Apollo Minerals (ASX: AON) has agreed on exploration farm-in terms with Marmota Energy (ASX: MEU) to acquire a tenement with historic gold/iron intercepts in the highly prospective Gawler Craton of South Australia.
The agreement relates to Marmota’s 48 square kilometre Aurora Tank tenement EL4433, which is located immediately north of Apollo’s Ibis and Mars Prospects.
Dominic Tisdell, chief operating officer and executive director for Apollo, told Proactive Investors today that he considers Aurora Tank to be as equally prospective as the Ibis and Mars prospects.
Historic highlights from the Mars / Aurora Tank Prospect include precious metal intersections such as:
- 4 metres at 2.0 g/t gold from 112 metres;
- 4 metres at 1.3 g/t gold from 24 metres;
- 4 metres at 1.2 g/t gold from 56 metres; and
- 20 metres at 0.5 g/t gold from 116 metres, including 4 metres at 1.6g/t gold.
Adding further interest are near surface historic iron intersections, such as:
- 84 metres at 29.8% iron from 12 metres; and
- 60 metres at 28.3% iron from 24 metres, including 28 metres at 35.0% iron.
Importantly for Apollo, the Aurora Tank tenement is a natural fit and further enhances the company's portfolio and position in the region.
This is particularly true for Apollo’s Commonwealth Hill Iron as well as the Titan Base and Precious Metals projects that are located within an exceptionally prospective part of the Gawler Craton and are adjacent to Aurora Tank.
Apollo's tenements are around 100 kilometres from Oz Minerals' (ASX: OZL) Prominent Hill, and around 200 kilometres from BHP Billiton's (ASX: BHP) Olympic Dam - and is surrounded by other operating mines and deposits.
Another advantage is the supporting nearby infrastructure, which includes the Trans-Australian Railway - which provides access to ports.
The company’s footprint now covers over 1,400 square kilometres of the highly prospective northern Gawler Craton encompassing a number of regional scale structures, geophysical and geochemical anomalies including iron ore, copper, nickel and gold.
Apollo is actively progressing exploration and development through its Commonwealth Hill Iron and Titan Base-Precious Metals Projects.
Aurora Tank deal and background
Under the agreement, Apollo may earn a 75% interest in Aurora Tank by sole funding the greater of either a minimum of $900,000 of exploration and development activities over a period of up to three years, or all exploration and development costs to the Bankable Feasibility Study stage.
Apollo has committed to a minimum exploration spend of $150,000 on EL4433 during the first year of the farm-in with Marmota.
At the combined Mars-Aurora Tank Prospect, key target zones include a dominant, shallow northeast trending magnetic anomaly which is likely to host significant magnetite mineralisation, and its eastern margin which is defined by a 1,700m long zone of anomalous gold in calcrete.
Historic drill holes RCAT8 and RCAT13 intersected significant gold mineralisation at the end of their respective traverses and Apollo believes this mineralisation remains open in all directions.
The company’s review of the existing data confirms that the Mars-Aurora Tank Prospect shares similar characteristics to the near-by Challenger Gold Mine which is hosted within Archaean units of the Mulgathing Complex.
A strong magnetic feature extends from Apollo’s Mars Prospect into Aurora Tank. This trends north-northeast for a strike length of over 6 kilometres.
Commonwealth Hill
Both Ibis and Mars are part of the Commonwealth Hill project, which contains a number of deposits.
Apollo had earlier this week reached a farm-in agreement to acquire up to 75% over the 624 square kilometre EL4932 from Mincor Resources (ASX: MCR).
Last quarter, Apollo completed the Scoping Study for the Sequoia iron ore deposit at the Commonwealth Hill project in South Australia that demonstrated the potential to support a 17 year mine life at 2.5 million tonnes per annum sales.
The open cut mine life of about 17 years has a projected output of about 2.5 million tonnes per annum, with sales of 42 million tonnes at 68.8% iron at an exceptionally coarse sizing of around P80 150 microns.
Ibis has yet to be drilled by Apollo and has an exploration target of between 200 million and 400 million tonnes at 25% to 35% iron.
Analysis
Today’s deal with Marmota Energy further consolidates Apollo’s position in the highly prospective Gawler Craton, home to world-class operations such as Olympic Dam and Prominent Hill.
The farm-in to the "brownfield" project is significant given the encouraging historical gold and iron intersections. The iron intersections were broad while the gold grades would provide promise for an exploration program.
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