Bryah Resources has company-defining ore deposit in its sights
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Special Report: Bryah Resources’ partner OM Holdings has spent over $1m on exploration at their manganese joint venture in WA, a region also renown for high-grade copper and gold.
The Bryah Basin is Bryah Resources’ (ASX:BYH) flagship project, located 150km north of Meekatharra, and is host to some of WA’s larger copper-gold mines such as Sandfire Resources’ (ASX:SFR) DeGrussa mine.
In a double-bonus, the Bryah Basin project also contains some rich manganese formations.
“We are looking for a big copper-gold system like DeGrussa, and we have had some sniffs of copper at our Windalah Prospect, including 8 metres at 900ppm in one recent drill hole,” said managing director, Neil Marston.
The project area covers 1,185sqkm in a relatively underexplored region for manganese that includes a series of hills called the Horseshoe Range that contain manganese-bearing shale.
“It is an opportunity for us because we have so much of the Horseshoe formation under our control, about 70 km strike length” he said.
Exploration and historical mining activities to date in the Horseshoe Range has focused mostly on outcropping manganese features, however Bryah is now targeting manganese under shallow cover.
“We are stepping away from the outcrops and in drilling this year have been striking higher-grade mineralisation of plus 30 per cent manganese which is not exposed at the surface and this success is really exciting,” said Marston.
This year, the company has undertaken 3,996 metres of drilling to test new manganese targets.
In its latest drilling the company is finding manganese mineralisation including at its Brumby Creek prospect.
The company has a geological team carrying out a geophysical Induced Polarisation (IP) survey over Brumby Creek where its drilling produced significant intercepts a few weeks ago.
Impressive hits from this drilling at Brumby Creek include 30m at 33.6 per cent manganese, including 16m at 38 per cent manganese from 21m.
The IP survey is intended to pick out any promising manganese deposits under cover inside an exploration area of 500m by 1,000m metres at the Brumby Creek deposit.
“We are doing pretty close space lines right over the top of that to see what the signal looks like, and then as we step out the lines increase to 200 metres apart, said Marston.
“We have a 2,000 metres infill reverse circulation drilling program underway and a follow-up diamond drill program, that will be completed by the year end,” said Marston.
“The drilling results will feed into a mineral resource estimate being undertaken over a number of project locations,” he said.
These locations include Brumby Creek, the historic Horseshoe South manganese mine and an area called Black Hill.
“We have proven the theory that there is high-grade manganese under cover that has not been discovered or explored for in the past,” he said.
“The manganese compares favourably to any other projects in Australia in terms of grade.
“From the drilling done to date, we expect to be reporting a manganese resource grade of somewhere around the mid-to-high 20 per cent levels,” stated Marston.
After screening and crushing the manganese, the grade is likely to be higher than this.
“Historically in this area the manganese ore that has been produced has been over 40 per cent,” he said.
Bryah Resources’ partner for its Bryah Basin manganese project is OM Holdings (ASX:OMH).
The manganese miner secured an initial 10 per cent interest in the project last year through $500,000 of exploration expenditure under the joint venture’s first phase.
OM Holdings can earn a further 41 per cent stake in the Bryah Basin manganese project by spending $2m in total on exploration activity, which would take its interest to 51 per cent.
“To date, OM Holdings has provided funding for about $1m worth of exploration expenditure, and we expect to use up the balance of that $2m in 2021,” Marston said.
Bryah Resources remains the manager of the joint venture until OM Holdings has earned a 51 per cent interest in the Bryah Basin project.
Bryah can elect to dilute down to a 30 per cent interest, with OM Holdings needing to spend a further $4.3m on exploration or development costs to eventually earn a 70 per cent interest in the joint venture.
Any mining operation for manganese at Bryah Basin is likely to enjoy low mining costs because of the relatively high-grade of the deposit.
Manganese production is likely to be very simple, using a mobile crushing and screening unit to beneficiate ore before shipment.
“Once the project gets into production, transport will be our main cost as we are about 700 km to the port at Geraldton,” said Marston.
“However in Australia, we can move product on road trains at very reasonable and cost-effective prices,” he said.
Manganese ore prices have been weighed down lately by high stocks at Chinese ports.
“Manganese prices have come off a bit. They haven’t had a good run, apart from a very small spike back earlier in this year, which was due to South African mines shutting down [because of the COVID-19 pandemic],” said Marston.
“Prices are pretty much down 30 to 40% on levels at the beginning of 2019,” he said.
“There is a big stockpile of manganese sitting in Chinese ports at the moment, about 6 million tonnes of product when generally it is about 3 million tonnes,” he said.
Despite market talk of manganese having a wider application in EV batteries and battery storage units, its mainstay use is steel production, and this is likely to remain the case for some time.
Manganese ore is processed through ferroalloy smelters to produce ferro-manganese and other alloys which are then used in the steelmaking process. Manganese is an essential ingredient for making steel.
“Manganese prices are expected pick up once the stockpiles reduce, with most pundits forecasting a long term price of about $US5 per dry metric tonne (A$7/dmt) for 37% manganese ore,” said Marston.
Tumblegum South prospect has a current gold resource of 600,000 tonnes at 2.2 grams per tonne (g/t) for 42,000 ounces, and preliminary modelling has shown it is suitable for open pit mining.
“We’ve only done very limited drilling to date on that project, and most of the resource is no deeper than 100 metres vertical depth,” said Marston.
“Additional drilling needs to be done on the project,” he stressed.
Tumblegum South lies within Bryah Resources’ Gabanintha project, located 40 km south of Meekatharra in WA’s Mid-West region, and is along strike from the Gabanintha gold mine.
Bryah Resources is in talks with possible partners for a potential ore sale or profit share-type mining agreement for Tumblegum South which is about 70 hectares in size.
Run-of-mine ore is estimated to be between 2.5 and 3 grams per tonne for gold.
The company is planning a small open cut mining operation at Tumblegum South, probably lasting around 12-months, to extract the shallow gold mineralisation.
“We have a mining lease application going through the WA Mines Department, which we are hoping will be processed and approved in the not too distant future,” said Marston.
Bryah is currently seeking approvals for this project with a view to mining starting later in 2021.
“It will generate a nice amount of cash flow. These funds will enable the company to expand its exploration activities, or secure new opportunities” he said of the small-scale mining project.
“Next year, our aim is to ramp up exploration for gold in the other parts of the tenement area at Gabanintha which cover 170 km2 as well as pushing ahead with copper-gold exploration in the Bryah Basin,” said Marston.
At Windalah, a copper-gold prospect within its Bryah Basin project, the company has drilled 10 drill holes in 2020, including one intercept of 12 metres from surface at 5.13 g/t gold including 2 m at 21.5 g/t gold from 3 metres depth.
“We have just completed a 6,000 metre aircore program over four locations including over a large multi-element soil geochemical anomaly at Windalah East. The air core results are expected over the next couple of weeks and our aim is to go back and follow these up with another series of drilling,” he said.
The 2020 round of drilling identified a steeply south to southwest plunging horizon at Windalah that modelling confirms is open at depth.
The company intends to return to this zone to chase the downdip with additional drilling.
“The western end of Windalah has been quite encouraging and we think we are certainly vectoring towards something significant,” he said.
This article was developed in collaboration with Bryah Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.