Uranium junior Vimy Resources (ASX: VMY) has acquired an unexplored landholding believed to be highly-prospective for base metals and located next to its flagship Mulga Rock uranium project, 290km from Kalgoorlie in Western Australia’s Great Victoria Desert.
The acquisition was made through the company’s wholly-owned subsidiary Vélo Resources and comprises one granted exploration lease and several lease applications covering 1,700 square kilometres to the northeast of Mulga Rock.
Vimy said Vélo has gained “first mover advantage” through the lodgement of lease applications over the entire prospective sedimentary sequence along a belt which extends for 130km.
One of the exploration leases was granted in September and the remaining are expected to be approved in the coming months.
The target deposit type at the new acreage is known as sedimentary exhalative (SEDEX) base metals – a mineralisation which accounts for more than 50% of the world’s zinc and lead reserves and more than 25% of global production.
SEDEX deposits are characterised by their large size, high grades and significant silver credits.
Typical deposits globally include Red Dog in Alaska, Sullivan in British Columbia, and McArthur River in Mount Isa.
Vélo will conduct all exploration and development at the new project, as a precursor to its possible future divestment by way of farm-in, merger or initial public offering to Vimy shareholders.
“This new project presents a unique opportunity to apply modern exploration techniques across an entire geological province which, until now, has not been recognised as prospective for sediment-hosted base metals under shallow cover,” Vimy said of the acquisition.
“Vélo will leverage Vimy’s knowledge of local and regional geology and appropriate exploration techniques.”
The ownership structure of the base metals acquisition will allow Vimy to maintain its focus on uranium exploration and development at Mulga Rock as well as the recently-acquired Alligator River project in the Northern Territory.
Vimy now holds the largest granted exploration tenement package in the Alligator River uranium province – considered one of the top three uranium exploration districts in the world alongside Canada’s Athabasca basin, and the Chu-Sarysu and Syrdarya basins in Kazakhstan.
Meanwhile, a Mulga Rock definitive feasibility study released earlier this year confirmed its status as Australia’s largest and most advanced uranium project.
The DFS supported a low-risk, open pit mining operation with production of 3.5 million pounds of triuranium octoxide per annum for an initial 15 years, with a possible five-year extension if warranted through further drilling and subsequent studies.
Base metals potential
Vimy has also confirmed Mulga Rock’s byproduct potential for base metals.
A recent review of the project uncovered a base metals resource totalling 34.1 million tonnes grading 0.028% copper, 0.096% zinc, 0.048% nickel, 0.024% cobalt for 9,600t of contained copper, 32,700t of zinc, 16,300t of nickel and 8,200t of cobalt.
“Mulga Rock remains our flagship project,” Vimy managing director Mike Young explained.
“All our activities are [currently] focussed on obtaining offtake contracts and financing as well as continuing the secondary permitting process for construction and production [which includes] works approval, a project management plan, and mine closure plans.”
At midday, shares in Vimy Resources were down 2.94% to $0.066.