After a busy 2015 of scout drilling, collaborative research and scientific exploration, Investigator Resources (ASX:IVR) is planning an ambitious drill campaign for the coming year at its highly prospective Gawler Craton properties in South Australia.
Investigator’s 2016 priorities are converting the Paris resource to indicated status and pursuing development studies in the area.
This will add momentum to a recent 60% increase in Paris' resource base to 8.8 million tonnes at 116 g/t silver for 33 million ounces of contained silver.
Proposed drilling in 2016 will focus largely on the Nankivel Hill area adjacent to Paris, where porphyry copper targets have been identified on a high sulphidation alunite pyrophyillite shoulder in a base of volcanics.
The Paris-Nankivel mineral system benefits from a strong similarity to the standard model for porphyry deposits.
It is within an emerging geological corridor that connects giant IOCG and Uno Province projects including the Olympic Dam operation, the Prominent Hill mine and the Carrapateena project.
Investigator plans for this area include development work at the “Bajo el Nankivel” magnetic target, which is considered a possible potassic magnetite core to a porphyry copper occurrence.
The nearby Helen copper-gold-silver skarn has also been confirmed as a soil copper target.
Broad intervals of anomalous zinc, lead or copper have been recorded at the Nankivel West, Helen West and Peterlumbo Hill areas, one intersection returning 12 metres at 1.28% zinc, 3 metres at 0.81% lead and 9 metres at 0.07% copper.
The Diomedes prospect has also been flagged as a basement nickel opportunity after petrology work identifies widespread metamorphosed ultramafic host with disseminated fresh iron, copper and probable nickel sulphides
Investigator is assessing how to explore and drill this large area for nickel.
Meanwhile, only a modest drill program is expected to be necessary to convert Paris resources from the inferred to indicated category.
A heritage survey is underway to gain drill access for new priority copper targets at Nankivel while the majority of nickel targets are already cleared.
Recent progress
Investigator's 2016 ambitions in the Gawler Craton will build on a string of successes in the region, especially at Paris, where the recently updated resource represented both a major increase over the tonnages of the maiden resource (20 million ounces of silver) and a slight improvement in the robust maiden grade estimate of 110 g/t silver.
Importantly, this reinforces confidence in the project’s potential to support a large, open pit mine with a more economic operating model thanks to the shallowness and high grade of the deposit.
The size of Paris could more generally be an indication that the surrounding region is significantly mineralised with economically viable silver.
This view helps underpin Investigator's 2016 drilling plans and is supported by the fact that recent exploration of Paris-style lead systems in the area has delivered intersections grading up to 91.9 g/t silver.
The larger silver resource also provides a stronger platform for leading a varied output of precious and base metals at the site.
Polymetallic strategy
Development of base metal growing potential in the broader Paris project area will therefore be supported by the project’s standout silver resource.
This strategy benefits from some encouraging macro developments in the silver space that could allow Investigator to take advantage of the precious metal’s safe haven insurance value as it develops nickel and copper prospects in more volatile markets.
Although Comex silver is currently trading at circa US$14.10 an ounce – compared to a mid-May peak of nearly US$18 an ounce – a favourable exchange rate for the Australian dollar is reflecting some opportunities for the few local operators in this sector.
While a plethora of North American silver explorers contends with this relatively depressed US-dollar price range, ASX plays such as Investigator are benefiting from a AUD/USD ratio of 0.73, which supports a current Australian silver price of A$19.44 an ounce.
This context puts Investigator in a stronger position to exploit improving sentiment for silver as investors absorb its emerging status as a metal evenly split between the sectors of safe haven wealth storage and high-tech innovation.
As new technological applications become increasingly marketable, silver is realising unmatched versatility as both a gold-style safe haven investment and a strategic niche material in the same vein as rare earths, graphite or lithium.
Analysis
Investigator's exploration and resource upgrade plans for 2016 represent a number of possible price catalysts for the company's stock.
Upgrade of the Paris silver resource to indicated status, in particular, will be a meaningful advancement for the project.
Meanwhile, the recent 60% increase in Paris silver resources at an even higher average grade bodes well for the development of operational flowsheets and more ambitious mine designs in the future..
A heritage survey is already underway to gain drill access for new priority copper targets at the project’s Nankivel West area and the majority of nickel targets are already cleared.
The larger silver resource also benefits from a macro warming of sentiment for the white metal, which is emerging as a commodity evenly split between the sectors of safe haven wealth storage and high-tech innovation as local operators enjoy a favourable exchange rate for the Australian dollar.
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