St George Mining – (ASX: SGQ, Share Price: $0.335, Market Cap: $84m, coverage initiated @ $0.175 in May 2016 – current gain of 91%)
Key Catalyst
Drilling program extended at the Cathedrals Prospect in WA following outstanding recent massive nickel-copper sulphide drill-hits, with interest continuing to build as assay results are awaited.
In our most recent coverage of SGQ on Monday, we highlighted the significance of the latest outstanding intersection from diamond drilling that intersected nickel-copper sulphide mineralisation at SGQ’s Mt Alexander project. MAD71 intersected 17m of nickel-copper sulphides from 37.5m down-hole.
On Thursday, SGQ announced an escalation of the diamond drilling program, with DHEM surveys now being carried out in all drill-holes in the current program that will assist in identifying further mineralisation around the drill-holes. Additional drill-holes are currently being designed at the Stricklands Prospect to follow-up on hole MAD71. The mineralisation in MAD71 is open to the west and north, and is associated with strong SAMSON and SQUID EM anomalies that remain largely untested in this area. A strong magnetic anomaly also covers this area, which is likely to represent prospective ultramafic stratigraphy.
SGQ’s share price surged in today’s trade by 49% to close at $0.335. In all, SGQ’s share price has surged from $0.13 in our coverage on 13th November – representing a 158% gain in less than a fortnight.
Technical Significance
Diamond drill-hole MAD71 at the Stricklands Prospect intersected 17m of nickel-copper sulphide mineralisation from 37.5m down-hole. It was drilled within a large SAMSON EM anomaly (200m x 150m) at Stricklands. The large SAMSON EM anomaly is also recognised by the low temperature SQUID FLEM survey completed over the area during 2009 by BHP Nickel West. The mineralisation is open to the north and west, where much of the EM anomaly remains untested.
Geochemical analysis from portable XRF readings in MAD71 supports the geological logging that the mineralisation is primary magmatic sulphides, based on high sulphur values. A conclusive determination of the nickel, copper, cobalt and PGE values of the sulphide mineralisation will be confirmed when laboratory assays are available.
Next Steps
A down-hole EM (DHEM) survey will be completed within MAD71 this week and further drilling at Stricklands will be prioritised after review of the survey data. The diamond drill rig has now mobilised to the Investigators Prospect. The first two drill-holes to be completed at Investigators will target off-hole DHEM anomalies to test for extensions of known zones of high-grade mineralisation. The diamond drill rig at site will continue drilling at Mt Alexander 24 hours a day, 7 days a week until the Christmas break (on or about 17th December).
EM Surveying
Two regional targets at Mt Alexander have been prioritised for follow-up exploration. MLEM surveys will be carried out at these targets following completion of the DHEM surveys currently underway.
A review of a HoistEM survey (helicopter EM system) completed by BHP Nickel West over E29/548 in 2005 has identified an EM anomaly that is co-incident with a magnetic anomaly on an interpreted east-northeast structural corridor. The magnetic anomaly could represent prospective ultramafics associated with an east-northeast corridor parallel to the Cathedrals Belt. A MLEM survey will be completed over the target that is located approximately 2.7km north of the Investigators Prospect, where no prior drilling has been undertaken.
A high-powered SAMSON EM survey was recently completed at Investigators West – an area that extends westwards from the Investigators Prospect and comprises a 2.5km strike length of the Cathedrals Belt. The survey area also included an additional 1km strike westwards across the Ida Fault. The SAMSON survey detected a discrete EM anomaly to the south of the main survey area and coincident with the Ida Fault. An east-west trending structure is also associated with the EM anomaly. A MLEM survey will be completed over this anomaly to provide further data to assist with modelling a target for possible drill-testing.
Figure 1: A map of the Cathedrals Belt (against high resolution Total Magnetic Intensity) showing the new regional targets as well as the multiple intersections of massive nickel-copper-cobalt-PGE sulphides ($M) at Investigators, Stricklands and Cathedrals, which have established recurrent high-grade mineralisation over a strike length of 3.5km. The high resolution magnetic data is set against TMI RTP magnetics from GSWA aeromagnetic surveys.
Summary
The results in MAD71 are outstanding, with thick widths of high-grade mineralisation at shallow depths. This obviously has favourable consequences in terms of a potential mining operation at Mt Alexander. SGQ has already established recurrent high-grade mineralisation over a 3.5km strike length within the Cathedrals Belt, with more mineralisation being identified within both the Cathedrals ultramafic and the footwall fault. The upcoming drill-holes offer more potential, with new targets at the mineralised Stricklands and Investigators prospects, as well as targets in unexplored areas like Anomaly 11 to the south of Cathedrals.
