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Junior explorer Redbank Copper now has exploration ground near BHP’s world-class Olympic Dam mine in South Australia.

Redbank’s (ASX:RCP) “Millers Creek” nearology play – granted for an initial period of one year from September – is in the middle of a significant iron-oxide copper and gold ore deposit near Woomera in South Australia.

Iron-oxide copper gold (sometimes shortened to “IOCG”) can include large, highly valuable concentrations of copper, gold and uranium ores.

BHP’s (ASX:BHP) Olympic Dam is one of the biggest mines in the world, producing about 135,000 tonnes of copper in FY18 with a target of 200,000 tonnes per year.

Redbank says it has identified “at least one compelling undrilled gravity anomaly” which it intends to confirm and drill test.

“The Millers Creek gravity anomaly compares favourably with known deposits and prospects in the region,” Redbank told investors.

But the explorer also cautions investors that exploring for IOCG deposits, such as Olympic Dam, can be ‘hit and miss’.

Location of Millers Creek relative to significant mines
Location of Millers Creek (red) relative to significant mines.

In 1975, a target was modelled under 350m of cover in at Olympic Dam. The first drill hole hit mineralisation, but the next four were “barren”—the deposit only confirmed a year later after further drilling.

And at OZ Mineral’s nearby Prominent Hill mine, high-grade copper-gold mineralisation was only discovered in 2001 by drill testing a non-magnetic area.

An application for an additional 957 square kilometre licence next to the Millers Creek tenement has the potential to bring the combined project size to over 1,100sqkm, Redbank told investors.

The Gawler region is currently being surveyed for uniform, high-quality magnetic data by the South Australian Government and Geoscience Australia, with the CSIRO producing magnetic source depth estimates from this data.

Redbank will be able to use to this data – released in December this year — to plan exploration at Millers Creek “as a compliment to its Redbank project during the wet season in the Northern Territory”.

The Redbank share price remains at a 12 month low  of 1.5c.