A surprise update on the size and quality of its WA manganese prospect lit a fire under the shares of tiddler explorer Black Canyon yesterday.
No wonder the little-known company’s shares surged 25% (to 45.5 cents) – it would seem that, if the new reserves figures hold true after more work, it will more than double Australia’s known reserves of manganese.
In the ASX statement, Black Canyon announced the further upgrading of the size of mineral resource and contained manganese at its Flanagan Bore manganese prospect in the eastern Pilbara region of Western Australia to more than 100 million tonnes of ore resource which has an estimated 11 million tonnes of contained manganese.
Now that is a pretty major upgrade for the Flanagan’s Bore area.
According to GeoScience Australia “All of Australia’s Ore Reserves of manganese ore in 2019 were attributable to Australia’s three operating mines (Woodie Woodie – which is nearby the new area in the eastern Pilbara, Groote Eylandt and Bootu Creek). Ore Reserves amounted to 91 million tonnes and beneficiated manganese ore production was 7.5 million tonnes,” GeoSciences Australia said in a summary of mineral resources.
GSA Australia said measured and indicated reserves of manganese totalled 287 million tonnes in 2019 (91 million measured, 196 million indicated).
America’s Geological Survey says Australia has 14% of world resources. Australia is the 4th largest producer, so if Black Canyon’s news is confirmed by further drilling, it is a world scale discovery and could lift the country’s reserves by a third (or more after more drilling of other prospects in the area).
Groote Eylandt in the Gulf of Carpentaria is the world’s largest and lowest cost mine. It is owned by South32. It has remaining reserves of 167 million tonnes, according to the Northern Territory’s Geological Survey.
Black Canyon doesn’t feature in many sweeps of exploration successes, but on what the company told the ASX yesterday it appears to have a large, high-grade deposit in the Pilbara, 400 kilometres southeast of Port Hedland and near Newman.
The company told the ASX that the previous mineral resource at the FB1 deposit at Flanagan Bore comprising 15 million tonnes @ 11.3% manganese (Mn, Inferred) “has been significantly expanded and upgraded to 104 Mt @ 10.5% Mn (Indicated) containing 11 Mt of manganese.”
“This represents a substantial increase of 89 Mt of total tonnage and 9 Mt of contained manganese from the previous Mineral Resource or a 580% increase in Mineral Resource tonnes,” Black Canyon said.
Black Canyon said the mineral resources defined at (the) LR1 and FB3 (areas) “have been estimated based on drill assay information received from the 4,312 metres of reverse circulation (RC) drill program completed in December 2021, in addition to 516 m of historic RC drilling from 2012.”
Flanagan Bore is part of the Company’s Carawine Joint Venture and is subject to a farm-in and joint venture agreement with Carawine Resources. Having earned a 51% interest, Black Canyon said yesterday it is now earning up to 75% in the Carawine Project tenements by sole-funding an additional $2.5 million of exploration expenditure.
Black Canyon Executive Director, Brendan Cummins, said in Wednesday’s ASX statement: “The Company is very fortunate that from our first drill program at Flanagan Bore, we have been able to deliver a large-scale, high quality manganese Mineral Resource.
“In my experience, this is uncommon and is testament to the robustness of the mineralisation we have discovered at FB3 and LR1. Defining an Indicated Mineral Resource of greater than 100Mt has more than exceeded our expectations at such and early stage for the project.”
“In addition the outcropping higher-grade zones averaging 12.8% Mn within this Mineral Resource exhibit impressive geological and grade continuity, both of which are extremely positive factors for resource optimisation and potential mining scenarios.
“The large tonnage resource also enables the Company to consider using elevated cut-off grades to increase the mine feed grade whilst maintaining sufficient tonnage for a long-life mining operation.”
“There also remains further upside at Flanagan Bore with several other manganese targets that have only been partly tested or remain untested such as FB1, FB5 and FB6 with the potential to deliver significant additional tonnage to the project.”
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Co-incidentally, Carawine shares didn’t trade yesterday (they would have been expected to follow Black Canyon shares higher).
Carawine though asked for trading in its shares to be halted until it can release the results of drilling at its Big Freeze gold prospect in the northeastern gold fields of WA which is in the company’s Tropicana gold discovery project area.
Carawine though is under takeover offer at 21 cents from QGold. That offer closes on April 22 and QGold has said it will not be extended.
