BHP pulls ahead of rival Rio Tinto with a major copper find near Olympic Dam

BHP ASX copper Olympic Dam South Australia Rio Tinto mining
BHP has intersected 425.7m at 3.04% copper, 0.59g/t gold, 346ppm uranium and 6.03g/t silver within the Olympic province in South Australia.

The copper race is on between long-time rivals BHP (ASX: BHP) and Rio Tinto (ASX: RIO), with BHP announcing it had pulled out of the ground what some experts call the thickest high-grade copper intersection seen in many years near its Olympic Dam mine in South Australia.

The mining giant reported a whopping mineralised intersection of 425.7m comprising copper, gold, uranium and silver from recent drilling within the state’s Olympic iron-oxide, copper, gold (IOCG) province.

Ending in mineralisation, the huge intersection graded 3.04% copper, 0.59 grams per tonne gold, 346 parts per million uranium and 6.03g/t silver.

Within that 425.7m was a higher-grade 180m interval comprising 6.07% copper, 0.92g/t gold and 401ppm and 12.77g/t silver.

Other notable results were 406m at 0.66% copper, 0.35g/t gold, 266ppm uranium and 2.09g/t silver, and 124.5m at 0.52% copper, 0.48g/t gold, 85ppm uranium and 3.37g/t silver.

BHP is now firming up a drilling program for early next year to unlock this massive discovery.

Argonaut soars on nearology

Today’s news sent nearby copper explorer Argonaut Resources (ASX: ARE) soaring with the company attracting a speeding ticket from the ASX after its share price sky-rocketed more than 30% during trade from $0.018 to a high of $0.024.

Commenting on BHP’s find, Argonaut chief executive officer Lindsay Owler said it was a “spectacular discovery” and could possibly rival BHP’s own Olympic Dam mine if the size and processing economics were right.

He said the 180m at 6% copper was one of the “longest highest-grade hits” the copper industry has seen in a long time.

“The hole ended in mineralisation so who knows how long that total intercept of 425.7m could actually turn out to be.”

IOCG’s geophysical signatures

Mr Owler is particularly interested in the geophysical signature of BHP’s discovery, which he said has similarities to Argonaut’s own anomalies within its Torrens copper project about 40km away.

“With these South Australian-style iron-oxide, copper, gold (IOCG) orebodies, they all start off having the iron component being magnetite, which has a strong magnetic signal and is also dense,” he explained.

“Then, in the alteration process, which brings in the copper mineralisation that magnetitic iron is converted to haematitic iron and the copper comes in.”

“Hematite is an iron mineral that’s entirely nonmagnetic, but it’s still dense. So, in searching for IOCGs, you are looking for areas that were previously magnetic and have been converted into density-only or gravity-only anomalies,” Mr Owler noted.

He added they were often in proximity to magnetitic bodies.

Mr Owler pointed out that Argonaut’s Murdie and West Lake Torrens prospects, within the Torrens project, were of particular interest because they possess the “exactly the same flavour” in geophysical signatures as BHP’s discovery.

Olympic province explorers

Aeris Resources (ASX: AIS) owns a 70% interest in the Torrens project, with Argonaut’s holding the other 30%.

Torrens is about 75km from Olympic Dam. Previous drilling at the project returned 246m at 0.1% copper.

In 2019, the joint venture plans to carry out drilling over the next two years.

Aeris also rocketed on news of BHP’s discovery ending the day at $0.16 – up almost 27%.

In addition to BHP, Argonaut and Aeris, the Olympic province is home to other IOCG explorers including OZ Minerals’ (ASX: OZL), which owns the Prominent Hill mine and the advanced and Carrapateena project, which is under construction.

Rex Minerals (ASX: RXM) is progressing the Hillside project where an extended feasibility study and a Chinese feasibility study are nearing completion.

Once the copper market improves and the studies have been completed, Rex is looking to finance and develop the project.

Red Metal (ASX: RDM) has the Punt Hill and Pernatty Lagoon joint venture with OZ Minerals. A maiden 6,000m drilling campaign is underway to test six targets.

Not to be left behind, Cohiba Minerals (ASX: CHK) has begun reviewing its Pernatty and Peninsular projects in the province after Red Metal and OZ Minerals kicked-off drilling at adjacent tenements.

Cohiba said it has been encouraged by preliminary geochemcial sampling results.

Meanwhile, BHP’s own Olympic Dam mine in the area is known as one of the world’s largest multi-mineral deposits and is projected to produce around 180,000t of copper in the 2019 financial year.

Pilbara heats up on copper discoveries

Across the Nullabor Plain in Western Australia, stocks in the Pilbara’s Paterson Province have gained a lot of interest on rumours Rio had uncovered a huge copper discovery across its tenements about 12 months ago.

Rio is yet to confirm or deny the rumours, but Greatland Gold (AIM: GPP) added fuel to the fire last week after reporting it had unearthed a “world-class” 275m thick intersection at its wholly-owned Havieron project.

Havieron is close to Rio’s purported copper discovery and the 275m intercept was from the first hole of Greatland’s drilling campaign.

The 275m intercept was a combination of upper and lower mineralised zones from a depth of 459m.

According to Mr Owler, these latest discoveries, including BHP’s find, were a result of persistent deeper drilling in two major underexplored regions.

In addition to Rio and Greatland, several other copper explorers are either actively searching their tenements or pegging up more land in the Paterson Province, including: Antipa Minerals (ASX: AZY), Fortescue Metals Group (ASX: FMG), Newcrest Mining (ASX: NCM), Alloy Resources (ASX: AYR), Metalicity (ASX: MCT), Sipa Resources (ASX: SRI) and Red Metal (ASX: RDM).

Copper market fundamentals

News of copper discoveries has revived investor interest in the commodity, as the copper market stares down a future of rising consumption and a dry project pipeline.

Mr Owler pointed out that although the copper price had hovered at around US$2.80 per pound in recent months, this was purely due to trade war speculation between the US and China.

“The fundamentals of the copper market in the background are stronger than ever. The annual increases in demand and consumption remain, and the corresponding annual increases in supply just don’t exist,” Mr Owler explained.

“As soon as we start seeing a serious tightening of inventories around the world, I think the copper price has got to go.

“It’s almost a sure bet,” Mr Owler said.

    Join Small Caps News

    Get notified of the latest news, interviews and stock alerts.