A review by Cannindah Resources (ASX: CAE) of its wholly-owned Mt Cannindah project in central Queensland has confirmed large resource targets and favourable commodity prices are sufficient to warrant continued exploration.
The review highlighted that major operators such as Mt Isa Mines and Newcrest Mining (ASX: NCM) had historically demonstrated interest in the project’s 77.2 square kilometres landholding through extensive exploration and drilling campaigns and the identification of significant in-ground value.
Current prices for copper, gold and silver are now considerably higher and market demand for the metals is rising, which the review said could underpin a new era of exploration for Cannindah at areas which have been previously underexplored.
The project’s resources were also re-examined as part of the review, with the estimated metals inventory sitting at approximately 90,000 tonnes of copper, 60,000 ounces of gold and over 2.5 million ounces of silver.
“The currently identified resources and their locations clearly demonstrate that Cannindah Resources is dealing with a large-scale, intrusive-related porphyry/breccia-style system [at Mt Cannindah],” the review stated.
“There are large areas within and adjacent to the granted mining leases that are underexplored, particularly in regard to drilling where significant grade and thickness intersections require follow up.”
The review showed some of the past drill intercepts from Mt Cannindah have demonstrated thicknesses of mineralisation and overall copper and gold grades.
Most of these have been at Mt Cannindah itself and the Cannindah East gold prospect and sit within defined measured, indicated or inferred resource shells.
Examples from within the Mt Cannindah resource include 82m at 2.32% copper, 0.88 grams per tonne gold and 42.1g/t silver from 28m; 66m at 1.99% copper, 0.52g/t gold and 33.4g/t silver from surface; 118.3m at 1.99% copper, 0.52g/t gold and 33.4g/t silver from 2.39m; and 60.96m at 1.66% copper, 1.28g/t gold and 35.3g/t silver from surface.
Examples of high-grade zones from Cannindah East include 36m at 8.65g/t gold from 2m; and 52m at 4.90g/t gold from surface.
There are less defined non-JORC resources at the United Allies, Monument-Lifesaver and Appletree targets, returning mostly wider, lower-grade copper and gold intercepts extending outside of the inferred resources and providing exploration upside and future resource extension possibilities.
Examples from within the Mt Cannindah resource include 139m at 0.71% copper and 149.04m at 0.48% copper from surface; 163.16m at 0.51% copper from 6m; 77.72m at 0.53% copper from 13.72m; and 207.6m at 0.17% copper from 4.4m.
Assays from outside of the Appletree resource include 122m at 0.27% copper from 1m.
According to the review, the wide intercepts of lower-grade copper are “worthy of more attention than may have been previously assigned” in the current price environment.
The review of Mt Cannindah follows a previous comprehensive project review in 2015 which identified and evaluated a number of high-quality copper-gold-silver exploration target areas throughout the mining leases and surrounding area, with a goal of imparting value to the project by moving to drill testing.
Cannindah executive chairman Tom Pickett said the timing was right to advance the project.
“There is a scarcity of copper-gold-silver projects such as Mt Cannindah that contain identified resources with an array of potential areas to test which could deliver immediate exploration success,” he said.
“Whereas the tight capital environment [during our last review] stalled drill testing, we believe the timing is now ideal to expand on the known resources with judicious step-out drilling programs and to move on the drill-ready prospects previously worked up as drill targets.”