Duke Exploration Ltd (ASX:DEX) has been highlighted by Morgans as a company with undervalued assets with great prospectivity, especially considering the potential scale of the Bundarra intrusive deposit.
Duke listed on the ASX in November 2020, with a focus on exploring the Mt Flora copper-gold-silver prospect within the greater Bundarra flagship project.
The company now holds a portfolio of potential copper, silver and gold assets, including the Duania Waitara, Prairie Creek and Red Hill projects.
The following is an edited excerpt of Morgan’s research coverage on Duke Exploration and its assets.
Project highlights
Mt Flora
Duke Exploration first focused on drilling the Mt Flora copper-gold-silver prospect post-float, and delivered a maiden resource of 16 million tonnes at 0.5% copper with silver credits, containing 78,000 tonnes of copper and 3.6 million ounces of silver, at a 0.2% copper cut-off.
Mt Flora is the most advanced prospect of the 50-plus prospects around the Bundarra Granite intrusion, although the largest anomaly from the geological, geochemical, and geophysical work completed by DEX is at Quorn.
While the reported copper grade is 0.5% at Mt Flora, adding the silver as an 'equivalent' copper grade lifts the 'copper equivalent' grade to above 0.55%.
Given the location and local infrastructure, likely metallurgy, and the geometry of the deposit, Morgans’ expectation is that this initial resource would contribute to a mining operation should one be developed.
Greater Bundarra Project
Diamond drilling resumed this week at the Rogers prospect area. This is the third hole of a campaign of five holes – one at Quorn, one at Isens and three within the Rogers area.
Quorn and Isens holes are completed with mineralisation intersected as has been reported previously.
Assays from these holes are due mid-February assuming no delays. The first hole of the three planned at Rogers is almost complete and the rig will then move on to the 4th and 5th holes (2nd and 3rd at Rogers).
The first hole into Rogers was a success, intersecting several chalcopyrite dominated sulphide veins downhole, including two metres of chalcopyrite – pyrite – magnetite veining from 102 metres.
The campaign is planned to be completed by early/mid-February and the assay results will follow, after about six weeks, assuming no delays.
The diamond drilling rig will continue on to at least two other primary targets of interest in March/April.
Morgans’ view and comment
“DEX reported a maiden resource after six months of drilling. This was a high level of execution,” says Morgans.
“Our expectation is that the ongoing drilling at Mt Flora and the adjacent Quarry deposit will increase this resource, but more significantly drilling at the Quorn, Absolon, Rogers and Isens prospects will add to this maiden resource.
“A number of other old workings are yet to be worked up for drill testing.
“Duke is relatively well-funded to maintain its drilling program at Bundarra and demonstrate the potential of the broader project area to support a copper mine development.
“Sure, we have to wait for the assays, and maybe this drilling won’t deliver the 'eureka moment', but there are enough old workings and prospecting pits around the Bundarra intrusive that I’d expect them to get the scale for a development – say 300,000 tonnes of contained copper, roughly three times the size of Mt Flora.
“Work has been halted over the Christmas/New Year period, and with typically seasonal rainfall.”