The Paterson Range which lies in the Proterozoic Paterson Orogen has been a forgotten region of mineral wealth. It has only been the focus of all punters because of the recent Greatland Gold announcements on Havieron. In addition to that has been the rumour mill on Rio Tinto possibly finding another “Olympic Dam” style deposit. Since the discovery of the Telfer gold-copper mine, the region has highlighted its extreme mineral wealth, but in reality, I feel that it has taken a backseat run to all the other provinces regarding discovery excitement.
Paterson Range – Mineral Wealth
The Paterson range is home to three world-class mineral deposit. Geologically the area is known as the Paterson Proterozoic Orogen. The most famous is Telfer Gold-Copper Mine followed by Nifty Copper Mine and the undeveloped Kintyre Uranium Mine. In amongst these giants are several other gold and base metal projects such as,
Warrabarty – Carbonate-hosted Zinc-Lead
Woodie Woodie – Mn
Magnum – Gold-Copper–Silver-tungsten (Antipa Minerals, ASX: AZY)
Goosewacker – Lead-Zinc-Copper vein deposit
Maroochydore – Disseminated Copper
O’Callaghans – Tungsten
Rainbow – Stratiform Copper
Moses Chair – Pb-Zn
Grevillea – Massive pyrite.
Citadel – Cu
Finch – Cu
These are only the more significant and notable names. There are numerous projects which have had decent discoveries, but due to a lack of infrastructure and the higher cost of exploration and development, not many have advanced. The O’Callaghans Tungsten project is a good example. It is one of the most massive known Tungsten project outside of China and yet, it is relatively unknown as it is 300m below the surface and has little chance of being developed at today’s Tungsten price.
The projects that define The Paterson Range.
Telfer Copper and Gold Mine.
The Telfer operations are approximately 400km east-south-east from Port Headland and 1,900km north-east from Perth.
Newmont Mining first made a claim to the deposit in 1972. However this claim is disputed by Jean-Paul Turcaud to this date. Turcaud claims he found the Telfer deposit two years before Newcrest did. In the early 1980s, Turcaud reached a settlement, accepting $25,000 from Newmont’s head office in New York City but continued his claim, demanding a Royal Commission. Turcaud continues to sign posts on Global warming to newspapers as the Discoverer of the Telfer and Nifty Mine. The official story of the discovery states that the deposit was found by Day Dawn Minerals, a small exploration company, who did not stake a claim either. One of the company’s geologists, a man called Ronnie Thomson, then moved on to work for Newmont, in which position he informed David Tyrwhitt, then exploration manager for the company in Western Australia, about the promising gold samples that had been found. Newmont paid Day Dawn $15,000 for the maps of the deposit and Tyrwhitt staked out the claim in May 1972
Despite more than 30 years of exploration, the Telfer deposit remains the only significant gold deposit in the province. Copper and gold are hosted by veins and stockworks that are concordant in the upper parts of the mine, but crosscutting at depth.
Currently, Telfer has the following facts on the mine,
2.4Moz of Gold Ore Reserves
8.2Moz of Gold Mineral Resource
0.21mt of Copper Ore Reserves
0.66mt of Copper Mineral Resources
Nifty Copper Mine
The mine is approximately 450km east of Port Headland, Western Australia. Currently, the Nifty mine is owned by Metals X (ASX: MLX). It has a resource of 21.10Mt @ 1.73% Ni and 539Kt of Copper.
The deposit was discovered by Western Mining Limited (WMC, now acquired by BHP Limited) in the early 1980s. WMC developed a conceptual model for the exploration of sediment-hosted stratiform copper deposits. Regional fieldwork uncovered coarse-grained sandstone source and laminated dolomitic siltstone and pyritic shales as host
In the 1970s, work began with geophysical and geochemical field work with the discovery coming in the early 1980s. Geophysical work highlighted a Pb-Zn-Cu target in the western part of the Yeneena basin. Mapping and lag sampling confirmed the presence of the anomaly and subsequent drilling uncovered the secondary ore body. Discovery occurred in may 1982. Mining began in 1992.
Interestingly, the Nifty copper deposit is not the most significant copper orebody. It is the only one mined. The most substantial copper ore body is the Maroochydore disseminated copper deposit.
Kintyre Uranium Project.
The Kintyre uranium project is 60 km south of the Telfer gold mine and 260 km northeast of Newman at the western edge of the Great Sandy Desert in the East Pilbara region of Western Australia. CRA Exploration (now Rio Tinto) first discovered the Kintyre deposit in Western Australia in 1985. Cameco bought the project in 2008 from Rio Tinto in a 70% joint venture with Mitsubishi for US$495M in July 2008. In July 2012, Cameco announced that the deposit was not economical at current market conditions, stating it required a $67 per pound uranium price. (GSWA Report 97)
Maroochydore Copper Project
The Maroochydore copper Project is at the western margin of the Great Sandy Desert approximately 100km south-east of the Nifty copper mine (Nifty), 100km south of the Telfer gold mine and some 450km south-east of the Port Hedland concentrate loading facility. Metals X Limited currently owns it. The prospect as 486,000T of Cu metal @1%Cu and 19,000T of Co metal @ 380ppm Co.
The 2012 drilling programme, comprising 33 drill holes for 14,971 metres of pre-collared diamond drilling, commenced at the end of April 2012 and was completed in October. Drilling was undertaken over a 5km strike length and included 10,602 metres of diamond drilling at an average hole depth of approximately 453 metres. Stratabound copper sulphide mineralisation of low to medium grade tenor was located in almost all holes and was locally upgraded to narrow high-grade lenses in highly deformed and strongly brecciated folded and faulted structural traps.
Note: I have forgotten where I got the above information. I know that information did not come out of my brain. I tried to source the info but in, my untidy manner, I cannot remember. It has been a busy weekend.
What is the Issue?
Like always, the investment world flock to low hanging fruits or perceived low hanging fruits. Funding for companies is hard to find when you want to explore in “frontiers” such as at the Paterson range. As I mentioned earlier, the lack of infrastructure for working in this region is a big negative.
I remembered in 2009 when I was scouting for projects before listing my previous company, I looked at a project in the Paterson Range. I liked the potential and the upside. No one was spending money in the region. I loved the fact that no one was looking to do things in the Paterson Range. I had a discussion with the vendor, and he mentioned that it would be an expensive journey and being a small company, he advised that I look elsewhere. Reluctantly I agreed, and it made good sense at that time.
Many people would have done the same. Driving over dunes and getting your drill company to do that would be an expensive exercise. As one associate said to me recently, one dune looks the same as another.
Why is the place so mineralised?
According to the Geological Survey, there are 130 mineral occurrences recorded. In my opinion, the proximity of these vast deposits indicates to me that the system source has to be of a significant size. The Proterozoic Paterson Orogen has always been known to have the potential to be bigger than the existence of those three world-class deposits (Figure 6). In early 2000, a company announced the discovery of micro diamonds. Twenty micro diamonds and other indicator minerals were found during exploration. Regarding geology, this will imply that the mineral-rich mantle source is surfacing into the Paterson Range.
In terms of a Proterozoic Orogen (for those who are not geologists, the Proterozoic word describes a period in geological timeline. A quick google search will explain it), there are a lot of significant deposits. It is one of the most mineralised geological time producing recent discoveries such as the Tropicana Gold Mine (7.9M oz) and the large Nova Nickel-Copper deposit (10MT).
Like all the mineralised fields in Australia, the Paterson Range is only under-explored due to the harshness of the region and the thick cover that exist in most parts of the Paterson Orgen.
Regarding structure, the GSA (Geoscience Australia) has made studies that are implying the structures underlying the placement of the Paterson Orogen is deep-seated crustal related. I don’t think the geological fraternity is arguing against that observation as this is why geoscientist always liked the Paterson Orogen. If you look at the continent of Australia, thanks to its age, the land is oozing minerals out wherever the land allows this mineral-rich system to surface.
So what’s the fuss all about?
I only started noticing the fuss after a friend ( the one who had the wisdom to tell me that one dune looks the same as another), sent me the announcement from Greatland Gold PLC. It was the results from their first drilling program.
HAD001 came back with 121m @ 2.93g/t Au and 0.23% Cu. It was deep down the hole, from 497m to 618m. Now the intersection was impressive, but I thought that the intersection was deep down. As usual, google searching started, and I started to see some news that Rio Tinto may have found something big also, but there was no news about that in the public domain.
HAD003 came back with 21m @ 3.78g/t and 0.44% Cu and HAD002 was less significant with 1m @ 5.9g/t with 0.24% and 2m @ 5.44g/t.
Greatland believes that they may have an IOCG (Iron Oxide Copper Gold Ore Deposits) on their hands although some proponents in the area think that this could be a variation of a VMS. Whatever this may turn out to be, all I feel is that there is something substantial.
The discovery by Greatland is exciting, and they seem to have raised funds to continue. It is probably a good time to be doing all these kind of deep drilling as the market is not at it as high as in 2007/2008. Drilling costs are not prohibitive, and there are now some government incentives that subsidise this kind of “frontier” work.
There are a lot of players in Australia involved, but one of the more interesting ones is Artemis Resources Limited (ASX: ARV). The information from their releases is fascinating.
The company made an announcement recently highlighting that they have raised more money and they will start exploration work. Now I get that they have the tenement adjacent to Greatland gold. The regular nearology play. However, have a look at Figure 4, and Figure 5 was released with their announcement.
Look at the structure, the line leading north into the Armada Prospect. Remember that Figure 4 is from coarse magnetic data (400m spacing). There is one going north and another primary structure heading in an SW direction into Armada. Now if Havieron is something big, I think Armada has got a lot of chance of turning into something significant as well. Look at the smaller structures in an east-west nature, and if they cut these primary structures, then you are going to get some action. Remember the pure theory. Liquids come spurting out at the point of least resistance. The point where these lineaments/structures meet will be what we call an extensional point and a point of pressure release.
All these assumptions are assumptions only and will be fact if and when they drill those points. I would suspect that when they get their act together and start doing more detailed geophysics, things will become clearer for the better or the worst… 🙂
Figure 5 has more structures shown and at this stage who knows what may be in store within Armada. As a punter in this industry for a long time, I like simple fundamental things. We are dealing with the possibility of one or several elephant type discoveries. I wanted to highlight in Figure 2 and Figure 6 the proximity of all those world-class deposits. They are all within 100km from each other. I cannot make this any clearer that the discovery is building a significant statement.
The other player in the Paterson Range rush is Antipa Minerals Limited. As I mentioned, I came very late into the scenario of “who has what?” and “what is the prospects?”. And because of these unknown factors, I was surprised to see what Antipa had in their tenements. Remember that Antipa is the company who has the JV with Rio Tinto, and they could be on the verge of a big payday. With Rio doing lots of things in their tenement and giving everyone heartburn waiting in anticipation for news, the punters are taking positions.
The best place to have a look at their project is n their website. Their share price has taken a great leap in late October from about 1.3c to a high of 3.7c in late November. However, if you look at their share price over three years, you will notice a long period of no action (Figure 7).
I am not sure if shareholders are happy or not, but I have been in those prolonged short-term punts that last longer than its definition, and I will say, I was not singing for joy.
Looking at the three-year chart, you would think that the last two years were pretty dull. I am not sure what is the driver for the recent rise in October 2018 as I am not intimate with the going on of the company. However, if you look at Figure 7a, the journey from the Rio Tinto JV announcement till now will be very disappointing for punters (unless you sold out on the run to 6.6c). A market capitalisation of AUD$51M appears to be high, but I would think that a discovery of the nature we have been discussing would make this company cheap at this stage.
What I am understanding is why its share price has not moved with the amount of “assets” that one can see it its tenements.
All the smoke that is in their tenements is proof that there is a lot of mineralisation happening and the source is very productive. This character is consistent with the other mineral-rich provinces such as the Norseman-Wiluna Belt, the Murchison, the Hamersley, the Albany-Fraser Belt, Yamana Belt, The Arunta Block, Mount Isa, Ballarat…etc. There are multiple big projects mixed among the numerous smaller projects.
The other players in the Paterson Range Rush.
Looking at Figure 8, you can look at why I am very upbeat on this whole scenario. When I started researching the region, I was taken back at the prospect of this area. I knew that there was Telfer, O’Callaghans (Tungsten), Nifty and Kintyre but I did not know about the rest.
Conclusion
I am not saying that Artemis is going to have the elephant nor am I saying that Greatland has the elephant. For all we know, the elephant may never exist at this stage. Maybe the elephant is with Rio Tinto. What I do know is that with the news that is coming out of Greatland and the inference you would make as a geologist, the prospect of having kilometres of a massive structure going through your tenement is exciting for Artemis.
Time will tell what the real story is. In my opinion, the game is between Greatland Gold, Artemis, Antipa and Rio Tinto. In a time when our technological advances in exploration are much better than 20 years ago, I think the time for a real discovery in the Paterson Range is not far away. The Proterozoic Paterson Orogen will uncover a few more world-class mines if not at least one.
To add an outsider tip, Fortescue Metals Group who have some tenements in the area may surprise the market. I say this because this is a game for deep pockets and they have deep pockets.
Companies like Artemis may have the best opportunity, but if they cannot continue to tap the market for money, they may indeed exit this game sooner than they wish. The recent raise that they made undoubtedly is taking the company in the correct direction.
Many industry experts have said over the recent years; exploration will be the most critical component of all major miners. It will be expensive as all the low hanging fruits are taken. The research will need higher technological advancements. Exploration will be riskier than before, but if you do it correctly, it may be more rewarding. The rewards will be more substantial as it will be discovered in a place nobody had been before.
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