new copper province in qld

Whilst the cu price manipulation is disappointing there's nothing like a major new find to keep spirits up (and it's still under the radar...).

What the assay results show is that the AQR boys have 2 totally different Cu finds about 15 kms apart (see anns: 18/4, 13/6, 18/6, 25/6, 4/7).

The first brand new discovery, called '7B' is copper, zinc, gold,silver and various VMS halo minerals associated with a VMS extrusion.

The assays tell us that we have Cu with grades over 1% over a 15-20m intersection with a strike length of at least 1.4 km and its open in all directions. The anns also tells us that the mineral is disseminated throughout the holes and the drill holes finish in minerals (i.e.haven't found the bottom).

A geo has modelled the find at about 200 mt at 1% Cu.

If we heavily discount this to 100 mt (to be conservative) at 1% Cu with no credits allowed for other minerals, then 1% of 100 mt = 1 million tons of Cu (and likely to be a
lot more).

To put this in perspective, SFR has 700,000 - 800,000 tons. Moreover,this makes no allowance for the possibility of AQR finding the VMS source.

The ann on 18/4 includes a geo's drawing of the likely VMS structure.

In addition to '7B', the ann on 4/7 has assay results showing 'John Hill/Kiwi Carpet' is a giant copper porphyry supergene blanket, currently 6.3 km long X 2 km wide and open in all directions, including at depth.

Refer to El Temiente in Chilli for a look-a-like structure.

Current projections for the amount of Cu range from 500mt to 1 billion tons at a minimum of .35 Cu.

Again, being conservative and discounting this to the bottom level, 500 mt @ .35 Cu is 1.75 million tons of contained metal (and again, likely to be a lot more).

Another way of looking at monetising this is to conservatively value the dirt at $30per ton. At an operational cost of $10 per ton, there is a GP of
about $20/ton.

Now the key to the economics of these types of very large porphyry systems is "throughput". The systems need to be large enough (& John Hill/Kiwi Carpet is easily large enough) to do about 15 million tons per year = $300m/yr GP. This equates to a payback period (on Capex) of under 2 years!

Again for reference you can look at Yellow Head Mining which has 700mt at .26% and an NPV of 15 times AQR's current market cap.

Interestingly too, Xstrata is processing .2% dirt at Mt Isa.

This post is getting too long so I'll finish in pointing out that 7B and John Hill are next door to all necessary infrastructure with a port only 150km away by road. There will also be an easy start with 7B mineralisation
from 6 m deep.