Kristie Batten: A low-key copper-gold explorer with a big target and major interest

One of Australia’s top mining journalists, Kristie Batten writes for Stockhead every week in her regular column placing a watchful eye on the movers and shakers of the small cap resources scene.

The market has largely overlooked Queensland copper-gold explorer Cannindah Resources (ASX:CAE).

While Cannindah’s share price has more than halved this year, the company has quietly been ticking off milestones at its Mt Cannindah project, 100km south of Gladstone.

In July, the company reported a major upgrade to the project’s 2011 resource estimate.

The Mt Cannindah project has a measured, indicated and inferred resource of 14.5 million tonnes at 0.72% copper, 0.42 grams per tonne gold and 13.7 parts per million silver, or 1.09% copper equivalent.

The deposit, which starts at surface, is estimated to contain 104,800 tonnes of copper, 197,300 ounces of gold and 6.4 million ounces of silver, or 158,300t of CuEq.

The updated resource represented a 183% increase in tonnage, 117% increase in contained copper, 229% increase in contained gold and 148% increase in silver ounces, and remains open along strike and at depth.

Two weeks ago, Cannindah completed a A$5 million placement at 4c per share to fund further exploration activity.

Work to ramp up

Cannindah managing director Tom Pickett told Stockhead the company was now well-funded for the next phase of drilling at the project, which he described as a “three-pronged attack”.

“One will be to look to expand that known resource area, but also there’s a significant IP target, which is about 800m to the southwest of where the resource is located,” he said.

“That anomaly is about two to two and a half times the size of the area that we had been drilling at the resource, so we’re going to be drilling into that to essentially provide significantly more tonnes to add to the resource estimate.”

The anomaly, called Target 2, has never been drilled.

Pickett said drilling in the resource area returned visible chalcopyrite, something the company was hoping to see at Target 2.

“Obviously, you never know until you drill it, but there’s really good evidence in terms of all of the geophysical signatures being very, very similar to the area that we’ve been drilling at the resource,” he said.

“So if we do start to see some good evidence of copper in the ground, and hopefully also tell-tale signs of a bit of gold, which we’re also seeing in that resource area, that’ll put a very big spring in our step and we’ll be able to start coming up with some significant news flow, because we’ve got some amazing hits in that resource area previously.”

The company will also look to drill the gold-rich Cannindah East prospect, 500m from the resource, which historically returned 52m at 4.9g/t gold from surface.

Drillers will be mobilising to site shortly following preliminary work which is underway now.

Big interest

While the market has largely overlooked Cannindah, the company has caught the attention of the world’s biggest copper producer, Codelco.

The Chilean major currently has no interests in Australia, making its interest in Cannindah all the more significant.

Codelco first expressed interest in Cannindah in June 2023 with a view to enter into a potential transaction, and last month, visited the project to conduct low impact ground-based exploration activity and to review drill core in Townsville.

Discussions are ongoing and if Codelco walks away, Cannindah will receive the data from Codelco’s work at no cost.

“They’re looking at it from a larger porphyry system perspective,” Pickett said.

“We’ve been drilling into the high-grade breccia zones, which are closer to the surface, and whilst that’s extremely exciting, in a sense, it’s low-hanging fruit.

“The 14 and a half million tonnes is from surface down to 350m, so it’s not like that’s insignificant, but if we can also replicate that, or get 2-3 times the size of that 800m away in this IP anomaly, that’s a significant uplift in tonnes and would be a game-changer for the company in its current form.

“If you do then get Codelco or someone else interested in chasing a larger, lower grade, more bulk tonnage proposition in a porphyry system, which might be feeding these things, that’s just an addition to all that, which would be great.”