A Case for CHK - A brief history of Olympic Dam and Oak Dam West

Way back in the 1970’s It took 2 years and 10 drill holes at Olympic Dam before drill hole RD10 uncovered an economic intersection of 145m at 2.2% copper.

https://portal.clubrunner.ca/2901/Stories/the-discovery-of-the-olympic-dam-deposit

It was this hole that would prove the catalyst for a significant increase in drilling activity in order to define the resource that would become a tier 1 deposit with a trillion dollars of in-ground resource.

At Oak Dam West AD4 was actually drilled way back in 1981 by WMC and found the following:

“AD4 was drilled on a small gravity anomaly flanking the large Arcoona Structure anomaly. Basement was reached at 727 m depth, and down to the hole's TD of 1254 m, it comprised interbedded haematitic siltstone and haematite breccias that appeared to WMC to be very similar to lithologies in the ironstone 'core' block at Olympic Dam. These dense rocks do not contain visible copper mineralisation, but are anomalous in uranium.”

https://sarigbasis.pir.sa.gov.au/WebtopEw/ws/samref/sarig1/wci/Record?w=catno=2035396&m=1&rpp=1

It appears they were unlucky in that they drilled the ‘core’ didn’t get any mineralisation hits. However fast forward to 2018 and BHP have discovered the mineral deposit associated with this core by drilling further out from the centre of the anomaly.

With a cover depth more than twice that at Olympic Dam (350m cover at Olympic Dam vs min 700m at Oak Dam West) the intersections needed to be very good to justify additional follow up work. Luckily they were with the key drill holes AD-23 intersecting 425.7meters at 3.04% CU from 1063m and AD-23 inc. 180m at 6.07% CU from 1070m.

Comparing this with Olympic Dam boggles the mind. The main issue being the additional depth seems to be offset by the length of the strike and the grade. It obviously stacked up as BHP have now drilled 10 more holes mirroring the activity seen after the RD10 hole at Olympic Dam.

There are a couple of very interesting things to note that may well be in CHK’s favour. Firstly the gravity anomaly is definitely pointing strongly in our direction and from my analysis crosses into CHK territory as follows:

note: I've crossed referenced a number of data points to determine the exact location and believe this is fairly accurate but please DYOR.

As Wikipedia is so nice to point out

"More qualitatively, the "edges" of a gravity body are considered more prospective as this theoretically represents the mineralised margins of an intrusive body.”

https://en.wikipedia.org/wiki/Iron_oxide_copper_gold_ore_deposits

Secondly and possibly just as important the amount of cover (depth to basement) on CHK’s tenement looks to be less than the amount of cover BHP have to drill through.

Both of these factors could well be important considerations when working out the viability / profitability of any future mine and where you may want to commence mining initially to reduce CAPEX.

While I agree that the horse well prospect in itself looks very appealing I think the main game here for CHK could well be Oak Dam West.