R3D Resources (ASX: R3D) is jumping on the copper bandwagon to take advantage of its optimistic outlook, with a $4.25 million IPO to acquire a portfolio of assets in Queensland’s north.
The company proposes to acquire Tartana Resources which holds a large portfolio of exploration and mining projects in the Chillagoe region.
R3D aims to become a significant copper-zinc producer through advancing the assets as well as exploring the copper-gold-silver-cobalt prospects.
To acquire the assets, R3D is raising $4.25 million via the issue of 21.25 million shares at $0.20 each.
Shares have a one-for-five option that is exercisable at $0.40 within five years.
Under the deal, R3D plans to re-list on the ASX on 7th July 2021.
Tartana copper-zinc project
Tartana holds several projects in Queensland’s Chillagoe region with various stages of exploration.
The more advanced asset is the Tartana copper and zinc project which comprises four mining leases and a partially rehabilitated open pit.
Historically, the mine produced 1.2 million tonnes at 0.8% copper oxide. However, deeper copper sulphide mineralisation has been identified below the pit, but only partially explored.
As well as the pit and leases, the project has heap leach pads and a solvent extraction plant which are currently on care and maintenance. It also has an accommodation camp on-site.
Within this wider project are smaller projects: Tartana copper oxide, Queen Grade zinc, Deeper copper sulphide and Valentino, which is prospective for copper, gold, silver and cobalt.
Bellevue and Dry River
Other assets include Bellevue and Dry River which contain at least 10 copper-gold prospects.
The projects cover 25km of the OK member stratigraphy and surround historic mines and a nearby smelter.
An application was recently made for a licence that includes the OK mine, which produced 80,000t at 9.2% copper between 1901 and 1909.
Other north Queensland assets
Another asset in the portfolio is Dimbulah, which hosts porphyry copper. It has been subject to historic drilling, mapping and geophysics.
Two mining lease submissions and an exploration licence application have been made over the Mountain Maid and Cardross copper-gold projects.
Using a 2004 resource estimate for Mountain Maid, an exploration target has been calculated to a 50m depth.
This range is between 900,000t at 0.57 grams per tonne gold for 17,000 ounces, and 6Mt at 0.31g/t gold for 59,000oz.
At Cardross, previous production generated 2,000t of copper, 2,200oz gold and 87,000oz silver from the Chieftan mine.
Another asset Nightflower has an exploration target estimated from a historic resource. This target is 0.21-0.59Mt at 180-200g/t silver, 3.5-5% lead, 1.7-2.2% zinc and 0.1-0.2% copper.
As well as these projects, R3D is securing Newcrest Mining’s 1,250sq km Bulimba project with a sale and purchase agreement executed.
Central Queensland and Tasmania
R3D’s also has two early-stage projects in central Queensland.
Mount Hess is prospective for copper, while Amber Creek hosts molybdenum, tin and tungsten.
Another project is located in Tasmania’s west coast near Zeehan.
It has a JORC indicated resource of 469,000t at 13.3% zinc, 1.7% lead and 53g/t silver. It is a low-grade furnace slag/matte project.
Tartana has exported four 22,000t trial shipments from the project to South Korea for processing.
A recent permit was granted to excavate and screen a further 335,000t of ore from the project for export.
Once listed, R3D is planning to generate short term cash flow by starting copper sulphate production at Tartana using the existing infrastructure.
Other upcoming activities will comprise drill testing targets at Bellevue, Dry River and Nightflower.
R3D also intends to advance the mining lease and exploration licence applications for Mountain Maid and Cardross.
An airborne electromagnetic survey will be undertaken at the Bulimba tenements, with reconnaissance activities to be carried out at Dimbulah.
Over in Tasmania, R3D will continue exports from the Zeehan project.
R3D’s strategy is to take advantage of gold’s current strong fundamentals and the positive outlook for copper.
Driving the optimistic outlook for copper is its critical role in the accelerating electric vehicle space.
R3D says a number of commodity analysts believe copper is the “safe way to play the electric vehicle revolution”.
A rapid increase in copper demand is expected at a time when mine supply decreases due to aging operations, lower grades and higher costs.