yesterdays announcement

I talked to Mike yesterday and I think there have been a few things perhaps overlooked in yesterdays announcement. In Mikes opinion, Enigma is the biggest copper anomaly in WA history. The announcement stated that the aims of the DD program had been met. Now the market has seen yesterdays announcement as a disappointment and clearly felt that the aim was to locate primary ‘massive ore’.

Mike’s view is that the aim was to locate substantial thicknesses of primary copper sulphides and that while it would have been great to have found massive material, that was not the likely outcome of a limited number of holes. Rather he is first trying to locate an orebody by homing in on the areas with the best indications of primary mineralisation below the oxidized material found to date. He believes that this has been successful, particularly in hole 14 where it is clear that undepleted chalcopyrite has been found in altered rock over some 300 metres. In fact he considers hole 14 to be more significant than holes 12 and 13, where despite the higher grades, some evidence of leaching of the chalcopyrite was evident. The 300 metre thickness of the primary material in hole 14 is exceptional. Now the question is what does hole 14 mean. Well one possible explanation is that we are drilling into the halo surrounding a nearby, much more important deposit. Apparently an analogy, of holes 12, 13 and 14 and the emerging copper-nickel-cobalt-silver-zinc metal association, may be the environment surrounding First Quantum Minerals $2 billion Sentinel Project in Zambia.

Using a careful approach, especially in view that the cost of DD drilling at Enigma is 100-200K per hole, he has decided that DHEM is the next step before drilling ahead. This seems perfectly logical to me especially as funds are tight. By the way he seems to think that there could be a number of steeply dipping NW trending primary structures at Enigma, beneath the horizontal oxidized zones, that may be the controls of the primary mineralisation.

I asked about the financial situation and I believe that he is looking at a number of options and is very aware of the need to conserve shareholder value. On the other hand it is a difficult environment at present for a junior to raise funds from shareholders at the present price without printing a lot of paper. It isn’t hard to envisage a number of parties who might be interested in participating in Enigma. I expressed the view that shareholders would be looking very closely at any arrangement as to date the risk has been borne by the shareholders who have paid for the project to be brought to such an exciting stage. Mike certainly understands that viewpoint..

I think you will see a BRR interview soon and I suggested that Mike expand upon the issues in the announcement as well as discuss future funding scenarios rather than just repeat the announcement which is what happened last time and was not well received.

I’d like this thread to spend a bit of thought on creative funding ideas.