Minotaur Exploration (ASX: MEP, Share Price: $0.083, Market Cap: $17m) is one of our most respected copper exploration plays – maintaining a strong and diverse portfolio of exploration projects, a well-credentialed exploration team, together with solid cash reserves and high-profile joint venture partners – ensuring a high-level of exploration activity. It maintains Sprott Group as a 12.87% shareholder.
Minotaur has advised initiating diamond drilling with respect to its Osborne JV with Japan Oil, Gas and Metals National Corporation (JOGMEC) in northwest Queensland. Drilling will test several EM anomalies targeting zinc-lead-silver and copper-gold mineralisation in a region that’s sparsely drilled to basement.
Market Significance
Minotaur’s share price performance is easily correlated with the company’s overall level of exploration activity, with rises and falls related to seasonal impacts on activity. Right now there is renewed momentum across various fronts, in particular the company’s Eloise and Osborne joint venture projects in Queensland. OZ Minerals (ASX: OZL) can sole-fund up to $10 million worth of exploration at Eloise over a six-year period for which it can earn a 70% beneficial interest, while JOGMEC can earn up to 51% equity in the Osborne project by spending up to $3.5 million.
Announcement Detail – Queensland Exploration Update
Minotaur has provided an update with respect to exploration activities on its promising copper-gold and base metals exploration projects in Queensland’s Cloncurry region – specifically comprising its OZ Minerals and JOGMEC joint venture projects at Eloise and Osborne respectively.
Osborne Project – JV with JOGMEC, Cloncurry region
The Osborne project is centred 175km south of Cloncurry and is a joint venture between Minotaur and JOGMEC. JOGMEC may earn up to 51% equity in the project by spending up to $3.5 million. Expenditure to date is $1.6 million, with a further $1.5 million allocated to exploration activities this year.
Figure 1: Minotaur’s ‘Osborne JV’ tenements and the Winter, Lark and Robin EM targets over magnetics, referenced to the Cannington silver-lead-zinc mine (owned and operated by South32 Ltd)
The joint venture is seeking Cannington-style silver-lead-zinc and Eloise-style copper-gold mineralisation. The 2016 field season identified multiple geophysical anomalies where conductive basement targets were detected below sediment cover at the ‘Lark’, ‘Winter’ and ‘Robin’ prospects. 2017 drilling is now underway, with a scout hole to test each target in an overall 2,700-metre program comprising 5-6 holes over the next eight weeks.
Lark Target
Two EM conductors are identified at Lark: a western conductor lying parallel and adjacent to a linear magnetic anomaly; and an eastern conductor occurring along strike of a discrete moderate-amplitude magnetic anomaly. An initial 450-metre hole will test the eastern conductor.
Winter Target
Winter is a discrete low to moderate-amplitude magnetic anomaly within a magnetic low, which appears similar in its geological setting to the Cannington silver-lead-zinc deposit. Ground EM has defined conductors coincident with the magnetic anomaly. One 700-metre hole is now testing the magnetic body and some of the modelled EM plates.
Robin Target
Two EM conductors have been identified at Robin: a western conductor lying adjacent to a discrete moderate-amplitude magnetic anomaly; and an eastern conductor coincident with the magnetic anomaly. An initial 400-metre hole will test the eastern plate.
Summary
We initiated coverage of Minotaur Exploration at a price around $0.06 during September 2015 – representing a current gain of 38%.
The company is a well-credentialed explorer with an extensive Queensland exploration portfolio, along with acreage in Western Australia and South Australia. Whilst maintaining 100% ownership of a large chunk of this tenement position, Minotaur importantly maintains relationships and joint ventures with high-quality partners, including OZ Minerals and JOGMEC.
Attention has now firmly shifted to its Eloise and Osborne joint ventures around Cloncurry in Queensland. The cornerstone support of Sprott Group with a 12.87% stake represents a strong endorsement of Minotaur’s strategy and overall prospects.
