Junior explorer Silver Swan Group is ready to take flight after excellent drill results from its Austin polymetallic prospects in the Murchison belt of Western Australia.The company reported in June that substantial new copper and zinc zones had been intersected in a diamond core drilling program, including a 61m intersection of 1.9% copper from a depth of 58m downhole. Silver Swan Group managing director Dr Susan Vearncombe said the first hole in the latest program was probably the best to date. “We have been concentrating our efforts at Austin, a volcanogenic massive sulfide system, but we now have the financing to give attention to several other anomalies in the Quinns area,” she told RESOURCESTOCKS. “We have also made plans for a fairly substantial drilling program at Yagahong to develop the mineralisation at Copper Hills, where we drilled successfully last year. “It is a quite different mineralised system [syntectonic Cu-Au] to Austin. We have verified that mineralisation continues to depth from surface and we know exactly the horizon it is hosted in. The mineralised shear zone extends for about three kilometres.”
Initially it was uncertain whether the mineralisation was magmatic or syntectonic, but the company now has the answer. Structural information indicates a steeply dipping zone of sheared gabbro that anastomoses along strike. With further reverse circulation and diamond drilling along the shear zone, Silver Swan could then be in a position to move to a resource stage.
Silver Swan is now ready to extend its exploration of the Austin fold following a successful capital raising of $A7 million through sophisticated and institutional investors, plus an additional $1 million through the exercise of options at 20c. Vearncombe said the capital raising gave Silver Swan the financial resources to continue to fund the successful exploration program at its Meekatharra tenements, focusing on Austin and Copper Hills as well as the Quinns area.
The plan is to take the exploration program five or six stages in one move, working on the basis that it is more efficient and economic to tackle the drilling program in one go rather than stop and start with funding increments on an ad hoc basis. A major factor in favour of the discovery at Austin is that the mineralisation is shallow, about 50m below the surface, and the transported material that sits above it could be easily removed. The cover is mostly transported material, some regolith with a few metres of gossan, then straight into primary sulfide – importantly, without the oxide ore that can pose difficulties with processing.
Vearncombe described the Austin prospect as a “genuine blind discovery”. “We do have much higher copper grades within the large intersections up to nine per cent, so potentially these copper grades could increase and push the overall grade up. “This isn’t all coming out of just one hole, we’ve got a whole series of intersections where this material is quite massive, quite solid. It’s not Rats and Mice stuff.”
The company has been stricter in its reporting of results than perhaps would normally be expected for base metals and there are areas of low-grade mineralisation within the system that will add to tonnes. Vearncombe said they were getting a lot of information from the structural work that had been done and the model they had developed was a series of subfolds on a much larger folding structure. It has quite consistent steep north dips to the mineralisation and a northeast plunge, the latter being “the linear zone on which this is really moving”, she explained. “We have intersected the plunge extension and predicted another fold underneath the second bullseye anomaly that we recently discovered with our detailed aeromagnetics and it sits 120 metres to the north.”
One of the surprising historical facts of the area was that CRA had previously explored it and had put down seven diamond drillholes, but had narrowly missed the system. Vearncombe said the difference between CRA ’s failure and Silver Swan’s success was that it had drilled 90 degrees to the way CRA had drilled. She explained that CRA was terribly unlucky and that Silver Swan had had the benefit of technology advancements since 1991. “We carried out some quite detailed fixed-loop EM [electromagnetics] and got a conductor that was modelled about 120 metres down,” she said. “There can be quite a big error with geophysical conductors so we actually did two loops instead of one – so that if there was something there, we could get a much better handle on which way it was striking and dipping.”
Another factor in comparing the two drill programs is that CRA drilled from west to east and Silver Swan initially came in from the south, across one of the holes where CRA had struck some low-grade mineralisation, and continued to hit the conductor. The hit was a good one, 60m downhole with a 133m intersection, from Silver Swan’s first drillhole into Quinns, but the good fortune didn’t stop there. The first hole at Yagahong struck copper-gold mineralisation on a quite different type of mineralised system.
Vearncombe said the company had enjoyed an extremely high strike rate, but at this stage it believed it was too early to move into a resource estimate. She said that while they had intersected good copper grades, the company was confident it would hit higher zinc grades in the future
Drilling suggests the copper and zinc are at a slight angle to one another as the deposit is deformed, which could mean the sulfides have moved around. “We haven’t done any detailed metallurgy yet. At this stage, analysis shows that there is very little lead in the system, and gold and silver kicks up quite significantly with the copper mineralisation,” Vearncombe explained. “What we think from our latest results is that there is a possibility we will see successive zones of mineralisation as we step out as well as going down. “There’s still quite a long way to go, but it’s pretty exciting and for a company that’s really only a year old, it’s a fantastic start.”
With the target areas all within easy reach of each other, production could either be satisfied by having a mill at one site with transport of feed a maximum of 20-30km from other sites. The township of Meekatharra is only about 55km away, offering a sealed airstrip, accommodation and a range of services. Vearncombe admitted it would have been even better if the bottom hadn’t dropped out of the market and that this had held progress up, but like a number of other Australian resource companies, Silver Swan had still received expressions of interest from Chinese groups as well as a few joint venture offers. However, at this stage the company is more intent on getting a better idea of the size of the project. The only thing likely to slow down Silver Swan’s progress at its Murchison prospects in the near term will be the summer heat.
DIRECTORS Michael Elias, Susan Vearncombe, James Harris, Paul Trettel.
MARKET CAPITALISATION $A20 million
MAJOR SHAREHOLDERS Mercator Gold plc 18.9% City West Corp 11.8% Vitor Pty Ltd 5.7% Windsong 5.4%
SWN Price at posting:
37.0¢ Sentiment: None Disclosure: Not Held
