Strategic Minerals (LSE:SML) sat at 1.3p today after announcing that exploration drilling has begun at its Leigh Creek Copper Mine in Australia. The battery materials-focused business hopes the work will bring it closer to its longer-term goal of restarting operations at Leigh Creek, which has an existing JORC resource of 24,900ts copper.
The 10-hole drilling programme will look for potential repeat copper oxide between two unmined deposits called Lynda and Lorna Doone. Recent mapping and data interrogation of the Lyndhurst project, on which these deposits sit, has identified several old costeans and pits with traces of malachite.
It will also drill two RC holes to test for potential copper oxide and sulphide mineralisation deep in a pit called Rosmann East. Strategic Minerals hopes to find that existing mineralisation in the pit extends below its current floor.
Finally, it will drill 250 air core holes at a processing facility on Leigh Creek called Mountain of Light. Here, it will test for leftover mineralisation within existing heap leach pads as indication by historical metallurgical metal balances.
Strategic Minerals believes it can successfully re-start operation at Leigh Creek by the middle of next year before carrying out a four-to-five-year project on its existing JORC resource. However, it believes it can double this mine life by accessing additional copper oxide resources on the site’s existing mining leases and smaller nearby holdings. The firm is also carrying out adjacentinvestigatory work in a bid to identify a separate copper sulphide deposit. It says this could ‘significantly andpositively redefine the project’ if found.
Strategic Minerals said the work launched today is an ‘integral’ step in its vision to make Leigh Creek a major long-term copper play. It completed its purchase of the asset earlier this year through a £790,000 share transfer. Managing director John Peters added:
‘The commencement of the first exploration drilling on the LCCM Mining Licences for over 40 years is a new and potentially exciting phase for the LCCM. Thiscomes on the heelsof the completion of the diamond drilling for the metallurgical test work. Exploring for a new deposit at the Lyndhurst Project and for potential copper sulphides below an existing oxide deposit both have the potential, if successful, to create new development options for LCCM.
‘The chairman, Alan Broome, and I recently completed a review workshop of the LCCM project with the full LCCM project team, andwe are both encouraged that the metallurgical test workand preliminary open pit evaluation is progressing successfully. The results of the test workwill be released to the market when they become available.’
Leigh Creek sits alongside Strategic Minerals’ other assets in the USA and the UK. In September 2011, the business bought the Cobre magnetite tailings dam project in New Mexico, which was brought into production in 2012 and continues to provide a revenue stream. This cash is used to cover company overheads and invest in development projects that can supply the growing electric vehicle/battery markets.
In May 2016, Strategic agreed with New Age Exploration to acquire up to 50pc of the Redmoor Tin/Tungsten project in Cornwall, UK. This acquisition completed in February 2017 and a drilling programme in 2017 resulted in a significant upgrade of the resource.