The Cloncurry East Project is centred around 20km east of Cloncurry in northwest Queensland.
The Project is at an advanced stage of exploration and is highly prospective for iron oxide copper gold (“IOCG”) +/- cobalt mineralisation and variants of this style of mineralisation.
An initial mineral resource (JORC Code 2004) has already been defined at Salebury which is one of one of the advanced prospects within the Project area.
The Cloncurry East Project presents Magnum with an advanced exploration opportunity with an existing resource, high priority drill targets, an extensive exploration data package and established infrastructure.
The CEP also provides Magnum with exposure to a region that is highly prospective for various styles of base and precious metal mineralisation. The underlying geology host rocks are part of the Mt Isa Eastern Succession, which contain many historical and current mines and deposits. These include Ernest Henry, Osborne, Eloise, Cannington and Dugald River, as well as a number of significant smaller deposits.
The Cloncurry East Project is a farmin by Magnum into three exploration tenements held by Exco Resources Ltd (“Exco”) and CopperChem Limited (“CCL”) (together the “CopperChem Group” or “CCG”).
These tenements, comprise Exploration Permits for Minerals (“EPM”), EPM 13137 containing the Notlor Prospect (held by CCL), EPM11675 containing the Salebury Deposit (held by Exco) and EPM14295 which contains the Pumpkin Gully and Crow’s Nest Prospects (held by Exco).
Pursuant to the terms of the farm-in, Magnum can earn a 50% equity stake in the Project by expending $2 million over a three year period with a minimum of $350,000 to be expended in year one. Magnum can withdraw from the farm-in at any time after its year one expenditure obligation has been fulfilled.
The Company can earn an additional 25% equity stake in the CEP through the expenditure of an additional $2 million in year four. CCG retains the right to claw back to 50% ownership in consideration of the payment of $2.66 million to Magnum.
Utilising an extensive CCG database existing over the EPMs, Magnum has delineated near term high priority exploration drill targets which it plans to test as soon as possible. The CCG database is a significant asset for the farm-in and includes information pertaining to airborne and ground geophysics, surface geochemistry and extensive drilling results, with an estimated replacement cost of well over $4 million.
In addition to the high priority exploration drill targets, Magnum plans to undertake a re-interpretation of the existing extensively mineralised areas within Notlor and Salebury. This work will focus on the potential for strike and depth extensions, particularly within the higher grade Cu-Au zones but also the cobalt enriched zones.
Metallurgical test work will also be carried out to determine the most favourable treatment options.
Exco previously reported that an initial (JORC Code 2004) indicated and inferred mineral resource of 1.3 million tonnes grading 0.9% Cu and 0.5g/t Au has been defined at Salebury (see Exco announcement of 12th October 2012).
This includes an indicated mineral resource of 1.1 million tonnes grading 0.93% Cu and 0.56 g/t Au, and an inferred mineral resource of 0.2 million tonnes grading 0.75% Cu and 0.46 g/t Au.
This resource is open at depth and along strike and has areas of cobalt enrichment.
The main area drilled to date has a strike length of approximately 900 metres with several high grade domains. Previously released drill intersections (see Exco Quarterly report for three months ending June 30th 2011) within these higher grade zones include:
In relation to Notlor, Exco previously reported (see Exco Quarterly Report for three months ending 31st December 2007) that drilling has shown a zone of mineralisation at similar grades to Salebury, which is also open at depth and along strike.
Magnum plans to convert this mineralisation to a JORC 2012 mineral resource estimate as part of the proposed program.
The Notlor mineralisation occurs over an approximate 2 kilometre strike length hosted in metasediments, being dominantly black shale. Within this overall zone are areas of higher grade mineralisation, as indicated by the following previously released better drill intercepts:
The Pumpkin Gully prospect is located 15km east of Cloncurry, within EPM14295. The area was highlighted by a strong discrete magnetic and coincident radiometric anomaly, which is situated stratigraphically near the basal contact of the Toole Creek Volcanics and on the fold axis of the Pumpkin Gully Syncline.
Metasomatic and sedimentary Cu-Au-U bearing ironstones occur as interflow sediments along a strike length of approximately 900m within a sequence of mafic volcanics.
Two phases of RC drilling were completed by Exco, with significant mineralisation intersected in complexly folded ironstones over a strike length of more than 400m. Best intersections reported to date are; 24m at 0.83% Cu and 0.26g/t Au from 24m in hole ECRC022 and 10m @ 0.67% Cu and 0.32g/t Au from 20m in hole ECRC298 (see Exco Quarterly report for three months ending June 30 2011).
The Crow’s Nest prospect occurs within EPM11675. The prospect is situated within Toole Creek Volcanics on the southern limb of the Pumpkin Gully Syncline.
The prospect is located along a NW striking sequence of calc-silicates and black shales that have been intruded by dolerite and are now partially masked with thin transported cover.
Historical exploration included shallow RC drilling beneath workings and returned a best intersection of: 14m at 1.05% Cu and 1.0g/t Au from 40m in CNRC003 (refer to Exco Quarterly report for three months ending 30th June 2011).
Crow’s Nest forms one of the priority exploration drilling prospects.
As part of the review of the extensive data base over the Cloncurry East Project it has been noted the high incidence of cobalt within sections of the Notlor and Salesbury prospects.
Previous exploration across these prospects has focussed on the Cu-Au potential and although cobalt was recognised, systematic results have not previously been tabulated.
These results confirm the prospectivity of the Cloncurry East Project for iron oxide copper gold (“IOCG”) +/- cobalt mineralisation and variants of this style of mineralisation.
Better intersections include:
ENRC004 46m @ 2.33% Cu, 1.00 g/t Au and 2642 ppm Co from 22m and,
ENDD002 27m @ 2.63% Cu, 1.61 g/t Au and 1803 ppm Co from 33 m, and
ECRC307 30m @ 1.93% Cu, 1.25 g/t Au and 1128 ppm Co from 78m, and
ECRC397 12m @ 3.17% Cu, 2.38 g/t Au and 1334 ppm Co.
The extensive database available to Magnum is still being actively reviewed. It is considered very likely that additional exploration targets will be identified.