Hi all, been a while since I posted but since there has been a lot of action recently I thought I would check in for an update. Plenty more posters thats for sure.....but do they know what to expect?. Well, this post will give you an idea of what I expect, for whats it worth. I welcome the feedback if you have any.
A quick read of recent posts shows a general feel that the results either didn't match expections, or worse, didn't correlate to the reported visuals. Firstly, it is worth noting that Spitfire have announced an exploration of of 5-10Mt @ 15-25% and that estimate has not changed with subsequent reporting of visuals or assays. This should therfore be your expectation. It is fine to want to try calculate your own figures (as I do) but if you get a wildly different result, and the company doesn't back that up, then maybe you should re-check your figures. Of course you could still be right, but don't expect the market to follow until your thoughts are confirmed by company reports.
Comments on results,
Manganese can be visual at very low grades and you have to account for this when the company reports visual intercepts. A 50m visual zone is very encouraging but you shouldn't expect the entire 50m to be mineralised @ high grades. It just doesn't happen. I was expecting 20-25% of the reported visual zone to be mineralised @ 15% Mn or more. If you have been in SPI long enough you should remember that the assays from Bandits reported intercepts about 25% those reported by visual interp.
My analysis of the visuals reported in the previous announcement showed an average thickness of 30m over the entire project area, consisting of 2 zones. Given the previous logs at Contact, I was expecting 6-7m @ 15%+ which would indicate a potential resource around 4-5Mt @ 15% (lower end of exploration target). I am generally conservative in my estimates.
So far an upper and lower zone has been identified but the assays reported today aren't from the lower zone as far as I can tell. Todays assays match previous results from the same upper zone previously assayed. The results from the lower (and thicker) zone are the "wildcard" grades.
The assayed intercepts for the upper 17m thick visual zone are in line with my expectations ie about 4m. I am expecting 10m+ from the lower zone @ X%mn. The intercepts are widening towards the south east where the mineralisation remains open. This is an enouraging trend. The best case scenario here is a correlation between increased thickness and increased grade, which will really amp things up. Still have to wait and see about that.
So far the grades aren't in the same league as those at Woodie Woodie, but they are still encouraging, especially given the positive metallurgical results to date showing the ore upgardes to high quality and grade.
For those who haven't read my previous commentary from some months ago you can read it here.
Here is a tenement map from from that post, also known as Billionaire City.
FMG - Twiggy Forrest - Australia Richest Bloke (usually) Hancock - Gina Rhinehart - Australias Richest Woman Consolidated Minerals - Ukrainian billionaire Gennadiy Bogolyubov - Bought CSM for USD$1.15B Jupiter Mining - South African billionaire Brian Gilbertson - lost bidding war for CSM to Bogolyubov Min resources - current mover and shaker in East Pilbara - >$2B market cap
All of these companies have submit competing tenement applications at various stages and SPI has even come up trumps in a couple of ballots.
....for those who don't understand all that talk about grades and intercepts, hopefully you understand "real estate". SPI is, IMO, the cheapest house in the best street.
Min Resources (ASX: MIN) is showing a keen interest in East Pilbara region with its Nicholas Downs JV and M&A moves to control the Ant & Sunday Hill deposits.
The Ant/Sunday Hill deposits were in a 50:50 JV between Mesa (MSA) and Auvex (Unlisted). MIN has acquired MSA via a takeover offer and has recently offered to purchase the Auvex stake in the JV, and once completed MIN will own the Ant/Sunday Hill project.
The total resource at Ant/Sunday Hill is 9.6Mt @ 19.4% Mn. Auvex's 50% share is 4.8Mt. The MIN offer was 4.5M shares @ $11.5 for a $51.75M consideration. This equates to $10/tonne at 20% Mn.
Spitfire is on track to deliver a JORC resource for Contact based upon the present drill program. The company is targting 5Mt at the lower end, and my calcs suggest the reported results are definitely on track to deliver this result.
Considering the Auvex offer and Spitfires target for Contact, a similar offer from MIN would be in the order of $50-100M or $0.38-0.76 per share.
Certainly within the realms of possibility, but in no way guaranteed.
