, following the sale of its Cloncurry project to Xstrata for $175 million.
