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minesite exposure

  1. 2,194 Posts.
    Nothing new here but still a good read, especially CBH

    June 19, 2007

    Tennant Creek Gold Goes Hunting For Zinc


    By Our Man In Oz



    Everything old is new again. If the words didn’t already form part of a catchy song then someone in the geological world would coin the phrase for once non-commercial orebodies making surprise returns as potentially viable mines. The latest to cross the desk of Minesite’s Man in Oz is the Sandy Creek zinc deposit in the Northern Territory which is the centrepiece of a revival underway at Tennant Creek Gold, a small explorer undergoing something of a “born again” experience as a base metals specialist. If the vision of chief executive, Neil Biddle, is fulfilled Sandy Creek might be the start of a series of lead/zinc mines tapping structures which form the Manbarrum project.

    Everything old is new again, Everything under the sun (courtesy Barenaked Ladies)
    According to Biddle, there is hope of Manbarrum becoming “a world class” operation working what are called Mississippi Valley Type (MVT) orebodies, each one of a similar size or bigger than Sandy Creek’s 10.5 million tonnes at 3.3 per cent zinc equivalent. Proving that theory will be the job of a major exploration program which started in May, and is designed to include 30,000 metres of diamond and reverse circulation (RC) drilling at a cost of A$8 million. For a company with A$12 million in the bank that’s a heavy-duty commitment. It also means that shareholders will not die waiting for a result because most of the work is scheduled to be completed before the onset of the next west season which starts in November.

    “We’re pretty confident that the targets we’ve selected will deliver,” Biddle told Minesite during a visit to his Perth office. “We already have a wealth of information from previous work.” He’s right. Work at Sandy Creek dates back to 1972 when the French oil company, Aquitaine, started banging down holes to produce interesting, but not very attractive assays of lead, with a few sniffs of zinc. BHP, Triako and Delta Gold picked over the ground which lies about 70 kilometres east of Kununurra, a town best known as the centre for the Ord River irrigation district. The small fact about farming is important because it’s why another nearby zinc/lead orebody at a place called Sorby Hills, located about 30 kilometres west (and across the border in Western Australia) has been slow off the mark.

    Until now, nobody was overly excited about Sandy Creek, or the theory that it is part of a much bigger system containing a string of look-alike orebodies– which is what MVT structures traditionally do. But there has been a big change in the way the world looks at zinc - the price. Over the past five years the zinc price has risen from US35 cents to around US$1.70 and, as the song says: “everything old is new again”.

    According to Biddle the 10.5 million tonne resource outlined by previous explorers at Sandy Creek is good enough to start a mine. “Conceptual studies we’ve done show that this single ore source is economically viable even when using conservative parameters,” he said. “The structure is open at depth, and in three directions. One of the aims of our current field season work is to test thoroughly possible extensions and the dimensions of Sandy Creek to see precisely what we have.” One of the priority drill targets is an area called Neip which lies just 400 metres north-east of Sandy Creek. If it returns reasonable assays then the economics of the potential project change substantially.

    As well as drilling out Sandy Creek, the plan is to step out along strike to test other structures, including Browns Creek, Djibitgun and Llandandi. These zones of interest have been identified by a variety of geophysical tools, including gravity and induced polarisation. Biddle said two rigs are currently working at Manbarrum. The first line of RC holes had all intersected “significant” sphalerite, a zinc sulphide. The material is yet to be assayed. “We’re planning to work round the clock to complete the drilling schedule,” he said.

    Tennant Creek’s work at Manbarrum is starting to attract investor interest, and the interest of other mining companies. A capital raising earlier this year was supported by London-based RAB Capital, and the Sydney-based zinc miner, CBH Resources, which owns Sorby Hills. By taking a 4.5 per cent stake in Tennant Creek, CBH has put its foot on a future ore source which could both substantially improve the economics of Sorby Hills, and solve a problem of that resource being located close to the Ord River irrigation area. A joint development of Sandy Creek and Sorby Hills would obviously make sense. But, even if the joint development plans goes nowhere CBH has reason to smile with its plunge into Tennant Creek. The shares were acquired at A39 cents each, and the company (which is in the process of changing its name to its ASX code, TNG) was last trading around A70 cents.

 
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