Emmerson stonker gives investors plenty to stick in their breccia pipe
And the imminent release of a government-funded ‘discovery’ hole is expected to put the spotlight on fellow Tennant Creek explorers Inca and Greenvale. Plus, RareX eyes publication of an exploration target as a trigger for a share price re-rating.
Emmerson has been faithful to the high-grade gold-copper potential of the Tennant Creek (TC) mineral field in the NT ever since it listed in December 2007.
So it was great to see that coming up to 14th anniversary on the lists, it has returned its best ever drill result at its Hermitage project 37km north of TC.
It was a stonking 117m at 3.38% copper from 75m, including 3m at 14.91g/t gold and 4.24% copper at the end of the hole.
Emmerson shares shot 9.6c or 130% higher to 17c in response to Wednesday’s announcement. After catching its breath, the market eased the stock back to 15c the following day.
Emmerson says the hole hit an iron oxide breccia pipe which is part of the broader Hermitage anomaly. An earlier hole drilled outside of the pipe returned high-grade gold, copper and cobalt mineralisation but was more zoned than the 117m drill hit causing the excitement.
So while it does not know the dimension of the breccia pipe, Emmerson knows that it was still in mineralisation at the bottom of the hole. The drill hole was only stopped because the RC rig was not capable of going further.
“Who knows what is down there,” Emmerson managing director Rob Bills said.
A diamond rig will be brought in to extend the hole to find out.
TC has a long history of high grade gold and copper production (5.5m ounces of gold and 470,000t of copper). The famous mines on the field were never big on the tonnage side of things. But they were special on the grade side.
It is early days at Hermitage, with the initial success carrying Emmerson’s market cap to $80m.
The company is much more than Hermitage as it pretty much controls all of the prospective rocks in the mineral field, and it is active in the hunt for big-time copper/gold in NSW’s Lachlan Fold Belt.
Euroz Hartleys had a 14c price target on the stock ahead of the stonker result at Hermitage.
What Hermitage has done is remind the market that the TC field has a lot more high-grade copper-gold-cobalt to give, that Emmerson is in the thick of things, and that it knows what it is doing.
Inca & Greenvale:
Excitement around Emmerson’s stonker at Hermitage rubbed off on to the juniors exploring for TC-style IOCG deposits beneath sediment cover in the Georgina Basin to the east of TC in the so-called East Tennant region.
Having said that, excitement was already running hot in exploration circles in the East Tennant after a government-sponsored drilling program confirmed it was in fact a new IOCG exploration frontier.
A 10-hole stratigraphic drilling campaign conducted by Geoscience Australia and the NT’s Geological Survey confirmed the presence of rocks of the right age to host IOCG-type deposits (Olympic Dam, Prominent Hill, Carrapateena, Ernest Henry and others), and the right plumbing systems for deposit formation.
But it did much more than that. It actually made a “discovery” with a drill hole on a patch of ground excised from open exploration ground. Hole NDIBKO4 intersected 326.8 of mineralisation from 89.5m to the end of the hole, with visible copper sulphide mineralisation from 250m.
The government boffins have been doing high-tech analysis of the core since. But there is an expectation that results from the “discovery” hole will become available before the end of the year.
Inca Minerals (ICG) has a particular interest in the results as it has just been granted an exploration licence that will now incorporate the excised patch of ground that is home to NDIBKO4, making it part of Inca’s broader Mount Lamb prospect at its Frewena project area .
As Inca put it, it is as if NDIBKO4 was drilled by the company.
“While the drill core and information/data derived from NDIBKO4 (and hole 01) remains the property of the NT government, the hole has enormous strategic importance in terms of unlocking the SEDEX and IOCG potential of the broader East Tennant,” Inca said.
There is going to be some real excitement when Inca gets around to following up the “discovery” hole and other targets at Mount Lamb.
The effective gift of a discovery hole by the government, along with the rub off from Emmerson’s stonker, has resulted in Inca shares edging up in recent days to 9.8c for a market cap of $46.7m, remembering the group is also hunting for Tier 1 copper/gold deposits in Peru.
Another with exposure to the unfolding big time potential of the East Tennant is Greenvale Mining (GRV). Its shares have been on the tear this week, putting on 7.5c or 24% to 39c for a market cap of $154m.
Two factors are at work – its first exploration hole at its Twin Peaks IOCG project in the East Tennant, and confirmation that its Alpha torbanite project in central Queensland has serious development potential as an indigenous supplier of bitumen for the infrastructure boom, along with diesel and other products.
In the East Tennant, the first of four holes, KNRDD002, intersected the same rock types that host IOCG deposits within the same extensive footprint of hematite and chlorite alteration. Assays are pending and the second hole is underway.
RareX (REE) managing director Jeremy Robinson came across as a bit frustrated with the world on a webinar presentation for the rare earths group during the week.
And who could blame him? He was stuck in hotel quarantine in Perth after returning from an overseas trip and the distraction of have cricket at the Gabba on the TV was a day off.
But more than that would be his frustration around the market yet to move on the re-rating of RareX Robinson reckons is due after breakthrough exploration results at the Cummins Range project in WA’s Kimberley region.
The 2021 drilling program confirmed mineralisation in the primary zone beneath the oxide material in the top 100m of the deposit that pretty much contains the current resource of 18.8mt at 1.15% total rare earth oxides (TREO) and 0.14% niobium.
It is a handy resource in itself but what the primary exploration success did in style - with hits of up to 10.6% TREO - was to confirm Cummins Range is on its way to becoming a much bigger and higher-grade project.
RareX has nevertheless continued to plod along at 10c a share for a market cap of $45m.
But that could change once it gets around to releasing a compliant exploration target on Cummins Range now that it has been shown that the mineralisation continues on in stacked zones to depths unknown.
Even without the breakthrough on the primary zones, RareX could well have expected to have been trading higher in 2021 anyway.
Prices for rare earths are at ten-year highs driven by strong growth in demand, particularly for the NdPr material that is critical for permanent magnets for EVs and wind turbines.
The only significant producer outside of China, our own Lynas (LYC), recently upgraded its annual volume growth rate for NdPr from 7.5% to 10%, and prices for the material have been in a sustained rally for the last two years, reaching $US136/kg.
It wasn’t that long ago that the price was more like $US40/kg, with the sustained rally in prices going to looming supply shortages as the growth of the green economy brings massive change to the supply/demand dynamics of the Chinese-dominated industry.
Lynas has doubled its share price this year and now has market cap of $8.4 billion. RareX would like to see some of that value growth coming its way. The release early next year of the exploration target for Cummins range could be the trigger.
As for Robinson’s overseas excursion to look at rare earths projects, he didn’t “have any immediate news to announce to the world on that”.
“We believe that we can be a multi-mine producer. We have got a good anchor in Cummins Range but we continue to run pretty active on business development. So we’re out looking at projects all the time.’’
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One of Australia’s leading business journalists, Barry FitzGerald, highlights the issues, opportunities and challenges for small and mid-cap resources stocks, and most recently penned his column for The Australian newspaper.