Cohiba picks up more IOCG prospective ground next door to BHP’s Olympic Dam
Link copied to
Cohiba is getting in ahead of the crowd and has picked up more premium, highly sought-after iron oxide-copper-gold (IOCG) ground in the same neighbourhood as one of the world’s largest copper mines.
Cohiba Minerals (ASX:CHK) has landed itself a deal to earn a 51% stake in 346sq.km of ground hosting several IOCG targets in South Australia’s Gawler Craton, right near where BHP has been operating the highly successful Olympic Dam mine for years.
The Warriner Creek project is an attractive, low-risk option for Cohiba, with the company only required to drill two 400m-600m holes (requiring a minimum spend of $600,000) in the first 12 months before having to decide whether to commit to more material expenditure.
If Cohiba decides to go ahead with the farm-in with Tigers Dominion Group after the initial drilling, it can earn its majority stake by spending a total of $3m, which includes the initial $600,000 spend.
“For some time, the company has been reviewing a number of possible opportunities in relation to expanding its presence in the Gawler Craton and establishing itself as one of the
premier IOCG explorers in the region,” CEO Andrew Graham said.
“The Warriner Creek project presented itself as a strategic opportunity and, following significant investigation, it was determined that this project would greatly complement the
company’s existing IOCG portfolio.”
Graham said that with an ever-increasing awareness of the prospectivity of the region, IOCG target areas were at a premium and Cohiba considered it timely to lock in this farm-in agreement.
Cohiba is undertaking a multi-million-dollar exploration campaign in the Gawler Craton after drilling at its Horse Well prospect in March encountered rock types typical of an IOCG environment and returned high grades of up to 12.15 per cent copper.
“The company remains absolutely committed to its exploration programs at Horse Well, Pernatty C and Lake Torrens and regards the Warriner Creek project as a great addition to the group,” Graham said.
The Warriner Creek project lies within a north-west trending structural corridor and exhibits coincident gravity and magnetic anomalies like other IOCG deposits within the highly prospective Olympic Domain, such as the world-class Olympic Dam deposit.
To accelerate a potential IOCG discovery, Cohiba has engaged the services of IOCG experts to thoroughly investigate the drill core from the Horse Well area. This is crucial to helping the company understand how close it is to this type of mineralisation.
It has already assisted Cohiba in identifying new spots to drill and leading it to the drilling of an additional deep hole at Horse Well.
The company has plenty of cash, with $6.5m in the bank at the end of June, to fulfill its exploration ambitions.
This article was developed in collaboration with Cohiba Minerals, 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.