After 20 years Argonaut to drill copper-gold project; shares up 23pc
Junior explorer Argonaut Resources is ready to begin a major drilling program at its Torrens copper-gold project in South Australia after two decades of persistence.
“This final approval marks the end of a 20-year process to gain access to the giant Torrens anomaly for a major exploration drilling program,” chief Lindsay Owler told investors.
“Authorisation was only pursued so doggedly because of the exceptional geological properties of the target.”
The news spurred the company’s (ASX:ARE) shares up 23 per cent to 2.7c on Monday morning. They closed at 2.6c.
The 70-hole approval came from the Aboriginal Affairs and Reconciliation minister and is the final hurdle to starting deep drilling at the Torrens project.
The reason it took so long for Argonaut to secure the necessary approval was because there were three native title groups competing for rights over the area, Mr Owler told Stockhead.
“The struggle between two culturally similar groups and one group more from the western desert meant there wasn’t very much cooperation between the groups on native title issues, where sometimes there can be,” he said.
“This meant that from the time of the Native Title Act coming into place, we had something in the order of six different native title claims over this exploration licence. It wasn’t until a decision by the Federal Court in August 2016, which as a result of a long trial — hearing all the evidence from the three different groups, the judge dismissed the native title claims of all three groups and that was an event which allowed us to move forward.”
In the absence of any native title claimant in South Australia, a company must seek a determination to proceed. “We got that determination in our favour in March 2017 and that was the trigger for us to make an application for environmental and operational approval,” Mr Owler said.
Argonaut says the Torrens anomaly has a footprint considerably bigger than BHP Billiton’s Olympic Dam mine — the fourth biggest copper deposit and largest known single deposit of uranium in the world.
Drilling of the Torrens anomaly by Western Mining Corporation in the late 1970s and by the Torrens joint venture in 2007 and 2008 confirmed the existence of a major iron oxide copper-gold (IOCG) system beneath several hundred metres of sedimentary cover.
IOCG deposits range in size from between 10 million tonnes and 4 billion tonnes or more and can host grades of up to 5 per cent copper and 3 grams per tonne of gold.
The Torrens joint venture is between Argonaut (30 per cent) and Aeris Resources (70 per cent).
Argonaut will undertake a helicopter-supported drilling program from a salt lake and will now begin sourcing the necessary equipment. The company expects to begin drilling in about 10 weeks.
Drilling will be down to a depth of 1200m and two drill rigs will be active on the project. Argonaut expects to complete 30 drill holes in around 15-18 months.
“That is a massive undertaking. It’s of the same order or a few more than Western Mining drilled when it first arrived in this part of the world in the mid-70s,” Mr Owler said. “It’s going to be one of the biggest and most adventurous, exciting exploration programs that South Australia has seen since that program in 1976-77 when they found Olympic Dam.”