Hitting the right stuff in Mt Isa
Summary Key Points
High grade copper at Jubilee: HMX has reported the first drilling results from the first phase of drilling on the new Mt frosty Joint Venture with MIM. The best intersection from across the 9 holes of the Phase 1 program was 5 metres at 7.34% copper (Cu) and 3.75g/t gold (Au) from 35 metres in HJRC009 within an envelope of 8 metres of 4.72% Cu and 2.37g/t Au from 33 metres. Intersections of this tenure are not unheard of in the Mt Isa Region, with high grade copper known from the original Mt Isa deposits but also from Rocklands and Millennium.
Only a small area tested so far: The recent drilling program followed up on previously identified copper and gold mineralisation from a JV between Glencore and Chinalco. Mineralisation now extends over a 400m strike length and is generally close to surface at this location. The drilling at Jubilee represents only a small portion of the Mary Kathleen Shear Zone and no drilling exists beyond the boundaries of the known mineralisation.
HMX back drilling already: HMX has recently announced the recommencement of drilling at Jubilee following up on the encouraging results from the Phase 1 drilling program. A program of 13 holes has been devised for an additional 1,500m to better define and extend the high-grade copper-gold mineralisation. This should lead to news flow on the results around mid to late February for the first batch of results.
Opportunity to expand known mineralisation envelope
HMX’s modelling of the mineralisation suggests a shallowly- dipping or plunging shoot with potential for further shoots to the north. The proposed drilling extends to the north but we also note the long section that indicates that mineralisation extends south into HMX’s 100% owned tenement, at depth.
Early days, but a useful partner in Glencore
It’s early days in the exploration of Jubilee and the Mary Kathleen Shear Zone but with Glencore as a partner in the JV, with their extensive processing infrastructure nearby, HMX has a potential ready-made monetisation route should a high-grade zone be mineable at Jubilee, or elsewhere on the Mary Kathleen Shear.
HMX strategy in Mt Isa still playing out
We have long held the view that HMX’s strategic holding would be recognised by the major mining houses. This has proven to be correct with Glencore now, through its MIM subsidiary, but also by Newmont previously over a number of chosen project areas. The difficulties for HMX over the past few years lay in the prioritisation of their exploration spend, given their vast land holding in the district and the sheer number of opportunities presenting themselves.
Entering into exploration JV’s with major mining houses was an obvious solution, but this has taken time to unfold. HMX now need to seize the opportunity at Jubilee, maintain momentum and quickly build on the early success. The quick recommencement of drilling at Jubilee in Phase 2 should assist and will provide on-going newsflow during Q1 2018.
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