Venturex Resources (ASX: VXR)
Quarterly Activities Report for period ended 30 June 2016
HIGHLIGHTS:
Whim Creek Access Agreement with Blackrock Metals Pty Ltd
Quarterly payment by Blackrock to the Company of $250,000
Cathode copper production of 194 tonnes
Ion Exchange unit installed and being commissioned
Evaluation of additional sources of heap leachable copper in progress
The Company re-iterates its guidance of 1200t copper output and A$1.6M of cash flow, from its share of the Blackrock Agreement in FY2017
Whim Creek Copper-Zinc Project – near-term production opportunities
Detailed structural mapping of Mons Cupri open pits and surrounding areas has identified controls for high grade stringer style copper gold and massive zinc mineralisation, and potential for new zones of mineralisation
Assessment of preliminary data from IP Survey identifies several promising anomalies
Sulphur Springs Copper-Zinc Project
New Resource model increase copper content by 6% and identifies near surface supergene mineralisation
Opportunity for staged development of project
New underground mine plan identifies savings of $61M or 22% in mining costs
MOU signed to enter into Farm-in and Joint Venture with lithium focussed exploration company, subject to due diligence, on lithium rights at Sulphur Springs
OVERVIEW
Venturex Resources Limited (ASX: VXR Venturex or the Company) is pleased to report on an active June Quarter which saw strong progress with its three-pronged strategy of:
Increasing and extending the income stream from the copper cathode produced at Whim Creek under its Access Agreement with Blackrock Metals Pty Ltd (“Blackrock”) for treating heap leachable resources;
Identifying opportunities for near-term production from the existing sulphide copper-zinc Resources at Whim Creek. This would be in addition to the existing production by Blackrock; and
Ensuring that the Sulphur Springs Copper-Zinc Project is fully optimised and permitted ready for development in order to take advantage of the forecast uplift in commodity prices.
WHIM CREEK ACCESS AGREEMENT WITH BLACKROCK METALS
An Ion Exchange unit to recover copper from copper sulphate residue in the process and environmental ponds was installed and being commissioned at the end of the Quarter. This unit is forecast to add 1 tonne of copper metal a day to production.
Work commenced on the evaluation of oxide heap leachable mineralisation contained in mineralised stockpiles and remaining in-situ around the existing open pits at Whim Creek as potential sources of heap leachable copper. A detailed search of historical records and site inspection of mineralised stockpiles has been completed. This work is all fully funded by Blackrock.
Blackrock continued turning the existing heap leach dumps over and restacking them using an excavator. Mechanical issues with the excavator and generators on site together with production interruptions due to tie ins of the Ion Exchange unit restricted production during the quarter to 194 tonnes of copper cathode.
Table 1 – Copper Cathode Production and NPI for the 12 month period and Project to Date (See full announcement link below)
NEAR-TERM PRODUCTION – WHIM CREEK COPPER-ZINC PROJECT
The Whim Creek Copper-Zinc Project, located 115km west of Port Hedland, includes the historical Whim Creek, Mons Cupri and Salt Creek mines, where 67,000t of copper has been produced from near-surface oxide ores, the Evelyn resource and 18,100ha of tenements in the highly prospective Whim Creek Basin.
The Company is focused on achieving near-term production from the existing copper-zinc sulphide resources at the Whim Creek Project by:
Assessing the viability of production from the existing Resources in the prevailing favourable capital and operating cost environment; and
Increasing the size and/or grade of the existing Resources by exploration.
The Company continued to advance exploration and target definition on the Mons Cupri mineralised system. The Mons Cupri deposit is an extensive stock work breccia copper system with zones of massive zinc-lead mineralisation and is the largest Volcanogenic Massive Sulphide ("VMS") system in the Whim Creek field.
Detailed structural mapping in and adjacent to the Mons Cupri Main and North West open pits identified the primary and secondary controls for the high grade stringer style copper gold mineralisation and overlying high grade zinc mineralisation together with new zones of alteration that indicate the potential for new areas of Volcanogenic Massive Sulphide (VMS) style mineralisation (refer ASX Announcement 17 May 2016).
Preliminary assessment of the results of an Induced Polarisation (IP) survey around the Mons Cupri open pits identified promising anomalies that indicated the potential for extensions to known high grade VMS mineralisation to the west and down plunge and to the east at both the Main and North West Mons Cupri open pits. It also identified the previously unidentified potential for a repeat of Mons Cupri to the south and north of the open pits (refer ASX Announcement 7 June 2016).
Evaluation of the results of the IP survey and the development of a new Resource model for Mons Cupri was ongoing at the end of the Quarter.
The Company continued to build on its experienced team of geologists with the appointment of Stefan Gawlinski who has extensive experience in exploration, Resource development and production from VMS systems (refer ASX Announcement 21 April 2016).
SULPHUR SPRINGS COPPER-ZINC PROJECT
The Sulphur Springs Copper-Zinc Project, located 144km south-east of Port Hedland, includes the proposed Sulphur Springs and Kangaroo Caves mines together with tenements covering 27km of the Panorama trend that contain numerous advanced VMS-style exploration targets.
An updated Resource model and estimate was developed for the Sulphur Springs deposit. This model contained 6% more copper metal and identified a near surface supergene Inferred Resource of 800,000 tonnes grading 4.2% copper containing 34,000 tonnes of copper metal (refer ASX Announcement 11 May 2016).
The supergene material is expected to be amenable to treatment via heap leach methods and opens up the potential for another near term production and cash flow opportunity for the Company.
The new Resource model more accurately reflects the geology of the mineralisation and waste surrounding it and allows the potential risks associated with the treatment of transition mineralisation and the disposal of the various types of waste materials from the proposed open pit to be identified and mitigated.
A new mining plan based on the Resource model identified the opportunity to adopt a bulk mining method that afforded savings in capital and operating costs in the underground mine of $61 million or 22%. A revised Ore Reserve for Sulphur Springs was released (refer ASX Announcements 28 June and 1 July 2016).
This work continues to de-risk the Sulphur Springs Project and confirm that it is a valuable, development-ready base metal project which is highly leveraged to continued improvements in the zinc price.
EXPLORATION
A Memorandum of Understanding was signed with MacArthur Minerals Limited (TSX-V:MMS) to enter into a Farm-in and Joint Venture agreement (FJVA) on the lithium rights on the Company’s leases containing the Sulphur Springs Copper Zinc Project. Entering into the FJVA was subject to satisfactory completion of due diligence by both parties over two months. The due diligence is ongoing.
CORPORATE
Securities Information
As at 30 June 2016, the issued capital of the Company is 1,746,194,595 ordinary fully paid shares and 26,366,197 unlisted Performance Rights.
Financial Information
The Company’s net cash and receivables position as at 30 June 2016 was $0.728 million and it has no debt. The Pro-forma Appendix 5B – Statement of Consolidated Cash Flows is provided in a separate report.
John Nitschke
Managing Director
VXR Price at posting:
1.0¢ Sentiment: Buy Disclosure: Held
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