Explaurum Limited (ASX:EXU) is an Australian based gold explorer with its key asset, the Tampia gold project, located 300km east of Perth in a farming region of Western Australia. It is a project which has undergone sporadic development and work programmes since it was discovered by BHP’s now-defunct gold exploration branch in 1987. Historic work on the project identified several key characteristics for a potentially significant gold deposit. BHP and subsequent owners established high grade gold mineralisation near surface, the resource is open in all directions and at depth and that it had significant potential for infill drilling and regional exploration to expand the resource.
Explaurum acquired an 80% interest, which has since increased to 90%, in Tampia in April 2012 and has started on upgrading the resource, developing technical knowledge of the metallurgy of the mineralisation and upscaling the volume of the resource. RGN speaks to Explaurum managing director and CEO John Lawton to discuss the recent capital raise and where those funds will be applied, the key steps for progressing the project moving forward and how much upside potential there is at Tampia.
Lawton says one of Tampia’s key strengths is the shallow depths at which high grade mineralisation occurs, primarily because it reduces the significant stripping costs other deeper mines face.
“This is high grade mineralisation that outcrops at surface which is very rare in Australia these days but perhaps more common in countries with higher risk profiles,” says Lawton.
Since acquiring Tampia, Explaurum has completed a number of fundamental work plans to put the building blocks in place as it targets delivering a feasibility study on the project in the second half of 2017.
Explaurum has established a 2012 JORC compliant inferred resource of 310,000 oz gold at a grade of 2.0g/t, although this is based on previous drilling and not any work the company has undertaken since.
Explaurum has commenced an infill and extension drilling campaign to increase the confidence and understanding in the resource and the structural controls on the mineralisation. The project has also seen some regional exploration based on gravity survey data and a range of technical studies aimed at establishing a preferred development strategy.
The Tampia Project is now approaching a crucial period as the resource is prepared for a feasibility study. The middle of 2017 will be a turning point for both project and Company as several upside programmes culminate and the market will have a much better understanding of how Explaurum will progress this asset.
Recent fundraising support very strong
Explaurum completed a major capital raise in November, raising in total AUS$7.8 million which puts it in a strong position to rapidly progress Tampia over the next 12 months.
“We have just under $8 million in the bank and that will see us through a major 40,000 metre drilling programme, which is currently underway, to upscale the resource and deliver the feasibility study in the second half of 2017,” explains Lawton.
Upscaling the resource
The primary focus in the coming 3-6 months will be to improve the resource at Tampia. Currently the inferred resource does not include any of the results from the drilling Explaurum has completed. However, the resource will be the subject of a ‘major upgrade’ which will be announced next year and the feasibility study will be based on the new resource.
In early November, Explaurum commenced a large scale 40,000m gold exploration RC drilling programme. The programme will focus on infill an extension drilling and Lawton is hoping it will establish the true potential of Tampia.
Explaurum are spending $2.5 million on the five-month programme and as well as providing an increase to the resource, the drilling will also be used to test the potential of new regional zones of mineralisation.
“It will be a significant upgrade of the resource. We expect a significant increase in the size and quality of the resources,” Lawton stresses.
Alongside the drilling programme Explaurum is also employing gravity survey techniques to identify regional targets along the 15km mineralised trend. Lawton says the ground gravity has opened up the greater project potential in addition to the current resource area.
“We completed a gravity programme over 4km of the 15km belt and it provided much better information than we were expecting.”
Explaurum’s statement on the gravity survey suggested the Tampia mineral system has far more gold than previously thought, both in surface area and depth extent. The release says the mafic gneiss hosting the Tampia gold resource could be ‘three times the size currently understood’.
The survey has produced two new areas of interest for Explaurum. Both are approximately 500m from the resource area, with recent drilling providing intersections of 5m at 10.5g/t gold and 5m at 7.6g/t gold (north and west of the resource area respectively) at relatively shallow depths.
“That is very exciting. Most of the interest in the market is about the potential size of the project which at an early stage of assessment.”
“Our exploration target has always been over 1 million ounces of gold.”
In addition to the upside potential on the resource Tampia is blessed with having a strong infrastructure system already in place. It is close to a local town called Narembeen which supports the development of the project. Lawton highlights that any future mining operation would be based in the township and that the project will contribute to local employment and the local economy.
“We will recruit locally and use local businesses as much as possible, that’s how we like to operate. The close proximity to Perth guarantees any future Tampia mining operation would not be a fly-in/fly-out operation.”
The Company has based its studies on the assumption of accessible grid power for the project. The grid line is 11km away and access to that will assist the economics of the project.
The bulk of Explaurum’s work for the next stage in developing Tampia revolves around the drilling programme recently commenced and then supplementing the resource with new ounces from exploration targets. The resource upgrade is expected to be complete by the middle of 2017 and Lawton wants to announce the feasibility study during the second half of 2017.
Exploration results to date have been very positive and while development of the known resource is the Company’s primary focus, there is keen market interest in understanding the potential scale of the project which will be determined from Explaurum’s concurrent regional exploration programme along the 15km mineralised trend.