a very good read

Copper and gold in the shadow of giants

Wednesday, 11 April 2012

MULTIPLE targets in booming commodities has pointed this fledgling company in the right direction and attracted the attention of global mining majors. By Blake Wilshaw - RESOURCESTOCKS



Exploration geologist Robson Urai with core from drilling at the Tekem prospect of the Bismarck project. Image courtesy of QRL.

Quintessential Resources has established itself as one of Papua New Guinea’s most promising growth shares.

Since listing on the ASX in August 2011, it has been focused on the Bismarck tenement situated in the northwest trending Papuan Fold Belt.

At 320sq.km, Bismarck contains 20 prospects. The Tekem gold district and the Mal porphyry copper district were the first target areas for Quintessential.

“We are focussed on drilling Tekem and Mal simultaneously; a dual commodity and mineralised style focus,” Quintessential managing director and founder Paige McNeil said.

With Tekem progressing to plan, McNeil and her team are keen to uncover what the Mal porphyry target could hold. Early indications suggest big things.

“We mobilised to Mal, after the IPO in August and conducted a comprehensive 3D-IP geophysical survey,” McNeil said.

“The IP data identified intense, cohesive and extensive chargeability, conductivity and resistivity anomalies, which have demonstrated a major sulfide mineralised system.”

For the layman, this means Mal has a similar signature to the massive copper deposits that have been uncovered in PNG in recent years by some of the world’s biggest mining houses.

Of note is the nearby Newcrest Mining/Harmony Gold Mining Wafi-Golpu deposit, which hosts growing resources of 9Mt of copper and 19.3Moz of gold and the 25Moz Porgera gold mine.

“The first hole ever drilled at Mal started February 14 to test a strong vertical chargeability anomaly called the Pipe, that extends past the 500 metre modelled geophysical depth and it is associated with a strongly anomalous and prospect area wide molybdenum in soil and rock anomaly,” McNeil said.

“Molybdenum often occurs around the margins of porphyry systems so that is a good sign for Mal. Mal could be more of a molybdenum-copper-gold porphyry.
Assay results from the first hole will tell us and they are expected in April.”

Another gold prospect in the area between Tekem and Mal is called Semben and it has historically reported high grade gold in trench and gold and silver in drill hole assay results. Quintessential is undertaking an initial evaluation of this prospect and results should be available in March.

The company owns and operates two diamond coring rigs. The larger of the two is capable of drilling to 1000m in NQ-sized core.

“Down payments for the specialty diamond coring rigs were made prior to the IPO as part the corporate strategy to hit the ground running, be self-reliant, plan for and achieve exploration success through drill testing our suite of excellent prospects,”
McNeil said.

“Management knew Mal was highly prospective and that Quintessential would need the capability to drill to a minimum of 700 metres depth to fully test the initial targets, so we purchased two rigs and supporting heavy equipment so we could drill year round in acost effective and flexible manner, near surface or at great depths.”

This means Quintessential does not face delays and setbacks associated with using contract drilling rigs, earth moving equipment and logistical support vehicles.

“The drill rigs, rods and equipment paid for themselves after the first drilling program,” McNeil said.

“The capital purchases were a unique but logical initiative anddemonstrated our confidence inBismarck and our in-country experience.

“Quintessential has already accomplished much of what we set out to do in the IPO prospectus because of our in-country expertise.

“We’ve completed a great deal of exploration in the six months since listing and that has held us in good stead with our shareholders who want us to test these compelling drilling targets,” McNeil said.

“The exploration team is led by Dr Salam Malagun and it has worked very effectively in logistically and physically challenging terrain to achieve early positive assay and geophysical results in multiple prospect areas. Four geophysical grids were completed in 2011, the first one at Tekem was prior to IPO.”

Growth projects in the Quintessential stable include the Irak and Giwi porphyry copper prospects in the Bismarck exploration licence, which were identified via geochemical surveys then confirmed and enhanced by 3D-IP surveys.

“We’ve defined drilling targets at both of these prospects that unfortunately will be placed on hold until we have more resources to start evaluating them,” McNeil said.

Longer term, Quintessential has four pending exploration applications with two in Milne Bay and two on the island of New Britain.

“The applications in Milne Bay are waiting ministerial granting and they are strategic gold plays where we’re looking for high-grade epithermal targets,” McNeil said.

”The applications have been carefully pegged and they also take in the strike extensions of the two known epithermal gold deposits.”

On New Britain, Quintessential has conducted the prescribed Mining Court Warden’s hearings with the landowners.

“We’ve been given positive indications that the landowners would like us to explore there,” McNeil said.

“The New Britain applications cover more than 5000sq.km and the conceptual targets are porphyry copper-gold deposits associated with major structural zones underneath a relatively thin cover of limestone. Aeromagnetic and radiometric programs will be undertaken once the ELA’s are granted.”

As Quintessential charges ahead with its busy exploration schedule, other players have taken notice.

“Bismarck has attracted interest from the majors, including BHP Billiton, Antofagasta Minerals,Vale and Newcrest, McNeil said, and we are hosting site visits in late March/April.

“Further down the track, a strategic alliance for development could be welcomed, but initially it’s our objective as a junior mineral explorer to build our resources through successful, targeted and cost effective exploration to achieve the best leverage and appreciationwe can for our shareholders.”

*A version of this report, first published in the March 2012 edition of RESOURCESTOCKS magazine, was commissioned by Quintessential Resources