Argent Minerals (ASX:ARD) has achieved a major advancement in outlining the potential for a massive deposit at its West Wyalong copper-gold project in New South Wales by confirming a large drilling target.
Results of a high resolution ground induced polarisation (IP) survey conducted at the project revealed a large, broad area of increased chargeability coincident with a previously defined gravity anomaly measuring 1.4 kilometres by 0.8 kilometres.
The combined magnetic and IP feature, together with the presence of high copper values in nearby drill results, is considered to be prospective for porphyry/epithermal style copper gold mineralisation.
There is the potential for similarities to significant deposits nearby, including that of Evolution Mining’s (ASX:EVN) massive Lake Cowal mine, which holds resources of 5.1 million ounces of gold.
With the target now defined at West Wyalong, a drill test plan is set to be designed.
The geology in this area is considered similar to the terrain at the region’s Northparkes operation, which is capable of producing in excess of 50,000 ounces of gold a year.
Historically, the West Wyalong goldfields produced about 445,700 ounces of gold between 1894 and 1921.
Argent’s tenements in the area lie only 37 kilometres from the Lake Cowal mine.
A sharpened team in a key jurisdiction
Proximity to Cowal, Northparkes and other world-class mines in the region such as Newcrest Mining’s (ASX:NCM) Cadia complex puts Argent in an uncommonly compelling peer group for a junior explorer.
NSW’s Lachlan Orogen is a region with some of the deepest history of mining in Australia, with richly mineralised yet surprisingly underexplored terrains.
The recent breakthrough in exploration technique which revealed the potential at the nearby Kempfield lead-zinc project has meant that Argent has secured a new, highly specific geophysical tool to conduct low-cost delineation of targets in this area.
The effort was supported earlier this month by two key technical appointments expected to provide Argent with access to the latest techniques and analytical facilities for the targeting of high-grade VMS mineralisation.
The technical expansion will include more integrated cooperation from Professor Ross Large of the Centre of Excellence in Ore Deposits (CODES), which is often esteemed as the preeminent authority in VMS deposits in Australia.
This knowhow was added to with the appointment of CODES-trained geologist Todd McGilvray as exploration manager. McGilvray’s credentials include the leadership of the exploration effort that resulted in the discovery of new ore lenses and a new mineralised domain, for an additional 22 million tonnes of high grade base and precious metals at MMG Limited’s (HKEx:1208) Rosebery deposit in Tasmania, extending the mine life to 88 years.
Silver, gold exposure in a diversified portfolio
A busy time in exploration and internal optimisations is improving confidence in Argent, with the company recently flagging preparations for a 3,200-metre diamond drilling program at Kempfield while survey work builds a copper-gold case for West Wyalong – with the potential for an added bonus if the silver price breaks upward.
As drilling gets underway at Kempfield traction in the silver market seem to be setting up the explorer for a share price rerating.
With substantial exposure to the silver sector, Argent has benefited from momentum in the white metal before. Argent shares (last trading at A$0.024 spiked as high as $0.29 in 2011 when the silver price surged to US$50 per ounce.
A low-cost silver-gold heap leach operation at Kempfield – for which an Environmental Impact Statement was submitted to the NSW Government in April 2013 – remains in place as a fast-response, market-ready option, to take advantage of any pricing recovery that may occur in the precious metal space.
Kempfield holds a JORC resource of 52 million ounces of silver equivalent.
The primary goals of the Kempfield campaign, however, are to add tonnes of high-grade lead-zinc mineralisation, improving potential of feeder zones and multiple volcanogenic massive sulphide (VMS) lenses.
Argent has previously identified some of the rich combined lead-zinc grades of up to 17.9% at the site – amongst the highest grades in Australia.
These were immediately to the west of the existing resource, as well as the potential for multiple additional VMS lenses and a feeder zone.
Whilst the company has established an initial goal of discovering an additional 5 million tonnes at Kempfield with higher grade lead-zinc, silver, gold and potentially, copper, the potential for a much larger system and associated world-class discovery has been identified.
Successful exploration of this opportunity will be a game-changer with company-maker potential for Argent.
Analysis
The survey indications of a large porphyry/epithermal style mineralisation target at West Wyalong represent a major step forward in confidence and practical development of the project. Upside for the project is further enhanced by its proximity and similarity to world-class deposits including the Lake Cowal mine (5.1 million ounces) only 37 kilometres away.
That IP chargeability results correspond closely with a previously defined magnetic anomaly reinforces the validity of a substantial size target that merits further investigation
Development of Kempfield’s demonstrated multi-mineral potential with the guiding hand of experienced new leadership could result in a defining, game-changer moment in Argent’s history.
Argent’s exposure to zinc, copper, gold and silver simultaneously benefits from the safe haven aspects of precious metals and a substantial market presence in strategic, high-tech applications.
As the tech applications of gold remain such a small minority of its commercial potential, silver is perhaps the only metal with this marketing versatility.
Recent growth in silver mine production seems set to unravel since much of the output has come as by-product streams from struggling base metal operations. Multi-metal companies with a stronger focus on silver, such as Argent, may therefor benefit from a pinch in the precious metal’s supply-demand dynamic.
Argent’s developments have also been strategically timed to coincide with market forecasts of a worldwide shortage of zinc and significant zinc price increases on the London Metals Exchange.
In 2005, the price of zinc surged to more than $US4,000/t in response to LME stocks falling to similar levels in place today.
A major zinc producer, the Century mine in QLD, has officially stopped mining, to now run out the stockpiles with the last of its processing, leaving a gap in the market of approximately 500,000 tonnes per year.
The company’s portfolio is in a region which already hosts a number of large, highly profitable operations, including the largest underground copper-gold mines in the southern hemisphere.
Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.