mining news article

Compass tames wildcat hole

Thursday, 2 November 2006

A DRILLING gamble by Compass Resources has paid off on a wildcat drill hole in western New South Wales, with investors pushing the company's share price up 22c on the news.

The company took a punt on the 80%-owned Cuttaburra and Yancannia exploration licences, which were acquired to test a concept that a new base or precious metal mineral district may exist in the remote area.

Following interpretations of airborne magnetic trends taken from regional geophysical data, all based on Compass' conceptual model, a single wildcat hole was drilled into each of two widely spaced anomalies.

Compass said "both holes confirmed our exploration concept that the magnetic data reflected basement features within effective exploration range" and the holes intersected a layered sequence at a depth of about 75m, beneath the covered cretaceous rocks.

Assays have only been received for one hole drilled from Cuttaburra and returned values of up to 0.11% copper, 0.18% zinc, 0.41% tungsten and 40 grams per tonne silver.

Compass said silver in particular was anomalous over wide intervals, and included intercepts of 5m at 11.2 parts per million silver from 15m and 29m at 7.3ppm from 132m.

Assays for the Yancannia drill hole have not been received, however the company said on visual inspection it "appears to be less well mineralised".

Compass has applied for five new exploration licences in western NSW through its wholly-owned subsidiary, Four Points Exploration, and is planning significant drill programs in the area. However, diamond exploration remains conceptual at this time.

The company was recently given the green light for the Browns base metals oxide project in the Northern Territory, and expects a plant capacity of 1.3 million tonnes per annum with the measured resource at 12.2Mt of 0.54% copper, 3.76% lead, 0.119% cobalt, 0.096% nickel and 10.5gpt of gold.

Shares in Compass gained 22c to close at $4.60 yesterday and remain unchanged in morning trading.