CGN Resources lists on ASX, begins drilling at IOCG targets in West Arunta
The eyes of the mining world are focused on the red-hot West Arunta region of Western Australia where freshly-floated CGN Resources (ASX: CGR) has started drilling two holes to test copper-gold targets identified by earlier geophysical and geochemical analysis.
A long-term explorer in the area close to the Northern Territory border, CGN is listing today after a $10 million initial public offering (IPO) to advance work on the 948 square kilometre tenement surrounding its flagship Webb Project.
Initially seen as having potential for a major diamond discovery, the focus has shifted to other targets, especially the potential for iron oxide copper gold (IOCG) systems which host some of the biggest mines in the world, including BHP’s giant Olympic Dam project.
Exploration momentum in West Arunta
Since CGN started work in West Arunta in 2007 the area has become a hotbed for explorers, led by WA1 Resources (ASX: WA1) and its world class niobium rich carbonatite discoveries in tenement which abuts CGN’s property to the north.
Interest generated by the work of WA1 and other companies in a region long overlooked has attracted a flood of major (and minor) explorers.
As well as having WA1 as a northern neighbour Rio Tinto (ASX: RIO) has taken out a tenement to the west, IGO (ASX: IGO) is active in the east while Encounter, Rincon and Cerberus are active in the ground around CGN’s 86% owned Webb tenement.
What’s attracting explorers is a growing appreciation of the favorable geological setting for IOCG mineral deposits, along with the potential for nickel and rare earth targets.
The drilling which started last week will see two 600 metre diamond holes testing the Tantor and Surus targets with funding for both aided by a $400,000 grant under the exploration incentive scheme of the WA Government.
Oversubscribed IPO
CGN chairman, Darryl Harris said in the company’s $10 million oversubscribed IPO which issued shares at 20c that the Webb project had yielded (from earlier exploratory drilling) highly anomalous copper grades up to 0.23% copper, nickel up to 1.15% and rare earth elements up to 0.71% total rare earth oxides.
That previous work, in a location 625km west of Alice Springs and 1100km south east of Port Hedland, has been factored into CGN’s exploration program which includes multiple drill-ready IOCG targets, along with magmatic nickel, carbonatite and diamonds.
Harris said the focus of work in the Webb project area, which has already yielded what is believed to be Australia’s largest kimberlite field, shifted to IOCG targets after the flying of a Falcon (airborne gravity) survey last year which identified “multiple, high-quality, targets.
“The Shep (nickel) and Hathi (rare earth elements) targets as well as drill-ready IOCG targets at Tantor, Surus, Snorky and Horton were identified in the Falcon survey,” Harris said.
Accelerated exploration
In a statement to coincide with today’s listing, CGN managing director, Stan Wholley, said the capital raising cleared the way for an acceleration of an already exciting exploration program which has been designed under a land access agreement with the Tjamu Tjamu Traditional Owners.
CGN was the first company to negotiate a native title agreement with the Tjamu Tjamu as far back as 2013, long before the West Arunta attracted the attention of other explorers.
“We’ve just started to drill test our IOCG base metal targets at Tantor and Surus,” Wholley said. “This work will provide valuable insight into the geology of our first two copper targets with follow-up drilling next year as well as expanding our focus for magmatic nickel sulphides and rare earth elements in the second quarter of next year.”