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Tagged with: Reports

Aug 2005 - Sino Gold Limited

Sino Gold Limited (SGX) –Targeting an achievable 500,000ozpa within 3 years

  • The Mining Licence (ML) approval for Sino Gold’s Jinfeng was received on 16 June 2005 on the basis of a 12-year life treating 1.2mtpa to produce 180,000ozpa from about SQ 2006. During the approval period, a scoping study was completed in November 2004 on Phase 2, being a 50% expansion of Jinfeng to 1.8mtpa to produce ~300,000ozpa from MQ 2008 by bringing in the underground earlier.
  • White Mountain in Jilin Province is showing signs that it could become SGX’s next gold mine, with a fairly consistent width of about 20m at grades >4g/t (two intersections in JQ 2005 were 20.4m @ 8.2g/t and 21.2m @ 5.8g/t) extending over at least 1.1km (and still open on strike and at depth). Should it be capable of achieving production rates of ~150,000ozpa, then Sino Gold may be able to achieve its target of 500,000ozpa of production as soon as 2008.
  • The construction of Jinfeng has started in earnest and already the bulk earthworks are 75% complete. In doing so, the orebody has been exposed and with it a number of ore zones and splays that were not in the original model, inferring that the strip ratio may be lower than the expected average of 13 to 1, which should reduce costs and result in additional mill feed.
  • SGX’s experience in achieving MLs at both Jinfeng and Zhangjiashan within one year of the EL being granted implies that the White Mountain ML may be achieved within one year (since it already has its EL), and hence White Mountain could be in production by 2008, especially since it appears to be free milling (not refractory). Sino Gold are aiming to delineate a 1moz resource and conduct feasibility studies at White Mountain by 2006, possibly develop in 2007 and start production in 2008.
  • SGX has an extensive exploration programme at Jinfeng and its surrounding region in Guizhou Province. Aside from the deep drilling already extending the main Jinfeng orebody 120m deeper, there are numerous drill-ready targets within a total area exceeding 530sq km mainly covering parts of southern Guizhou.

Aug 2005 - Cons Minerals

Consolidated Minerals Ltd (CSM) –Becoming a Mid-Tier Diversified Mining Company

  • Consolidated Minerals’ operations are based in WA where it has established an ore reserve/resource life of more than 10 years at Woodie Woodie and a position in the market of consistently producing one of the highest quality manganese ores in the world, currently at 1mtpa. CSM has also been producing 250,000tpa chrome from Coobina, and is now enhancing its product range with nickel production from Reliance’s Beta-Hunt mine, followed by future copper production from Jabiru.
  • CSM’s annualised manganese production has risen to 1.0mtpa and appears capable of reaching at least 1.2mtpa or so. When Coobina runs out of ore (in possibly 5 years’ time), it is expected to move the Coobina plant to Woodie Woodie South and increase production to at least 1.5mtpa of manganese.
  • Production from Reliance’s Beta-Hunt mine is expected to double when East Alpha starts in MQ 2006 and builds up to 4,000tpa to 5,000tpa Ni by December 2006, increasing total mine output to a credible 9,000tpa to 10,000tpa Ni. CSM has a long-term target of producing 15,000tpa to 20,000tpa Ni which appears to be attainable, particularly when it has its own concentrator.
  • CSM is able to have its own concentrator treating nickel ore from old WMC nickel mines because Reliance obtained the nickel rights from Gold Fields, and is hence capable of reaping the benefits like Jubilee (JBM). It should also receive the gold credits from its orebodies, & expects to treat orebodies such as TIR’s Armstrong.
  • The market has upgraded CSM as it achieves higher profits and dividend distributions. This trend has resulted in CSM’s share price increasing by almost 7 times in the past two years from 62c to its current price of $4.00, and is expected to continue, especially as its nickel production strategy unfolds.

Sep 2005 - Mincor Resources

Mincor Resources NL (MCR) – Ramping Up Production by 40% to 14,000tpa Nickel from March Quarter 2006

  • Mincor Resources (MCR) commissioned its two “new” re-opened nickel mines of Redross and Mariners, and extension of Miitel into North Miitel during 2004/2005 and expects to produce ~13,000t of Ni during 2005/2006 inferring that it could produce 14,000tpa Ni from MQ2006.
  • While Wannaway is expected to continue as long as it profitably can, Miitel remains the mainstay of MCR’s operations at Widgiemooltha (south of Kambalda in WA), and with the increased exploration, extensions both north & south of Miitel have already been discovered lengthening Miitel’s probable life beyond 5 years.
  • MCR is a relatively conservative company, only including remnant pillars in resources if there is an MCR approved plan to mine them, which has resulted in a very high resource to reserve conversion rate of >90%. Resources were 68,000t Ni as at 30 June 2005 having increased by a net 12% (8,800t Ni) since June 2004, and a further upgrade is expected within the next 6 months (by MQ 2006), based on the new discoveries and extensions to ore boundaries since late June 2005.
  • There is a market perception that the Widgiemooltha Dome’s Ni grades and orebody sizes are lower than Kambalda’s and it is less prospective. However, the average Ni grades are in fact similar, with high tenor >10%Ni also present, such that the eastern side of the Widgiemooltha Dome appears to be just as prospective with potentially material upside since it has been explored to a lesser degree.
  • While the Widgiemooltha area is littered with old gold workings, the north-south striking Lake Zot dolerite (mainly under the salt lake) has not been drilled for gold, despite its host rock similarities to Gold Fields’ St Ives and Avoca’s Higginsvile, and its proximity to WA’s renowned gold mineralisation-feeding structures. MCR have a programme to RC drill the Lake Zot dolerite starting in October 2005.

Oct 2005 - Sally Malay Mining

Sally Malay Mining Limited (SMY) –Extending SMY’s Life Beyond 8 Years

  • Sally Malay is currently increasing production at both of its nickel mines, being the 100% owned Kimberley Nickel Mines (KNM) in northern WA and 75% owned Lanfranchi Nickel Mines (LNM) south of Kambalda, to ~8,000t Ni pa in 2006.
  • Based mainly on the existing ore reserves of the central orebody at KNM, SMY’s life is about 5 years. However, so far, there has been an ~24% positive reconciliation in contained nickel in the upper orebody (mined essentially from the open-cut). Also, the initial underground levels are exposing significantly greater widths than expected such that the first stoping block indicates a 50% increase in tonnes or 43% increase in contained nickel.
  • Drilling is also extending the Sally Malay orebody further west, with the intersection of 3.6m at 3.1% Ni (and 0.95%Cu) in drillhole KUD56 ~40m from the western boundary inferring further extensions to reserves and resources. When combined with the 11 drillholes already having intersected the lower orebody (below the 500 fault), SMY’s life at KNM could be at least 10 years, at possibly a higher grade than current ore reserves.
  • The initial exposures of Helmut South at Lanfranchi are reminiscent of the thick widths of Helmut with a 16m true width (35m intersected) @ 4.1% Ni containing an 8.1m true width (17.4m intersected) higher grade zone at 5.4%Ni. Some of the Lanfranchi mines were renowned for their thick widths and high grades such as the 6m to 8m thick massive sulphide at 10% to 12%Ni in Schmitz, and the 13,680tNi mined from Skinner in 2000, consisting of 260,000t at 5.3%Ni.
  • Lanfranchi also has the potential to realise a significantly longer life following the discovery that a complete host sequence and contact boundary exists on the northern overturned side of the east-west striking dome. Theoretically the lava channels/embayments that have been mined to-date across the southern side of the dome could recur along the northern side of the dome too.

Nov 2005 - Michelago Limited

Michelago Limited (MIC) – A Leveraged Gold Play

  • On 19 September 2005, MIC announced that (subject to shareholder approval) it had made a placement of A$8.2m in the form of 164m shares at 5Ac to settle A$2.1m associated with the purchase of 82% of BioGold in outstanding loans (apart from the concentrate credit facility), purchase the remaining 17% of BioGold for A$1.6m (to increase MIC’s holding to 99%), pay A$1.3m for the BioGold Technology Licence and other financing fees, and have A$3.2m to cover working cap and the completion of the BioGold expansion.
  • Michelago represents a classic leveraged play on the gold price because its profits are based directly on marginal percentages of the gold price, accruing up to ~20% of spot gold revenue from the gold ores that it treats, less treatment costs. MIC’s NPV appears to increase by about 1.6Ac per US$25/oz increase in the gold price.
  • No further funds are being provided to the ASG (Australian Solomon Gold) consortium to complete the feasibility study on Gold Ridge and any required finance before ASG’s expected IPO in perhaps March - June 2006. Consequently MIC are diluting down their holding in ASG and depending on ASG’s required finance, before its IPO, and the IPO itself, MIC could have possibly 29% to 30% post IPO.
  • MIC intends to decide post ASG’s IPO whether to continue to hold its position in ASG, make an in-specie distribution of its holding to MIC shareholders, or make a combination of the two namely, part held, partly distributed. Theoretically MIC’s post IPO 30% holding could be worth ~A$30m or so.
  • The expansion of BioGold’s Bacox© circuit from 100tpd to 200tpd (currently equivalent to 50,000ozpa to 120,000ozpa) is expected to be completed by December 2006 and should gradually increase the current production (including ~100,000ozpa or so from the cyanide leach) to a capacity of ~230,000ozpa by 2007/2008.

Nov 2005 - Titan Resources

Titan Resources Limited (TIR) –Australia’s Next Junior Nickel Producer

  • Titan appears to be well advanced towards becoming Australia’s next junior nickel producer based on a number of its properties capable of producing nickel, with Armstrong capable of being treated and within a feasibility study, a scoping study in progress on Widgie Townsite, closely followed by scoping studies on Munda, 132N and Widgie 3. All the studies are scheduled to have been completed by the end of March 2006.
  • Titan’s share price fell from about 30c when WMR rejected the Armstrong ore for failing to meet their specifications. It was not that the ore is untreatable, just that it is too similar to Mt Keith ore (it appears to be even better than Mt Keith ore), whereas high iron-rich Kambalda-type concentrates are required (with an Fe:MgO ratio of up to 11:1 they are higher than anything that WMR can produce), to blend with WMR nickel concentrates & prevent WMR’s nickel furnace from overheating.
  • Armstrong ore can be treated to produce an acceptable product and higher recovery than WMR would allocate, and its concentrate can be sold (there are a number of expressions of interest). At this stage the most likely route appears to be CSM modifying the back end of a mothballed gold plant to result in a >1mtpa concentrator at potentially lower costs than TIR may have paid to WMR.
  • CSM has the right to 50% of the Armstrong ore and in November 2005 is expected to have earnt 50% of the gold-nickel orebody at Munda. Munda contains spectacular gold intersections such as 6m @ 27g/t where the nickel and gold orebodies intersect, and separately 11m and 17m @ 17g/t in the hangingwall lode.
  • Conceptually, Titan’s market cap can be theoretically derived from its net cash, 50% of Armstrong and its post AIM floated interest in BioHeap in early 2006. To which can be added 50% of Munda, plus Widgie Townsite, Widgie 3 and 132N. To this can be added possibly a re-opened Mt Edwards and the extensive kms of untested basalt / ultramafic contact that can now be explored at Widgiemooltha using techniques such as SQUID. TIR appears to have the potential to at least double its current share price and attain a market cap of A$40m to A$50m or so.
  • Reed Resources (RDR) have announced that they have entered into a call option (that expires on 14 December 2005) over up to 16% of the Titan shares held by CSM’s wholly owned subsidiary Consolidated Nickel, in which Consolidated Nickel would receive 1RDR – for - 4 TIR shares. RDR’s current 3.8% (~14m shares) held in TIR appears to mainly be held by associates of RDR. RDR may only be able to swap 2m RDR (for 8m TIR) otherwise CSM appears to then hold >19.9% of RDR.

Jan 2006 - Golden Tiger Mining

Golden Tiger Mining NL (GTX) –Establishing a Mineable Resource at Zhudong in Eastern Guangxi

  • Golden Tiger’s current projects are all located in the province of Guangxi in southern China, with most of them contained in a vast ~15,550 sqkm Exclusive Area in the Dayaoshan region of eastern Guangxi (approximately 180km x 75km with a north eastern extension of ~50km x 40km up to the boundary between Guangxi and Guangdong), ~31sqkm at Xinka Tian near Guilin in the north, and ~11sqkm at Yueli in the northwest, south of Fengshan in the “Golden Triangle”.
  • GTX use an in-house Landsat-based technique to identify major structures and potential mineralisation, followed by geochem and IP, which when combined with its managerial team’s knowledge and expertise in discovering orebodies, enables GTX to identify what areas it believes have the greatest potential likelihood of success when it starts drilling.
  • The result has been for GTX to focus initially on the four areas of Zhudong, Jin Zhu Zhou, Ying Yan Guan, and Wanan out of 33 licence areas under scrutiny in the Dayaoshan Exclusive area in which GTX has either a 76% or 82% interest with up to 3 Geological Brigades and 3 Institutes in the Guangxi BGMR. GTX is also focusing on its Yueli prospect in western Guangxi.
  • Rocks in the Dayaoshan region are predominantly from the Cambrian era and the gold orebodies are hence usually free-milling compared to the refractory “Carlin style” Triassic orebodies that are typical of western Guangxi. Drilling has initially focused on Zhudong in the breccia and skarn types of mineralisation there before targeting the deeper “plumbing system” from early December 2005.
  • After Zhudong, the next area of focus is Jin Zhu Zhou which contains a number of nuggetty gold vein sets with an average grade of 1oz/t within sampled grades ranging between 5g/t and 435g/t in good ground conditions. GTX are targeting a buried intrusive to the west as the feeder source for the stacked vein mineralisation, and intend to conduct 2 IP surveys and a geochem stream sediment survey over the general district, starting by the end of December 2005.

Jan 2006 - Michelago Limited

Michelago Limited (MIC) – Merging with Golden China Resources (AUC.V)

  • On 14 December 2005, MIC announced that it had executed a BCA (Business Combination Agreement) under which it intended to merge with Golden China Resources Corporation (AUC.V) using a scheme of arrangement. In the BCA, both companies undergo a consolidation of their shares such that MIC shareholders receive 1 new AUC –for- 25 MIC shares and AUC shareholders receive 1 new AUC –for- 5 old AUC shares (or effectively MIC shareholders receive 1AUC –for- 5 MIC).
  • As part of the BCA, Golden China Resources (GCR) intends to provide MIC with a >US$9.2m loan (secured by MIC’s ASG (Gold Ridge) assets), to add to the US$12.2m ANZ loan and other monies being used to replace the US$25m working capital facility that Shandong BioGold was receiving from the Bank of China to purchase the concentrates treated at the BioGold facility in Shandong Province.
  • Michelago sees the proposed merger as providing the next stage in its growth due to Golden China’s: advanced refractory project at Nibao in Guizhou, exploration and financial assets, 85% international institutional holding, and Hong Kong based investment bank sponsorship connection providing another access to China.
  • Golden China’s refractory Nibao orebody asset in Guizhou may be able to initially supply the expansion of BioGold and enable the combined company to reap the full benefits of mining the ore through to gold bars. Nibao could also have the potential to feed a separate Bactech (bacterial oxidation or bacox) plant in the Golden Triangle. Golden China also has a number of exploration assets and agreements in China at various stages of exploration through to possible fruition.
  • All of the current 3 orebodies at Nibao have differing characteristics and their geological interpretation is under review as further information comes to hand. The resource at Nibao could ultimately range between 1moz and 4moz, although just how much is mineable (some of the grades are <1g/t) depends on the PFS and subsequent BFS, as the orebody requires a higher cost bacox-type process.
  • MIC still appears to be receiving little recognition for its holding in ASG and hence Gold Ridge, despite the increase in the gold price potentially significantly upgrading the Project’s worth. Gold Ridge appears to have upside potential from the “gaps” in its orebodies, at depth, and the fact that its resources were top-cut.

Mar 2006 - Platinum Australia

Platinum Australia Ltd (PLA) – Bringing Smokey Hills into Production at ~95,000ozpa 4E (>40,000ozpa platinum)

  • Platinum Australia (PLA) currently has two main projects in South Africa that are in the process of being taken through to platinum production, namely Smokey Hills in the east (~13km NW of Steelpoort) and Kalplats (~90km SW of Mafeking).
  • PLA expects both projects to soon receive their “New Order” Prospecting Rights allowing Smokey Hills to convert to a Mining Right after completing the BFS in June 2006, and Kalplats to extend the exploration, upgrade the ore resource and complete a BFS by June 2007.
  • Smokey Hills is a conventional UG2 eastern limb (of the Bushveld) reef that is expected to initially be mined by open-cut and then underground, very similar to the UG2 being mined underground on the adjacent Modikwa (ARM/Angloplats) platinum mine about 4km further south. Production has been estimated at ~95,000ozpa 4E PGM (Pt, Pd, Rh, Au) based on diluted grades of 5.0g/t and 82.5% recoveries, although >5.2g/t 4E and >=85% recoveries appear to be achievable.
  • Kalplats represents a previously unrecognised style of platinum mineralisation in 3bn year-old greenstone rocks. Initial studies show that production from the >3.5g/t higher grade reefs could result in 3E PGM production rates ~190,000ozpa, although we have used a more conservative model on 3.25g/t and ~175,000ozpa.
  • Both Smokey Hills and Kalplats appear to have significant upside potential. Smokey Hills could extend its planned mining west across the boundary into Modikwa ground in an arrangement with ARM/Angloplats, while Kalplats appears to have been misunderstood, with recoveries ~80% using conventional techniques, and possibly material extensions on strike and on parallel structures.

Apr 2006 - Crescent Gold Ltd

Crescent Gold Limited (CRE) –Bringing Sickle into Production by the end of 2006

  • Crescent’s main asset is the old Barnicoat operation of Sons of Gwalia at Laverton in WA to which it has added a number of exploration projects to result in the current sizeable land position. A new discovery was made called Sickle, only ~5km southeast of the existing plant, and CRE has been extending the resources and reserves with a target to start production in the December Quarter of 2006 at 60,000ozpa for 5 years at cash costs of ~US$300/oz.
  • The cost of modifying the 1mtpa old plant up to current required standards has been estimated at A$5.6m, and it appears that CRE may then expand the plant up to a rated 1.5mtpa and 90,000ozpa to 100,000ozpa based on resource extensions, for an additional A$6m. Such extensions could come from satellite orebodies, reduction of the cut-off grade with higher A$/oz gold prices and/or following a number of possibilities to extend Sickle below its current 100m depth.
  • Aside from the extended life potential at Laverton, CREs other assets are often overlooked, namely nickel, uranium and China. CRE’s 4 uranium exploration projects are still under consideration for possibly an in-specie / IPO distribution similar to some of the recent very successful uranium exploration IPOs.
  • The 3 CRE uranium projects in the NT (which approves of uranium mining) are relatively advanced, with a project north of the old Rum Jungle uranium mine, the Tennant Creek project containing uranium anomalism, and the Calvert Hills project containing recognised Westmoreland Conglomerate uranium host rock.

May 2006 - IAMGOLD Corp

IAMGOLD Corporation (IGD.AX, IAG, IMG.TO) –Combining Gallery Gold into a >500,000ozpa ~ US$275/oz Cash Cost Gold Producer

  • This report is based on publicly available information and was commissioned by Gallery Gold Limited (now IAMGOLD Corporation) to increase the market’s knowledge of IAMGOLD Australasia’s operations and regional potential of their key projects of Mupane in Botswana & Buckreef in Tanzania.
  • While Gallery Gold brought operating mining expertise and an Australian geological knowledge approach to the merger, IAMGOLD brought financial muscle resulting in a much stronger gold producer with production >500,000ozpa, a market cap >A$2bn, and US$99m in net cash (which includes 148,420oz in gold at US$329/oz).
  • Gallery Gold was bought for approximately US$200m, and has two operational areas being the Mupane mine in the Tati region of Botswana that produces about 100,000ozpa at cash costs of US$260/oz, and the Buckreef prospect in the Lake Victoria Goldfields of Tanzania on which a scoping study estimated production of 140,000ozpa at cash costs ~ US$260/oz for capex ~US$55m.
  • IAG has holdings in 4 operating gold mines in West Africa, being 40% of Sadiola and 38% of Yatela in JV with Anglogold Ashanti in Mali, and 18.9% of Damang and Tarkwa in JV with Gold Fields in Ghana. These 4 holdings resulted in attributable production of almost 450,000oz in 2005 and have been estimated (by IAG) to produce almost 480,000oz at cash costs of almost US$280/oz in 2006. The addition of GGN currently increases production to well over 500,000ozpa at similar costs.
  • All the prospects at Mupane and Buckreef-Busolwa are being re-interpreted using the latest 3 dimensional geological techniques by parts of the same team that successfully applied the technology to Kingsgate’s Chatree mine and region in Thailand. The initial re-interpretations have determined a number of new targets that could lead to higher resources at potentially higher grades.

Jun 2006 - Cons Minerals

Consolidated Minerals Ltd (CSM) –Establishing One of WA’s Lowest Cost Long Life Nickel Producers at >10,000tpa Nickel

  • With the early success from East Alpha’s Hangingwall Reef, potential in Beta West and Beta South, extensions to Beta Contact, mining of Beta Hangingwall (above both the 20 and 40 surfaces), and initial results from the ore sorter, CSM appears to be creating a Nickel Division that has the potential to produce >10,000t Ni pa for at least 10 years at possibly one of WA’s lowest cash costs of nickel.
  • On 4 May 2006, CSM’s Board announced approval for a new $14m ventilation shaft to be sunk at Beta Hunt as part of its visionary 2-phase twin-decline underground nickel exploration and development initiative. Phase 1 targets 90,000t of nickel mineralisation over 1-2km of lava channels south-east on strike from Beta and East Alpha, and Phase 2 targets another 150,000t of nickel, further SE on strike.
  • The completion of the new ventilation shaft enables movement of up to 1mtpa to occur up the decline, potentially comprising 400,000tpa of Nickel ore, 300,000tpa of Gold ore and up to 300,000tpa of waste (depending on the future installation of an underground ore-sorter to remove the waste for use as backfill).
  • The initial results from the A$1.5m CSM-Ultrasort developed ore sorter have been unprecedented, upgrading unsaleable 0.5%Ni low grade waste into a ~3%Ni to 4%Ni very saleable product. This product can be used as a sweetener to increase the average ore grade delivered to the old WMC concentrator, resulting in lower costs, higher recoveries and potentially greater profitability.
  • The discovery of the hidden mega orebody at Greensnake and potential hidden look-alikes at Camp East and Mike East, all infer that Woodie Woodie Manganese has the potential to have a life >20 years at a production rate >1.0mtpa.

Jul 2006 - Avoca Resources

Avoca Resources Limited (AVO) –Becoming a >100,000ozpa ~US$300/oz Cash Cost Gold Producer, initially with Trident

  • Avoca has significantly advanced its understanding of the gold mineralisation at its Trident mine at Higginsville, clearly delineating the 3 main ore types of Athena, Western and Eastern. The current mining plan focuses on building up the Western Zone to a sustainable production rate of >100,000ozpa, and taking ore in the “gap” area while declining both towards the Western Zone and down to Athena.
  • It appears that a production rate of >100,000ozpa can be achieved by 2008 through bulk mining the central area of Trident’s 20m - 25m thick Western Zone using Kanowna-Belle style (sub-level open) stoping while bench stoping the ~5m thick Athena for a combined production rate of >700,000tpa @ >6g/t (>125,000ozpa at a 93% recovery).
  • AVO is taking the short-cut to production through toll-treating its ore in a number of nearby plants, but such expected production rates soon place a strain on regional plant availability. Consequently, AVO appears likely to construct its own 1.0mtpa to 1.5mtpa plant by 2008, especially if Trident continues to grow, and its regional ore sources are treated (such as Fairplay, the Palaeos, and possibly Erin).
  • Trident appears to be a combination of Norseman and St Ives-type mineralisation, with thicker, more continuous and better, steep dipping ultra high grade Athena veins, linked by flats, abutting the Western Zone.
  • Just what production rate can be achieved (potentially >170,000ozpa) and at what cash cost appears to be something that can only be delineated through mining from the Western Zone at possibly >5g/t and Athena at potentially as high as 20g/t. While the initial production depends on what can be mined from the “gap” area.

Aug 2006 - Kingsgate Cons

Kingsgate Consolidated Limited (KCN) – Expanding to ~300,000ozpa gold and ~2mozpa silver from 2008

Aug 2006 - Marengo Mining

Marengo Mining Ltd (MGO) – Delineating their Copper-Moly-Gold Orebody at Yandera

  • In early 2005, Marengo switched from exploration in WA to establishing an orebody at Yandera in PNG. Yandera had been explored by BHP in the mid-1970s at the same time as BHP farmed-in to Ok Tedi (and delineated the gold cap over the orebody) which caused Yandera to drop onto the back burner. A number of companies have since looked at Yandera mainly from a large company viewpoint but failed to take it any further until Marengo acquired the Project.
  • Yandera is a classic large company target with a copper geochem anomaly ~8km long by 2km wide averaging 0.5%Cu with 5 identified phases of porphyries containing grades up to ~1%Cu (plus Molybdenum and Gold credits), which may include some higher grade zones. MGO started their drilling campaign at the end of May 2006 on their main Gremi Zone target aimed at establishing continuity for a recognised JORC resource by December 2006.
  • As we have seen with other Australian junior companies, the large mining company approach is not necessarily always the way to develop these orebodies, and geological techniques and technology have advanced considerably since the 1970’s. A greater understanding of Yandera is expected after MGO brings in structural geological consultants to delineate the main controls of the copper-molybdenum-gold mineralisation, and identify how best to proceed forward.
  • Although Yandera generally appears to have an overall low grade signature for Molybdenum (~150ppm or 0.015%), we encountered a number of samples of visible Molybdenum, including rocks that appeared to be riddled with it (as shown in Figure 6b on page 4 of this report).
  • Gold appears to have not been a separate consideration as a individual entity when Yandera was being explored, despite the presence of pin-head sized visible gold, and alluvial workings (that are still being worked). Reputedly there is gold in quartz veining too, which requires further follow up and investigation.

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