Perth-based explorer Encounter Resources (ASX:ENR) has ‘significantly’ expanded the Jessica Copper Project in the Northern Territory ahead of a maiden diamond drilling program set to start next month.
The company reports the farm-in tenure with South32 (ASX:S32) has been expanded by about 60% to now cover roughly 10,300km-square along key structural corridors east of Tennant Creek.
Encounter says the diamond drilling program starting in June or July 2023 will consist of 4 holes for 3,500m to test targets identified through reprocessed seismic and gravity surveys.
The company reports seismic solutions company HiSeis reprocessed seismic data that extends through Jessica to provide greater detail of the geology and structure in the upper 1,000m. Additionally, a 2km spaced gravity survey was also completed, with 1km spaced gravity infill data collected over a series of ‘high-priority’ magnetic targets.
This reprocessing of seismic data highlighted a string of new targets for drill testing, including the Zeta iron oxide copper-gold (IOCG) target, which Encounter describes as a ‘significant’ discrete gravity feature coincident with a prominent magnetic feature on the margin of a large interpreted intrusive body. Additionally, there is also a discrete seismic reflector at depth immediately underlying Zeta.
The Jessica project was expanded to include these new targets.
Commenting on the upcoming drill program, Encounter Resources Managing Director Will Robinson says:
“In 2022, we utilised new, widespread seismic coverage, together with a detailed gravity survey, to generate targets at Jessica for drilling in 2023.
“This exercise also highlighted compelling new targets adjacent to Jessica”
“The South32 farm-in tenure has been significantly expanded to include these new targets”
This exercise also highlighted compelling new targets adjacent to Jessica. As a result, the South32 farm-in tenure has been significantly expanded to include these new targets. Diamond drilling of the initial targets identified within the original Jessica tenure is scheduled to commence in June/July 2023.”
Under the farm-in agreement at Jessica, South32 has the right to earn a 60% interest in the project by sole funding $15 million of exploration expenditure within 10 years.
During the farm-in phase or joint venture (JV) period, South32 may earn an additional 15% interest in Jessica by completing a Scoping Study. Upon South32 earning the initial or further interest in Jessica, both parties will be required to contribute funds based on their pro-rata interest or dilute their holding according to a standard dilution formula.
If either party dilutes below 10% ownership, its interest will be automatically converted to a net smelter return (NSR) royalty. South32 is the manager of the project during the farm-in phase.
Encounter says a technical committee comprising representatives from both companies will review and approve annual exploration programs and budgets during the farm-in phase. All decisions made by the technical committee are decided by majority vote, with South32 having the casting vote.
Encounter Resources is a Perth-based mineral exploration company focused on discovering major copper deposits in Australia. The company wields a large portfolio of projects considered prospective for copper, rare earth elements (REE), and lithium, including the Lamil, Yeneena, Aileron and Irwin projects in Western Australia.
The company also holds the Elliot, Jessica and Carrara, and Sandover projects in the Northern Territory.
(20min delay)