Entry for STT: RXL, Rox Resources Limited, Zinc: Reward Project, NT, Nickel: Camelwood Project, WA, FA & TA.
Fundamental Analysis Earn in partner, Teck, has just exercised its right to sole fund the next $10m in exploration at the Reward Zinc Project in the NT, to earn a further 19%. This will take their interest to 70%. The company recently passed the $5m in expenditure at the project to take their interest to 51%.
On the 5th of August, RXL announced a high grade zinc discovery at the Teena prospect with a 26.4m intersection @ 13.3% Zn + Pb, including 8.0m @ 21.2% Zn + Pb. Although it is a deep discovery at 1,060m depth, the commitment by a major to invest such a significant sum to increase their interest is a strong endorsement of the potential. Significantly, a second hole 200m to the West of the discovery hole has intersected visually similar mineralisation. Results are awaited.
A 4,500m drilling program is underway with the likelihood of further drilling success.
The second project of interest is the Camelwood nickel project in WA. Whilst the mineralized intersections to date have been quite narrow, the results clearly highlight the potential of the area. Given the mineralization is considered to be similar to that which occurs at Kambalda and these types of accumulations tend to occur in clusters, the prospectivity of the project has, in my opinion, been confirmed.
The current activities include a data audit and an initial resource estimation. In addition a regional review is underway to identify repeats of the Cammelwood deposit.
Technical Analysis A bullish pennant has been forming with a breakout on a close at or above 5.1 cents. I expect a retest of the breakout level before a sharp move higher. Adding the height of the flag (2.9 cents) to the breakout level of 5.1 cents gives a target of 8.0 cents.
I expect a brief pause at 6.1 cents and after that little resistance to my target of 8.0 cents.
