Alien Metals (UFO.L) this morning revealed encouraging results from on the ground due diligence work being undertaken on two potential new projects over iron ore prospective areas in the Pilbara region of Western Australia.
A total of 17 rock samples were analysed over the Hancock Ranges and Brockman Iron projects. The fieldwork results revealed that 7 of the 17 rock samples returned from the independent laboratory analysis showed readings of over 60% iron ore, indicating “direct shipping ore quality” potential, as Alien Metals Technical Director Bill Brodie Good pointed out in the announcement.
Comment and Recommendation.
As today’s results eluded, Alien Metals appears to be moving towards exercising its option to acquire 51% of the two projects, the details of which were first announced in late September. Assuming no further extension to its option agreement, we would expect a final decision and announcement to be made very soon, and by no later than 18th November.
A perusal of the map shown on Fig 1 in the RNS, shows the projects are clearly in a target rich area, given that they are surrounded by major iron-ore deposits or mines, along with infrastructure, which includes blue chip international mining majors BHP Billiton and Rio Tinto, along with Australian iron ore producers Fortescue Metals Group and Hancock Prospecting Pty Ltd.
In our opinion, one of the key highlights from today, is the high grades obtained from three samples on the ‘Sirius Extension’ prospect in the ‘Hancock Ranges’ project. The prospect is on strike with Brockman Mining’s Sirius deposit, upon which a JORC resource of 124mt tonnes at 60.32% iron ore is defined, 85% of which is delineated in the ‘Indicated’ category. Drilling work undertaken by Volta Mining Limited in 2013 confirmed an economic strike extension to the Sirius deposit, and two areas of potential high-grade iron ore mineralisation at both the ‘Sirius Extension’ and ‘Kalgan’ prospects.
Along with the impending prospect of news-flow from a project decision in Western Australia, we also await further exploration results from Alien’s extensive portfolio of silver and gold prospective projects in Mexico, and possible news of JV deals.
The current modest market cap of around £2m does not reflect the expanding story and target rich environment of these licences, which are now a lot nearer to becoming Alien Metal flagship projects. To this end, we recommend the shares as a ‘Buy’ @FirstEquityLtd
RNS: Site visits confirm DSO iron ore potential up to 65% Fe at Hancock Ranges and Brockman projects
Alien Metals Limited, the AIM quoted mineral exploration and development company, is pleased to provide shareholders with an update following the recent site visit undertaken by its technical consultants as part of the due diligence on the Hancock Ranges and Brockman iron ore projects. The Company has an exclusive option to acquire 51% of these projects and the site visit has formed part of the due diligence by Alien (see the Company’s announcement dated 20 September 2019 for further information on these projects and the option).
- Independent laboratory analysis of 17 rock chip samples taken from both tenements has highlighted the high-grade direct shipping ore (DSO) potential
- Results suggest that both projects potentially host iron ore mineralisation comparable to that being mined by the major operating companies in the region. High-grade assay results include:
- Sirius Extension prospect: 64.2% Fe
- Kalgan prospect: 63.9% Fe
- BHP 20 prospect: 60.3% Fe
- BHP 19 prospect: 65.4% Fe
- The site visit confirmed the locations of the 2013/14 Volta Mining RC drill hole collars and the interpreted mineralised zones suggested to be within the Hancock Ranges project area
- The site visit also confirmed excellent potential of the Kalgan prospect in the Hancock Ranges project to host significant tonnages of DSO grade iron ore
- Initial geological mapping and sampling of the historic BHP 20 deposit on the periphery of the Brockman project indicates that the mineralisation extends onto the project tenement
- Option period mutually extended by 15 days, to 18 November 2019
Technical Director of Alien Metals, Bill Brodie Good, commented that “the initial assay results and geological information from the technical due diligence field trip are highly encouraging. Of the 17 samples taken across the two projects, numerous assays returned greater than 60%+ Fe, which is direct shipping ore quality, and the brief geological mapping carried out further enhanced the perceived potential of both projects. The assay results corroborate sampling and drilling undertaken by Volta Mining in 2014 at the Hancock Ranges project, and also the significant potential at the Brockman Iron project, where major iron ore companies are drilling on adjacent tenements.”
The location of the Brockman Iron and Hancock Ranges tenements are set out in figure 1:
Independent assay results
A total of 17 iron ore rock chip samples were taken in the course of the due diligence field work. These samples were initially analysed in the field by a portable X-ray fluorescence device (“PXRF”) followed by full analysis by Li Borate fusion/XRF analysis at the independent Intertek Genalysis laboratory, Perth, Western Australia.
A full table of the assay results is included below.
The geological due diligence carried out along with the supporting assay results confirm the presence of high-grade DSO material within all project targets, identifying areas for follow-up exploration.
Site visit summary
Brockman Iron Project(E47/3953)
The BHP20 Deposit appears to be many metres thick in slope exposure, a couple of hundred metres in width, and to dip gently 20 degrees to the north and to plunge gently towards 240 degrees. It therefore plunges NW across the body of E47/3953, beneath which it could potentially continue at accessible depths.
Photographs of the iron ore outcrop and sample sites for P592810 and P592812 “BHP20 deposit” at the Brockman Iron Project are set out in figures 2 and 3:
The locations of samples with assay results taken in October 2019 at the BHP20 prospect, Brockman Project, are set out in figure 4:
The BHP19 Deposit is located in the far SW corner of E47/3953, and it dips and plunges to the NW, out of the lease, into the adjoining Fortescue Mining Group (FMG) ground. FMG have an active grid drilling programme on the adjacent ground, exploring the NW continuation of the BHP19 Deposit and also what appears to be a considerable deposit of derived detrital iron formation deposited on its immediate southwest side.
The locations of samples with assay results taken in October 2019 at the BHP19 prospect, Brockman Project, are set out in figure 5:
Hancock Ranges Project (E47/3954)
At the Sirius Extension prospect, the drill collars from RC drilling undertaken by Volta Mining in 2014 were located during the site visit. One of these holes (Hole 14SERC004) returned 126m @ 60.28% Fe from surface.
From the site visit, additional parallel fold/fault-repeated outcrops of similar iron formation just to the southwest of the historical drilling were also noted. The observed mineralisation is part of the larger Sirius deposit (124Mt at 60.3% Fe) on the adjoining Brockman leases and there does appear to be potential for discovery of nearby additional iron mineralisation within the Sirius Extension prospect.
The locations of samples with assay results taken in October 2019 at the Sirius Extension prospect, Hancock Ranges Project, are set out in figure 6:
From the ground traverse made during this initial site visit over the Kalgan prospect the mineralisation appeared patchily exposed at surface, as sub-crop and rubble, over a significant area, extending perhaps 500m from SSE to NNW and 200m from E to W. Further to an initial photo-geological study as part of the due diligence its expression suggests that it may be controlled by a zone of NW-SE faulting that cuts across the WNW-ESE stratigraphy.
The locations of samples with assay results taken in October 2019 at the Kalgan Prospect, Hancock Ranges Project, are set out in figure 7:
As announced by Alien on 20 September 2019, historic exploration has identified mineralisation at surface in the Kalgan prospect, with Volta Mining reporting eight rock chip samples which returned grades of up to 68.7% Fe in the prospect area. Assay results from Alien’s recent due diligence site visit confirm these high-grade results, with assay results for the three Kalgan samples returning grades up to 63.9% Fe.
The site visit and independent laboratory results has reaffirmed the Company’s views on the exploration potential of both of the Windfield projects. Following the receipt of the complete due diligence report, the Company will be in a position to make a decision on proceeding with the 51% project acquisition. In conjunction with the Company’s technical consultants, the Board will design a field program to follow up the most prospective DSO areas to get a better understanding of the potential extent of mineralisation.
Table 1: Assay results, site visit samples, Hancock Ranges and Brockman Projects, October 2019
|Sample Nbr||Tenement||Prospect||Fe (%)||Al (%)||Si (%)||P (%)|
|P592801||Hancock Ranges||Sirius Extension||62.54||1.46||1.33||0.21|
|P592802||Hancock Ranges||Sirius Extension||58.41||1.5||1.38||0.08|
|P592803||Hancock Ranges||Sirius Extension||64.16||0.49||1.32||0.13|
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.
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