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Marvel Gold has highly encouraging metallurgical results from Tabakorole: Bridge Street Capital Partners

Published: 15:16 02 Feb 2021 AEDT

Marvel Gold Ltd - Marvel Gold has highly encouraging metallurgical results from Tabakorole: Bridge Street Capital Partners
The company has had an impressive start to life with assets obtained at bargain basement prices.

Marvel Gold Ltd’s (ASX:MVL) recent bottle roll test work on fresh ore composite samples, undertaken by ALS Metallurgy, highlighted straightforward, non-refractory metallurgical characteristics for the Tabakorole Gold Project ore.

Importantly, average gold recoveries range from 92.7% to 96.6% for grind sizes (P80) of 150 to 75 microns, with attractive leach kinetics, indicating a likely processing route incorporating a simple, industry standard cyanide leach circuit.

The following is a research update on Marvel Gold from Bridge Street Capital Partners:

Tabakorole metallurgy

Following on from MVL’s 910koz resource disclosure in October, the company has released initial metallurgical results from its flagship project, Tabakorole. While we thought that the risk of the deposit being refractory was low, it was always a possibility. And with the bulk of the deposit (ca.90%) in fresh rock, met. testing is very important.

So, we were greatly encouraged by the results just released by MVL. Bottle roll tests have been conducted on 4 representative composites at a variety of grind sizes, from 150 down to 75 microns. As shown in the following table (which are averages of the 4 composites), recoveries are consistently above 90% and range as high as 97%. Leach kinetic test work delivered rapid gold dissolution rates. These are impressive results. It seems to us that there will be few metallurgical issues at Tabakorole.

Also important are low reagent consumption numbers with cyanide use in the range 0.22 to 0.42kg/t and lime in the range 0.26 to 0.54kg/t. This, together with the potential for quite a coarse grind size, will assist in keeping costs low.

The resource expansion drill programme is scheduled to be complete by the end of January, with assays available for the new resource perhaps a month later. So, we can imagine a new resource sometime in Q2.

What could Tabakorole be? As a relatively low grade orebody, this deposit is all about strike length. It seems likely that the deposit might extend to the SE by a few hundred metres. The area of key interest is the NW extension, which has been identified by a 500-600m strong magnetic anomaly and a pronounced air core anomaly (with the best hit of 6m at 6.2gpt). Simply ratio-ing up the current resource (at 0.6gpt COG) by say 800m implies an unconstrained deposit size of perhaps 1.2Moz or more. We think this is entirely achievable and could pave the way for a scoping study for a stand-alone 90-100kozpa open cut/CIL operation. Given the ‘friendly’ met response in initial test work, it’s possible that the deposit is amenable to heap leach extraction. Early days for this project.

As discussed in the recent quarterly multi-element geochem and high resolution magnetic surveys are underway over the entire 300 square kilometre Tabakorole tenement, with data expected by the end of March. Previous work had already defined gold anomalism several kilometers to the south. The T1 target, near to the southern boundary, has several encouraging RC results obtained by previous explorers. These include 5m at 2.3gpt, 14m at 9.8gpt and 4m at 3gpt, and have never been followed up. As well, MVL is in the process of consolidating exploration ground around Tabakorole, and has recently completed a ‘win-win’ deal with Oklo on neighbouring tenements.

MVL has now earned 51% equity in Tabakorole (from Altus) and will now move to Stage 3 of the earn in (US$3m to go to 70%, and a DFS to go to 80%).

Lakanfla

Results from Lakanfla drilling (located on the Senegal Mali Shear Zone) were disappointing. We had always regarded this as a high risk exploration target, but one which was always worth drilling. The project had all the right indicators for success, with promising soil geochem, a very encouraging gravity profile (which suggested similar subsurface karst topography to the nearby Yatela deposit), and extensive artisanal mining.

Drilling was problematic, with high water inflows the major problem. Gold mineralisation was obtained in the recent programme, but the zones were highly variable in thickness (3 to 22m) and low grade (0.1 to 0.4gpt).

MVL has also completed a soils programme over the entire tenement with peak values quite encouraging at 39gpt and 4.2gpt. So, further drilling may be warranted.

Historic exploration has delivered what will probably become a modest resource within the adjoining granite. Further drilling will be completed here to allow a resource to be defined. There is an ore-starved mill several km’s to the north of Lakanfla which could represent a market for this ore. Again, early days.

Investment view

MVL has had an impressive start to life with assets obtained at bargain basement prices. That MVL’s geologists have been able to convert a modest 1gpt orebody into what seems likely to emerge as a +1moz/1.2gpt deposit bodes well for the future of the project. Tabakorole should be suitable for processing using conventional CIL technology, with high met recoveries and low reagent use potentially contributing to low milling costs.

The company is well funded (cash around $5m) which should be sufficient to take Tabakarole through to a resource upgrade.

With an EV of under $18m, MVL looks very under-priced against its peers. Yes, results from Lakanfla were disappointing, but our view is that Tabakorole is the main game here. Yesterday’s share price performance was odd, given the very encouraging met results.

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