Special Report: Hard-drilling Zenith Minerals (ASX:ZNC) is ‘’hammering’ some very large gold systems at its flagship projects in Queensland and WA.

For investors, new mineral discoveries can create an enormous amount of value.

~$28m market cap explorer Zenith is in the hunt for “those big deposits that can have a big value impact” and, in that respect, at least three of its core projects are very exciting.

In May, the company uncovered a brand new, very high-grade copper prospect called ‘Snook’ at the advanced Develin Creek VMS project in Queensland.

In June, a maiden drilling program at the greenfields Red Mountain target in Queensland hit 13m at 8.0 g/t gold, including 6m at 16.7 g/t gold from surface.

Then in August, early stage drilling at the Split Rocks project in WA intersected near surface, high grade gold at five target areas — including 32m at 9.4g/t.

Both Red Mountain and Split Rocks have returned thick, shallow, and high-grade gold – the trifecta — in very early stage drilling.

The upside for the company and its shareholders is enormous.

Zenith’s leadership team have worked with a number of the world’s biggest gold miners – such as Normandy, Newcrest, Newmont, AngloGold, Aberfoyle – and have been involved in a number of discoveries.

“We have a good reputation as being project finders,” Zenith managing director Mick Clifford says.

“The important thing is that we have an active exploration program over our projects, which are all in tier one regions proven to host multi-million-ounce gold deposits.”

It’s early days, but Clifford’s aspiration is +1moz at both Split Rocks and Red Mountain, and a 10 million tonne resource at Develin Creek — something that is really capable of ‘turning the dial’ on the company.

“The catalyst for us is that we have a lot of action — we have the funds, and we will be hitting a lot of high-quality targets over the next 3-4 months,” he says.


Red Mountain: a frontier giant

Red Mountain is Zenith’s #1 project, and one the team has generated “from scratch”. This is pure frontier exploration.

The Queensland tenements were originally pegged about three years ago, but a ‘boots on the ground’ reconnoitre by Clifford and a senior geo was not initially promising.

“I have to say for about the first day and half we thought it was rubbish and we would drop it,” Clifford says.

“But on the afternoon of the second day we wandered up this little hill and went ‘what the hell is this stuff?’

“Everything up until that point had been granite – but here we were looking at all sorts of volcanic rocks that had never been mapped by the geological survey or recognised by any previous explorer.

“We did some soil and rock sampling and got some encouraging numbers; then, with systematic work, put together this target, which we have now drilled.”

Zenith’s very first 10 RC hole (780m) drill program – which only tested the first ~250m of a 2.2km ‘round’ anomaly — returned a number of thick, shallow, and high-grade gold results.

The Red Mountain project, including maiden drilling results.

“First result we got in the very first hole was that 13m at 8g/t gold from surface,” Clifford says.

“You can’t ask for much better than that in a maiden drill program.”

Working up a concept from scratch, and then hitting those sorts of grades in maiden drilling is an impressive feat for any explorer.

“Talking to a number of technical peers and mates in the industry — they all got onboard the story really quickly,” Clifford says.

Its early days, but Zenith’s has a couple of really nice regional analogues that it is working with for this type of mineral system.

“You have the 1.2moz Mt Wright, which is shaped like a pencil; the strike is 200m and the depth extent is 1.2km,” Clifford says.

“Then deposits like Mt Rawdon (2.5moz), Kidston (5moz) are more ‘washer shaped’, where the mineralisation sits around the margins of the breccias, or the pipes.

“Some of the drilling we have been doing to date is applicable for testing both models, but we need to get a heap more holes in before we understand it.”

Drilling is ongoing, testing another 500m of the 2.2km long target.

“That’s a really exciting program, hopefully one that will deliver some continuous mineralisation over that full 500m,” Clifford says.


Split Rocks: ‘poorly tested and highly fertile’

The 650sqkm Split Rocks project sits within a major 10moz gold district, halfway between Perth and Kalgoorlie in WA.

Also pegged by the company about three years ago, Split Rocks hosts the same major fault structures feeding the region’s multi-million-ounce scale deposits.

Zenith has 18km of ‘strike’ where it has now identified 18 large gold targets.

It started testing these over the last few months, and initial results have been spectacular.

Resample results from recent first round 81-hole aircore drill program at Split Rocks have confirmed high-grade gold results at five prospect areas.

At ‘Dulcie North’, new results include 32m at 9.4 g/t gold, including 9m at 31.4 g/t.

The highest individual 1m sample returned 199.2 g/t gold.

Split Rocks gold targets, including significant 1m resample aircore drill results (yellow captions).

“The first round of results was really very good, where we returned multiple, ore-grade equivalent intersections at five separate targets,” Clifford says.

“We are really encouraged by the results, certainly on the Dulcie leases. This area was previously relatively poorly tested, and clearly highly fertile.”


A ~120-hole air core drill program testing areas close to these recent results will kick off early this month, with ‘Dulcie Laterite Pit’ – which remains open for another 900m — the initial target.

“We’ll also move on to test another high-conviction target located 4km west of ‘Dulcie Far North’, whilst we work through the permitting process to allow follow-up drilling at ‘Estrela’, ‘Dulcie North’ and ‘Dulcie Far North’,” Clifford says.

A further 8 of the expanded 18 targets are yet to have first pass drill testing.

Drilling for these areas is planned in Q4 2020.

“If we have some clearly identified zones of continuous mineralisation at the end of this program, that potentially puts us into the realm of starting resource drilling,” Clifford says.

“We would be ecstatic with that outcome.”

Develin Creek: A copper ‘needle in a haystack’

The Devlin Creek VMS project in Queensland already has a 2.57 million tonne resource grading 1.76 per cent copper and 2.01 per cent zinc, with significant gold and silver credits.

VMS deposits are generally very high in value but can be relatively small, often  occuring in ‘clusters’, which means a VMS camp can be mined for a very long time.

Deposits in this VMS category are currently exploited in Queensland by Red River Resources (ASX:RVR) and by Sandfire Resources (ASX:SFR) in Western Australia.

This ‘clustering’ effect is already evidenced by Zenith’s current resources for the Sulphide City, Scorpion and Window deposits.

But Zenith’s ultimate goal for Develin Creek is a 1mtpa operation for at least 10 years – which means finding a lot more metal.

“We have had a systematic exploration program going for the last few years,” Clifford says.

“Early this year, as part of that program, we passed a milestone of collecting about 15,000 soil samples.

“We got one sample – and I’m talking one single soil sample – that had the right sort of copper-lead-zinc-base elements signature.”

Zenith went back out to scout around the area where that single sample was taken, about 30km from the current resource, which happened to be right on top of an untouched copper gossan (exposed weathered mineral zone).

The gossan was sampled and returned an impressive 7.6 per cent copper.

“That target called ‘Snook’ is absolutely brand new,” Clifford says.

“There are no prospecting pits from old timers, and no exploration company has ever picked this zone up before.

“Subsequent exploration shows this thing is a couple of hundred metres long and has the right VMS ‘geochemical’ signatures.”

Snook will be drilled for the first time in about October this year, once we can release the drill rig from Red Mountain.

Just goes to show – sometimes you find the needle in a haystack,” Clifford says.

Develin Creek copper-zinc-cold project, including the new Snook discovery (green).

Rerating events are incoming

Zenith recently raised $5m which allows it to hit these targets hard over the remaining months of 2020.

“We are drilling at Red Mountain, Split Rocks, and Develin Creek, while Rumble Resources (ASX:RTR) will be drilling in October on the[free-carried joint venture] Earaheedy zinc project,” Clifford says.

“We also have ongoing field work at a couple of our other projects, trying to bring them forward to drill status as well.

“Investors want to see action – and the best way to deliver results is through drilling.”



This story was developed in collaboration with Zenith, a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.