Investors in junior explorers looking to get maximum bang for their buck in 2019 could do worse than consider Encounter Resources (ASX: ENR).

Trading at 6.8c for a market value of $18 million, the hardened Western Australian explorer is shaping up for its biggest year yet in the field since its March 2006 stock exchange listing.

In joint ventures with major miners Newcrest and Independence Group, and to its own account, Encounter’s busy 2019 in the field could involve the drill testing of 10-12 Tier 1-type exploration targets.

The exploration effort takes in programs in the Tanami-West Arunta region in partnership with Newcrest, the Paterson Province in partnership with Independence, and the southern extension beneath cover of the gold rich Laverton Tectonic Zone (LTZ) to its own account.


The LTZ is the first to get rolling with Encounter reporting last week that first-pass drilling had started to test the Nazare prospect.

It is also the first to trial a new whizz-bang geochemical sampling technique developed by the CSIRO called Ultrafine+ which assists in identifying anomalies hidden beneath thin cover which could be worth drilling.

Research shows that most of the metal in surface soil sampling is associated with the fine material which Ultrafine+ targets by separating the minus 2 micron fraction compared with standard field sieved samples of 50-250 microns.

Removing the coarse material brings more samples into lab detection limits. In the case of Nazare, about 75% of traditional soil samples were below detection limits, making the exercise ineffective.

But with Ultrafine+, Encounter got almost blanket coverage with 95% of samples above detection levels, enabling it to define a coherent area from which higher readings were returned.

Importantly, the coherent gold anomaly is coincident with major structural intersection at Nazare, making it a prime drilling target.

Encounter said that if the potential breakthrough geochemical technique is successful at Nazare, it would have “very significant regional implications.” As a result, it has protected the potential regional upside by securing 1,000 sq km in the southern LTZ.

To the north of Nazare, the LTZ is home to gold mines at Laverton (2Moz), Granny Smith (2Moz), Wallaby (8Moz) and Sunrise Dam (10Moz).

Assay results from the 20-hole drilling program at Nazare are expected to be available in late March.

Exploration in the Paterson and the Tanami-West joint ventures will get started around mid-year although the actual drill plans are yet to be determined.

Winu is real

Encounter is managing the Paterson joint venture with Independence.

It will be working up large-scale copper-cobalt targets along a 70km long prospective corridor to test with the drill bit. As part of the alliance between the pair, Independence took up a 9.15% shareholding in Encounter.

The entrance by the $2.8 billion Independence into the joint venture followed last year’s copper-gold-silver discovery called Winu in the Paterson. Rio confirmed the find as a big one this week.

In the Tanami-West Arunta “project alliance’’ with Newcrest, Australia’s biggest gold producer, five joint venture project areas were selected last year which will be the subject of exploration work later this year. The alliance was also extended for a further 12 months.

Three of the joint venture areas – Selby, Watts and Lewis – are being fast-tracked. They cover 100km of a major structural corridor, which extends from the Tanami region of the Northern Territory in to WA.

On the WA side of the border, the region is considered to be lightly explored.