Argonaut Resources NL (ASX:ARE) is tracking towards a January 2019 start to drilling of the Torrens joint venture copper project in South Australia near the projects of Oz Minerals Limited (ASX:OZL) and BHP Billiton Limited (ASX:BHP).
The company is expecting to see equipment mobilised from this week at its JV project, 75 kilometres from BHP’s Olympic Dam mine and 50 kilometres from OZL’s Carrapateena deposit.
Argonaut’s flagship project extends over three exploration licences, with ownership of the primary licence residing in the company’s joint venture with Aeris Resources Ltd (ASX:AIS).
Aeris holds 70% of the JV while Argonaut has a 30% interest.
Argonaut was project operator of the JV until September 2018, handing over the management reins to Aeris in the same month it green-lighted stage I of a drilling program at Torrens Copper Project.
The ASX-listed company tipped its drill team would drill 8-10 holes in depths between 700 and 1,500 metres at priority drill targets.
Innovative drill method
The partners’ first-stage fully-funded drilling effort is expected to start in mid-January 2019 and use a heli-portable diamond drill rig to minimise disturbance on the Torrens salt lake.
Drilling at Torrens could eventually take in up to 70 deep diamond drill holes covering an area of 120 square kilometres.
The drill program comes after 28 large-volume iron-ore copper gold (IOCG) drilling targets were identified from airborne gravity and magnetic survey data in the 2017-18 financial year.
Argonaut’s chief executive officer, geologist Lindsay Owler, said the planned drilling program targeted areas that had been geophysically modelled as having the physical properties of large IOCG deposits.
Argonaut and Aeris' project hosts a very large, Olympic Dam-style iron-oxide, copper, gold (IOCG) target with the Torrens coincident magnetic and gravity anomaly having a footprint larger than Olympic Dam.
Torrens anomaly is located over Torrens Hinge Zone, a continent-scale zone of crustal weakness which Argonaut’s CEO Owler said “appears to have been a conduit for mineralising fluids from the Earth’s mantle.”
Owler wrote in October 2018, “More drilling is required to intercept the modelled copper-gold mineralisation.
“In the event of a discovery, Torrens has the potential to host a world-class copper-gold deposit.”
Owler has highlighted drilling of the Torrens anomaly by Western Mining Corporation in the late 1970s and by Torrens Joint Venture in 2007 and 2008 confirmed a major IOCG mineralising system beneath several hundred metres of sedimentary cover.
A successor of Western Mining, WMC Resources, was rolled into BHP in 2005.
In November 2018, BHP identified a potential new IOCG system in the Olympic province, at similar depths to be targeted by Torrens project drilling.
If Aeris and Argonaut make a discovery at Torrens, there is scope for a very large tonnage deposit and successive discoveries.
The partners are also exploring IOCG systems in the highly prospective Gawler Craton (Stuart Shelf) region of South Australia.
The Torrens project is near the eastern margin of Stuart Shelf.
Resolution of regulatory and legislative access issues
In the March 2018 quarter, the company was granted an approval under section 23 of the Aboriginal Heritage Act 1988 by South Australia’s Minister for Aboriginal Affairs and Reconciliation.
Argonaut CEO Owler spoke to Proactive Investors’ Stocktube video channel at the time, saying “The shackles are off Torrens”.
INSERT VIDEO https://www.youtube.com/embed/yiJJ40o_op8
Sophisticated and professional investors welcomed the development, subscribing to $5.5 million of new Argonaut shares in the June 2018 quarter.
Owler said in April 2018: “The company has tenaciously pursued exploration access to the Torrens project for a long time and we now have both access approvals and funding in place.”
The tin rattle was designed to back the company’s exploration programs.
In April 2016, the Federal Court refused three applicants requests for native title over Lake Torrens, with the primary decision upheld by the Full Federal Court in March 2017.
The applicants’ April 2018 motion seeking special leave to appeal was then declined by the High Court of Australia in a judgement in October 2018, drawing a line under legislative uncertainty for the company.
The ruling paved the way for the company to now go ahead with the fully-funded stage I drilling program at Torrens project.
Argonaut has a number of other projects in its pipeline besides its flagship project Torrens in South Australia, including the Nyungu cobalt-copper deposit in Zambia.
Drilling has defined more than 12,000 tonnes of contained cobalt and management at Nyungu, highlighting the potential for a two-stage, low-cost, short-lead-time copper-cobalt mine.
A high-grade interception extended for 23 metres at the project, grading 0.21% cobalt.
Besides Australia and Zambia, the company’s copper and zinc project interests also extend to Queensland.
Its lithium projects are found in Ontario, Canada and South Australia.