Countdown to discovery – hitting paydirt at Prominent...

Countdown to discovery – hitting paydirt at Prominent Hill
Michael Quinn,
11 May 2009

MAY 22: PROMINENT Hill was the best greenfields discovery made in Australia for many years, and with the mine being officially opened this weekend, this is the inside account of how the exciting story unfolded back in late 2001.

The general background was that Minotaur Resources and Billiton had formed a joint venture (prior to Billiton’s merger with BHP) and were farming into ground predominantly held by the Normandy Group. Billiton was seeking iron-oxide-copper-gold (IOCG) deposits in Australia, and was attracted by Minotaur Resources’ local knowledge and the Mt Woods tenements located between Olympic Dam to the south-east and Cooper Pedy to the north-east.

According to Minotaur’s then chief geologist Tony Belperio, six targets were prioritised from the literally hundreds thrown up by the Mt Woods data sets. Each of the prospects was to get just a single drill hole.

“For each target we proposed one hole into the centre of the gravity anomaly to see what it was,” Belperio said. “It was either going to be an IOCG system or it wasn’t. And that is still our strategy. You don’t muck around with all sorts of other geophysical techniques because at the end of the day one hole into these IOCG systems will tell you if it is a mineralised IOCG system or not.”

The six targets selected and drilled in order were 1) Armstrong North; 2) Blaze; 3) Neptune; 4) Uranus; 5) Peculiar Knob North; and 6) Manxman B. Each of these prospects had been previously named and had some previous work done on them by MetalsEx (planet names), Burmine or Normandy (other names).


Tony Belperio and Derek Carter standing next to old Uran1 collar.

And this is how it transpired …

27 August 2001: Drill mobilised for the agreed program of testing six targets.

29 August to 9 September: Drilled Armstrong North hole – minor haematite breccias reported.

10 to 22 September: Drilled Blaze – no mineralisation or alteration of interest noted in core.

23 Sept to 15 October: Drilled Neptune – wide intercepts of magnetite and haematite alteration with visible chalcopyrite noted in core.

24-28 September: Belperio drives up to site from Adelaide to check the Neptune core and peg the next hole, Uran1 – the Uranus prospect. (Belperio said his son, Michael, accompanied him as a high school work experience student, and “clearly remembers pegging Uran1”. Belperio also suggested that the events that followed the find “obviously coloured his view and assisted his decision to go on and do a geology degree”. (The young Belperio now works for Newmont).

16 to 23 October: Drilled Uranus to 450m, the original planned depth. On site geologist Barry van der Stelt noted entire core altered by haematite with broad intercepts of milled haematite breccias comprising up to 70% granular haematite matrix, breccias clasts and bornite visible in several intervals. Core cutting, logging and sampling continued through to the end of October while rig shifted to Peculiar Knob on 24th October.

After “increasingly excited but cautious calls from the field regarding the extent of mineralisation, including possible chalcocite in the now fully cut core”, Belperio goes back up to site from 5-7 November to check the Uran1 core. He confirmed there was significant granular chalcocite mixed in with the granular haematite matrix, with one good interval of about 35m (visually estimated to contain) about 1% copper. Belperio brings all the assay samples back from the field and submitted them to Amdel late on November 7.

November 9: Assay results from Neptune were received and released.

Tuesday, November 13: At 4.30pm a very excited Alan Ciplys, lab manager at Amdel, personally brings to the Minotaur offices the assay results from the Uran1 samples. The 35m of about 1% copper had assayed at 35m at 3.86% copper and 0.63gpt gold within a broader interval of 107m at 1.94% copper. “Clearly there was a lot more chalcocite mixed in with the haematite that could not be discerned by eye,” Belperio said.

Minotaur managing director Derek Carter, Belperio and others work into the evening drafting the release to be made to the market. The initial ASX release went out at 9.20am Adelaide time on November 14. The shares were put in a trading halt by the ASX at 11.50am after Minotaur’s shareprice bolted to about $A1.70 (from less than 20c), with the ASX wanting to know what the company was going to do about a 10c shareholder share purchase plan that was already in train – the shares having been fetching less than 10c prior to the Neptune encouragement. The stock was then relisted on announcing a scale back of the SPP so it would not exceed the 15% limit. Within a few days Minotaur’s share price was trading at levels around the $A3 mark.

Meanwhile, the phones at the Minotaur office literally didn’t stop ringing for days, and it was all hands on deck answering the calls. Carter’s daughter, for example, then a university student, joined staff, management and board in manning the phones after dropping by the offices on a visit and walking into the maelstrom.

19 November: With the hole ending in mineralisation, the rig was brought back to extend the Uran1 hole after drilling the Peculiar Knob target (24 Oct-18 Nov). Uran1 was extended from 450m to 720m from November 19 to December 5. Subsequent assays released on December 6 and December 27 confirmed the presence of significant uranium and rare earths, allowing the link with Olympic Dam style mineralisation to be confirmed.

Belperio and Carter were subsequently jointly awarded the AMEC Prospector of the Year award in 2003, while between the jigs and the reels, Prominent Hill has now become a brand new 85,000-100,000tpa copper and 60,000-70,000oz gold mine owned by OZ Minerals.

And yet the whole story could have been completely different.

“The reason the Uranus target was picked was that while the previous drill hole by Normandy [a mere 200m away], went into one of these typical magnetite systems with lots of low level copper, you could see late stage thin veins of haematite over-printing,” Belperio said. “And so we said ‘oh yes, there has to be a haematite system in the vicinity’ … and the nearest gravity anomaly was 200m away and so that was the target.

“Without that earlier hole, we wouldn’t have chosen the anomaly. It does not stand out like a sore thumb saying drill me, drill me. It was a very subtle, and very ordinary looking anomaly and it wouldn’t have got picked except for that earlier drill hole. Quite sobering!”

However, Belperio contends there are definitely more “Prominent Hills” to be found.

“Olympic Dam was discovered in 75, and there was an exploration boom here on the Gawler Craton until about 1985 and then it all petered out,” he said. “Even though companies have discovered lots of other smaller alterations systems, no one had discovered another economic one.

“But what Prominent Hill has shown is it is not unique … like any other metallogenic province you’ll get the full spectrum of big deposits, medium size deposits and small deposits. They should be out there.

“There should be quite a few more out there, certainly the size of Prominent Hill. If Olympic Dam is the biggest you could expect, and Prominent Hill is a small-to-intermediate version, then there should be a lot more of them.

“But in the meantime the country has been locked up. The prime area that we’d like to be exploring in, the Mt Woods area, is now owned by OZ, so we’re not privy to it. So like everyone else we’ve had to go away and explore around the margins, and in the deeper areas. If we could be allowed back in to Mt Woods, I think we could find another one.”

For now though, Belperio and Carter (via Minotaur Exploration) are seeking IOCGs in Queensland, Canada as well as elsewhere in South Australia.

“We are very familiar with the signature these things give,” Carter said. “Not only geophysically, but also geochemically. But (the lack of discoveries) shows you they are difficult animals to find, no doubt about that. Structure is very important too … there are a few tricks of the trade that we have.”