Tyranna Resources

Drilling for gold in the South Australian province that delivered the 1moz+ Challenger mine

About This Project

The Challenger gold mine in South Australia poured its millionth ounce of gold about a year ago after 12 years of production. With its effective life due to end in 2016, exploration company Tyranna Resources (ASX: TYX) is looking for its replacement. With control over 8,000 square kilometres of highly prospective land around the retiring mine, the odds are certainly stacked in its favour.

 

Ian Finch, Founder and Chairman of Tyranna Resources, has a history of starting successful exploration companies and he’d had the region containing the Challenger mine in his sights for a long time. He’d recognised the area as prospective for various minerals while working there in the 80s, and his suspicions were confirmed in the 90s when a broad geochemical sampling program found 300 gold anomalies – one of which became the Challenger Mine.

 

“The fascinating thing for me as a geologist is that the Challenger mine, which became a million-ounce producer, was developed off the back of one single sample, taken at surface, whose contained gold was 185 parts per billion,” Ian remarks. “That’s why I like this area – because there are still 299 more samples like it and so much undiscovered potential.”

 

This area in north-west South Australia was formerly part of the Woomera Prohibited Area, meaning mineral exploration was restricted. When the South Australian government finally released it for mineral exploration, Ian and his company – then called Trafford Resources – jumped right on it. Trafford initially pegged 5,500 square kilometres of land in its own right. Another 2,500 square kilometres, immediately adjacent to the Challenger Mine, were held in a joint venture between Challenger’s owner Kingsgate Consolidated Limited and Southern Gold. When Southern Gold fell on hard times and offered up its 51% share in the venture Trafford, with an eye on the future, bought it for A$1,000,000 of which A$500,000 was cash.

 

“That meant we finished up controlling more than 8,000 square kilometres of ground, all around the Challenger mine,” says Ian. “Having that control position in a highly prospective area is extremely important.”

 

Trafford named all these tenements the “Jumbuck Gold Project”, adding this to a portfolio of other projects focused on other minerals. A particularly prospective iron ore project was spun off under a separate company called Ironclad Resources in 2007. The company left standing today, Tyranna Resources, is the result of Trafford and Ironclad remerging in December 2014.

 

“By that time, Ironclad had lots of fixed assets that it could sell for potential income, while Trafford had lots of high quality projects,” Ian explains. “So last year the boards of both companies decided to remerge them for the benefit of both sets of shareholders.”

 

He adds that Jumbuck “more-or-less picked itself” to be the flagship project of the remerged company. “Iron ore and every other base metal has been smashed, while gold still remains somewhat of a safe haven and is actually going through a bit of a renaissance here in Australia,” Ian explains. “So there was a real market impetus – as well as Jumbuck’s obvious advantages in size and prospectivity.”

 

Drilling success

That’s the backstory – so what’s happened since? Well, having spent considerable time sorting through and evaluating masses of existing data, Tyranna began its first round of drilling in August 2015. The aim was to better define and extend the known, near-surface supergene (oxide) gold resources and locate likely “feeder” zones (primary gold shoots beneath the supergene blanket). On the 28 October the company announced on the ASX that it had been successful on both counts.

 

An extensive mineable supergene zone was identified at the Golf Bore prospect, with an average thickness of 5-15 metres over 800 metres, with an average width of 120 metres. Underneath that the company identified at least three primary feeder shoots carrying high-grade gold, with results including 2 metres at 31.6 grams per tonne (g/t) from 79 metres and 1 metre at 27.9g/t from 107 metres. Ian says these represent “Challenger ‘look-alike’ targets” and enable the company to immediately begin a feasibility study to mine gold at Golf Bore.

 

Golf Bore is situated on the EL4577 tenement, of which Tyranna now owns 59% and Kingsgate 41%. It appears that the north-eastern extent of the prospect’s mineralisation extends into EL5526, which is owned 100% by Tyranna. This target has been called the Golf Bore North Prospect, and Tyranna plans to undertake a comprehensive drilling program here of between 13,000 and 15,000 metres. Four more advanced prospects – Campfire Bore, Mainwood, Typhoon and Monsoon – are also in line to get drilled within the next 12 to 18 months.

 

Now that minable gold has been identified, the next big question is what to do with it. Tyranna hopes to come to an agreement with Kingsgate to be able to utilise the retiring Challenger mine’s mill to process gold from Jumbuck. However, the economics of the situation may result in the construction of a second processing plant, closer to the ore sources.

 

“Our thinking is that if can extract some gold quickly, then we can produce an income that will help us through the next round of drilling,” says Ian. “We’re currently in discussion with Kingsgate to see what their intentions are with the mine and mill. We would like to use the mill – whether through an agreement with Kingsgate our joint venture partner, or through leasing or purchasing it.”

 

He adds that Tyranna expects to be able to produce half a million ounces of shallow-based, low-cost gold ore in the short term. The longer term holds far greater possibilities, with multiple replications of the Challenger mine quite feasible.

 

“There’s no doubt that the hit rate for gold within our 8,000 square-kilometre area is enormously high,” says Ian. “You wouldn’t expect to see that sort of hit rate if there wasn’t a lot of gold there. So we see Jumbuck as more of a province than a single project – we plan to start up not just one, but multiple million-ounce-plus mines in the area.”

 

The realisation of this grand ambition may be a long way off, but in the past Tyranna (then Trafford) has already rewarded its shareholders. In a move almost unheard of for an exploration company, it paid out a A$6 million dividend to shareholders after managing to earn $17 million from a $2.2 million investment in a separate company, Robust Resources Limited. Ian says “it would be nice to do it again,” and, considering Tyranna’s holdings in other companies, including Orinoco Gold (ASX: OGX), it’s quite possible. His gratitude for the support Tyranna has received so far is clear.

 

“We are in the middle of quite a transformation in the company and I want to thank the shareholders who have stayed with us throughout this rocky road,” Ian remarks. “We raised $705,915 in an oversubscribed share purchase plan just a few months ago, so it’s clear that we’re still getting support and for that we are very grateful.”

 

CONTACT:

info@tyrannaresources.com

+61 8 9485 1040

http://www.tyrannaresources.com

Company

Tyranna Resources

Category

Mining

Phone

+61 8 9485 1040

Brochure

Category
Mining
Tags
mining, Spotlight