Krakatoa starts its hunt in the land of gold-copper giants
Link copied to
Special Report: If proximity to major mines counts for anything in mineral exploration – and many qualified people will tell you it does – Krakatoa Resources is on the right track with its newly acquired Belgravia Project.
Krakatoa (ASX: KTA) recently started fieldwork at Belgravia, which is located 40km north of the country’s largest gold and copper mine, Newcrest Mining’s Cadia Valley Operations, in New South Wales’ famed Lachlan Fold Belt.
As Krakatoa executive chairman Colin Locke explains, it is the beginning of the search for a similar beast.
“We’re looking for another Cadia, that’s no secret,” he says.
“That’s why we’ve grabbed the ground.
“We’ve got a geologist that is intimately familiar with Cadia, who has walked the ground at Belgravia, saying the alteration is the same.”
The geologist Locke refers to is Ian Cooper, who was a resource development geologist at Cadia in the early 2000s and was involved in the discovery of substantial resources at the Cadia Quarry and Cadia East deposits.
Cooper is currently employed by Rangott Mineral Exploration, which has been appointed by Krakatoa as its exploration contractor. He will lead the field team conducting exploration at Belgravia.
Between Cooper and Steven Woodham, the project vendor who remains a consultant to the company, Krakatoa has ample local expertise and knowledge to leverage off in its search for porphyry deposits.
Woodham was a founding director of LFB Resources, which was taken over by another prominent company in the region, Alkane Resources, and has owned and operated a drilling company servicing the region.
He kept the Belgravia tenements in good standing under the ownership of his private vehicle, Locksley Holdings Pty Ltd, before agreeing to vend it into Krakatoa in September this year.
One of the unique aspects of Belgravia, particularly in a part of the world so renowned for its prospectivity, is that it is essentially virgin ground, with only nine very shallow aircore holes ever being drilled on it.
This is even more surprising when one realises that the Belgravia tenement comes within 3km of the undeveloped Copper Hill porphyry copper – gold deposit.
Locke attributes this to legislation in NSW that has only recently been changed to provide better access for mining and exploration companies and to the fact that Woodham has been busy with other ventures.
But he says Woodham’s belief in the potential of the ground is obvious.
“Otherwise he wouldn’t have kept dipping into his own pocket over all those years to retain the licences.”
Work by Locksley has generated six initial copper-gold targets for Krakatoa to consider.
Among these is the Bell Valley target, where the company has secured land access and been able to start field-based exploration.
During due diligence, Krakatoa identified the Bella Prospect, a doughnut-shaped magnetic pattern considered characteristic of porphyry intrusion present within the Bell Valley target.
Although there is more work to do, Bell Valley shapes as the potential focus of a maiden drilling program that the company intends to start as soon as possible.
It is generally acknowledged that exploring for big porphyry systems like Cadia is not a cheap business, but Locke believes Krakatoa has a number of factors working in its favour so that costs don’t become prohibitive.
For one, the project is 20km from the booming country town of Orange, where the exploration team resides, and not in some remote corner of the outback.
Logistics in the region are straightforward and infrastructure is well developed.
Locke also anticipates Krakatoa being eligible for the New South Wales government’s New Frontiers Cooperative Drilling program, which provides grants of up to 50% of drilling costs, up to a maximum of $200,000.
With only 165 million shares on issue and a market capitalisation of less than $7m, the company is highly leveraged to any exploration success at Belgravia.