Mandrake conjures up a smart deal near new Chalice discovery
Link copied to
Special Report: Low profile Mandrake Resources is set to become one of the few listed exploration companies with exposure to the Jimperding Metamorphic Belt in Western Australia, scene of Chalice Gold Mines’ recent Julimar nickel-copper-palladium discovery.
Chalice has much of the ground around Julimar, 70km north-east of Perth, locked up under exploration licences (ELs) or exploration licence applications (ELAs), giving some indication of how it views the potential of the area.
But there are prospective parts of the Jimperding Belt held by other parties, including ELA 70/5345 just 30km to the east of Julimar. It is this 140km2 tenement, otherwise known as the Jimperding Project, that Mandrake (ASX: MAN) intends to farm in to.
Under an agreement announced this morning, Mandrake will make an upfront payment of $40,000 to private company Andean Energy Resources (AER) and will then be required to spend $100,000 on exploration to earn a 51% interest in Jimperding.
Mandrake can increase its interest to 80% by spending another $200,000 on the ground.
The company will be targeting nickel-copper-platinum group elements (PGEs) mineralisation hosted in intrusive complexes at Jimperding, the same mineralisation that Chalice has identified at Julimar.
Chalice shares rocketed 175 per cent over a week in late March after the company announced an intercept of 19m at 2.6% nickel, 1.0% copper, 8.4 g/t palladium and 1.1 g/t platinum from its maiden drilling program at Julimar.
Further results from the Julimar program are expected to be released tomorrow as Chalice is due to return to trading.
Mandrake managing director James Allchurch told Stockhead his company was extremely pleased to have secured a foothold in the region just as its geological potential was starting to bear out.
“Exploration work conducted at Jimperding in the late 1970s indicated the presence of nickel-copper mineralisation, providing the rationale for the company to move ahead with the farm-in,” he said.
North Flinders Mines (NFM) and Australian Anglo American were the companies behind those early exploration forays at Jimperding.
NFM conducted surface sampling at the Newleyine prospect, with the rock chips collected returning assays of up to 0.52% nickel and 805ppm copper.
Three diamond drill holes completed by Australian Anglo established the presence of widespread nickel-copper-iron sulphide mineralisation of 0.24% nickel and 172ppm copper over drill widths of up to 240m.
The samples from these programs were not assayed for PGEs or gold.
A mid-1990s exploration foray by BHP also identified anomalous nickel mineralisation near the Mount Pleasant prospect within the project boundaries.
Mandrake, which listed on the ASX in August last year with a focus on the Berinka Pine Creek gold project in the Northern Territory, is highly leveraged to any exploration success it might have at Jimperding.
With its share price at 1.3c prior to entering a trading halt on Thursday, the company had an enterprise value of around zero given it finished the December quarter with $3.6 million in cash and was expecting modest outflows in the March quarter.
Mandrake’s early priorities will be undertaking field assessments to validate the historical work at Newleyine and Mount Pleasant and conducting geophysical work to assist in defining new intrusive targets across the project.