Special Report: Cazaly continue to grow with major project exploration licences and acquisition, while two other part-holdings achieve promising developments.
The acquisition of the major land position of almost 2600sqkm within the Pilbara region was the key announcement from a quartet of releases over just a couple of days.
Cazaly Resources (ASX: CAZ) confirmed it had secured the rights of the land holding at Ashburton Basin with several other applications for exploration licences in the pipeline. There are no competing applications.
The project covers major regional structures thought to be highly prospective for major gold mineralisation and is located near Northern Star’s (ASX: NST) Paulson gold deposit and Kalamazoo’s (ASX: KZR) recently acquired Mount Olympus gold deposit.
Baring Downs
Cazaly have secured the tenements along an 80km strike covering the Baring Downs Fault, which lies centrally within the Ashburton Basin.
Results from a 2011 seismic survey identified three major terrane bounding sutures across the approximate 450km transect, which included the Baring Downs Fault. The collaborative group highlighted Baring Downs as an important, deeply seated, crustal scale structure with the potential to host significant mineralisation.
To this point, there has been little modern exploration. Some work has occurred at the northern and southern margins where the Paulsens and Mount Olympus mines are situated, but no systematic work has focused on the Baring Downs Fault, presenting a unique opportunity.
Diamond exploration during the 1990s reported several kimberlite and lamproite intrusions in the area, with the presence of these minerals along with widespread goal mineralisation, evidence that the fault is a major, deep seated mantle tapping structure.
Channing Gold Prospect
The company also secured a two month option at the Channing Gold Prospect following recent discoveries of nuggety gold-bearing rocks. The presence of alluvial gold was confirmed with the company undertaking further detailed assessment of the prospect to determine whether to proceed with the purchase of the licence.
Terms of this acquisition will see Cazaly pay a $20,000 option fee for the two month exclusivity period, with $150,000 to be paid on execution of the option. Other terms include:
- Payment of $100,000 upon delineation of at least 100,000 ounces of Joint Ore Reserves Committee (JORC) compliant gold reserves
- Upon commercial scale mining, payment of $8 per ounce gold in a JORC compliant mining reserve, and
- 1% net smelter gold royalty
As part of this assessment, Cazaly also grabbed the rights to the surrounding exploration licence.
The terms of this agreement require an upfront payment of $50,000 cash, with a further $250,000 payment (in either cash or shares) required at the delineation of 200,000 ounces of JORC compliant gold resources and a 2% gross revenue royalty.
As the company continues to review existing data and prior work in the area, Cazaly will also compile historical work in the region and geological and geophysical datasets ahead of planning future exploration.
Halls Creek Copper Project
Cazaly also confirmed it had taken full ownership of the Halls Creek project, after purchasing the share of their joint venture partner.
In an agreement with 3D Resources Limited (ASX: DDD), Cazaly has now increased its interest in the project from 20% to 100%.
As part of the acquisition, Cazaly will make an upfront, non-refundable cash payment of $50,000 within five days of the execution of the agreement, with a further payment of $200,000 to be made at the completion of this agreement.
A further $250,000 payment will be made upon production of minerals, which are considered of a commercial and saleable quantity.
The project covers part of the Halls Creek Mobile Zone which is a highly prospective range of commodities, including base metals, gold, diamonds and nickel.
Specifically, the project hosts the Mount Angelo Copper-Zinc deposit, an extensive sector of near surface oxidised copper-zinc mineralisation overlying copper-zinc sulphide mineralisation. Previous results from work conducted prior to the creation of the joint venture include:
- 64m at 2.72% copper (1.13% zinc)
- 62m at 2.41% copper (2.75% zinc)
- 37m at 2.63% copper (6.05% zinc)
- 16m at 5.91% copper, and
- 18m at 2.53% copper
All previous exploration on the project will be reviewed by Cazaly, with very good upside potential in the untested northern extensions of the deposit. Furthermore, downhole EM conductors previously defined have yet to be drill tested.
What else is happening?
There were two other announcements related to part-owned projects within the Cazaly portfolio, concerning the 20 per cent-owned Mt Venn Gold project and the 49 per cent-owned McKenzie Springs work.
At Mt Venn, extensive Phase 2 drilling was set to get underway, targeting several high-grade gold deposits.
In a release from partner Woomera Mining Limited (ASX: WML), the next phase drilling program would focus on three particular prospects at Chapman’s Reward, Lang’s Find and Three Bears.
The three locations have historically been underexplored due to geographical restraints but the project is now well positioned following a strongly supported capital raising effort by Woomera and improved infrastructure in the region.
The project also received a $150,000 co-funding exploration grant from the WA government leaving the venture well-funded to execute extensive drilling. A second application for a further $150,000 funding from the WA government will be submitted in the new year.
Meanwhile at McKenzie Springs, the joint venture with Fin Resources (ASX: FIN) continues to press forward with the commencement of the diamond drilling program aimed at identifying nickel sulphides .
The project – a 9km strike alongside the Savannah Copper-Nickel mine in the East Kimberley region of Western Australia – contains underexplored layered mafic-ultramafic intrusions with the prospect of copper, nickel and platinum group element (PGE) mineralisation.
Three diamond drill holes, for a total of 850 metres, are planned with the promise of intersecting strong high priority conductors defined in the Fixed Loop Electromagnetic (FLEM) geophysical surveys.
The holes will test a shallow conductor, an intermediate depth conductor and a deeper conductor. Priority of the drillholes will be for downhole electromagnetic (DHEM) surveying to assist in establishing a three-dimensional geometry of the exploration target.
Cazaly though, is by no means done. While the portfolio has expanded with the acquisitions of the Ashburton Basin and increased holding at Halls Creek, the company remains focused on more acquisitions with the potential of an advanced project firmly in sight.
This article was developed in collaboration with Cazaly 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.