-------------------------------------------------------------------------------- $64 million Important field work to commence at Collurabbie
Falcon Minerals is one of the country's best credentialed and highest-profile exploration companies. The company's exploration strategy is to utilize its proprietary data package to identify specific targets in Australia that have similarities to Olympic Dam-style deposits, and other major volcanogenic gold and copper systems.
-------------------------------------------------------------------------------- "The Collurabbie project remains one of the highest-profile exploration projects in Australia, and the current field season will be the most important in its history." --------------------------------------------------------------------------------
Utilising this data package, Falcon has secured targets throughout Australia. Geophysics has been acquired over the company's selected target areas and processing has confirmed geophysical images that are consistent with large intrusive bodies beneath sedimentary cover.
Most interest has been focused on the company's high-profile Collurabbie Project in Western Australia. Initially a joint venture project with WMC Resources, following that company's takeover by BHP Billiton the project is now operated by BHP and a crucial field season lies ahead. BHP will almost certainly make a decision at the end of the upcoming field season as to whether it will continue its support for the project.
In terms of its key personnel, Falcon's chairman is Kerry Harmanis, who is also the founder and executive chairman of the outstandingly successful Jubilee Mines. Ray Muskett is a non-executive director and he is an experienced geologist that has formulated various concepts and supporting databases that have been orientated to the identification of Olympic Dam style ore bodies and other large volcanogenic gold/copper deposits. He has worked for a variety of companies including WMC Exploration Division at Kambalda and Hamersley Exploration.
The company's flagship project is its Collurabbie Project in Western Australia, where exploration results to date have proved to be highly encouraging and show the potential for both massive and disseminated sulphide mineralisation..
Collurabbie is interpreted to have the characteristics indicative of a new nickel sulphide camp in Western Australia. Isolated from any previous nickel sulphide discovery in Western Australia, the project has attracted attention as a new greenfields discovery, with a geology not seen before in Australia - the presence of platinum and palladium up to several grams per tonne being an unprecedented find in the context of its massive nickel and copper sulphide association. Parallels have been drawn by WMC between Collurabbie and Falconbridge's Raglan district in Quebec.
Currently there is around $A2 million being spent on exploration at Collurabbie, with BHP contributing 70% of the expenditure and Falcon the remaining 30%. Much of this will be to fund a rejuvenated drilling program, as drilling activity dried up at Collurabbie following the WMC takeover by BHP.
We regard the current field season as being crucial to BHP-Billiton's ongoing involvement in the project. Whilst this could cause some volatility in Falcon's share price in the short-term, we believe the current field season will confirm Collurabbie's status as a unique, world-class nickel-PGE province that will have positive longer-term ramifications for the company. b>Accordingly we recommend Falcon Minerals as a Buy around 51 cents.
RBO Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
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