Sunday, 31 July 2011

Navaho Gold identifies gold-bearing system and rich new targets at Stevens Basin

Navaho Gold (ASX: NVG) has intersected gold at the Stevens Basin project in Nevada, U.S., with the project strategically located in a similar structural setting as Barrick Gold’s (NYSE: ABX) Archimedes/Ruby Hill 2.23 million ounce gold mine - which is 9 kilometres to the north-east.

Navaho said that all 14 holes returned intercepts containing anomalous (> 10ppb or 0.010g/t) values of gold, and of particular importance is the thickness of the anomalous gold interval in SB11‐09 of 109.7 metres from 1.5 metres, indicating a significant gold-bearing hydrothermal system has been identified.

Mark Dugmore, chief executive officer of Navaho, commented "the results from the first pass drilling at Stevens Basin are considered to be very encouraging in the context of exploring for Carlin-style mineralisation.

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"They are typical in terms of gold grade and pathfinder element association of leakage haloes peripheral to and above known deposits close by.
"The results warrant further follow‐up drilling in an attempt to focus our effort toward higher grade mineralisation.”

A major positive for the project, in addition to the elevated gold intercepts - is that several holes encountered zones of anomalous arsenic, zinc, barium and thallium levels.

These included up to 0.15% As over 9.1 metres, and 0.13% As over 36.6 metres, with anomalous zinc of 2.03% Zn over 7.6 metres.

Other results included anomalous barium 0.47% Ba over 87 metres, 0.84% Ba over 6.1 metres, 0.77% Ba over 7.6 metres, along with thallium of 2.4ppm Tl over 12.2 metres; 1.5ppm Tl over 74.7 metres; 3ppm Tl over 7.6 metres, and 1.5ppm Tl over 83.8 metres.

The importance of these elements is that they are strong indicators of a Carlin-style system.
Navaho has already planned a new drilling phase to be conducted in the September quarter of 2011, which will target additional geochemical and structural features.

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ABM Resources unveils 427m gold intersection at 1.67m oz Buccaneer

ABM Resources (ASX: ABU) continues to deliver some project significant results from the 1.67 million ounce Buccaneer Porphyry Gold Deposit, located within the company’s Twin Bonanza Gold Camp Project.
Extensional drilling continues to grow the deposit, with the recent highlight a very broad 427 metres at 0.52 grams per tonne (g/t).

Importantly within this major intersection are multiple higher grade zones, including; 39 metres at 2.22g/t gold, 32 metres at 1.44g/t gold and 35 metres at 1.20g/t gold.

Further complimenting these results is for the first time ABM Resources has observed high grade visible gold in the core in an individual 1 metre sample.

The impact of the bonanza grade 1 metre at 53.1g/t gold, is that the discovery is a strong indicator of readily recoverable gold available within this section of the system.

Darren Holden, managing director, commented on the discoveries and said, "our first diamond core hole, is one of our deepest holes ever and contains substantial mineralisation over a 427 metre length extending mineralisation vertically approximately 130 metres on this section.

"Furthermore, the Buccaneer Deposit has been extended further to the south east with the excellent results."
The diamond hole where the latest gold intersections were discovered was drilled as a near step-out twin to confirm Buccaneer’s western zone mineralisation.

ABM Resources said the twinning of select reverse circulation holes with diamond core drilling was advised by SRK (Australia) Consulting Pty Ltd during their resource estimation work on Buccaneer.

The diamond core hole intersected several styles of mineralisation including chlorite-quartz stockwork veins, flat-lying high grade quartz veins and high sulphide heavily altered areas.

The hole was also assayed for full multi-element analysis, with results pending.

The Twin Bonanza Gold Camp is located about 22 kilometres south of the Tanami Road and 14 kilometres east of the Western Australia – Northern Territory border.

The project spans the highly prospective “Trans Tanami Structure” an inferred regional / tectonic geological feature which hosts numerous gold deposits including Newmont’s (NYSE: NEM) multi-million ounce Callie Gold Mine.

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Toro Energy pilot plant testwork part of continuous assessment of Wiluna Uranium Project

Toro Energy (ASX: TOE) in another step towards unlocking the potential of the Wiluna Uranium Project, and has kicked off a pilot plant testwork program.
This latest move by Toro comes hot on the heels of the public review phase milestone which was reached less than a fortnight ago, with the company entering the public exhibition phase of government assessment from 25 July, 2011.
Significantly, Wiluna will be the first of Western Australia’s modern era uranium projects to reach this critical stage and the WA government is known to be supportive of the project which has the potential to become world class.
The new testwork is part of the company's continuing assessment of Wiluna, which involves the use of ore samples taken during last year's resource trial pit, and is being undertaken off-site in compliance with all relevant government approvals.
This follows the successful completion of detailed benchscale processing testwork which has confirmed the viability and basic parameters of the alkaline agitated leach process.
Toro outlined the program of pilot testwork which involves a pilot plant process test, which will run a continuous processing operation on a pilot scale at around half a tonne of ore per day, or 20 kilograms of ore per hour.
The object of the testwork is to finalise design parameters under continuous flow conditions for final feasibility; produce sample product for converter delivery and sample testing; and optimisation of operating parameters.
The testwork involves two ten day series of continuous process runs, with results forecast to be received by the end of August.

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Richmond Mining raises A$4.5m in private placement and launches SPP

Richmond Mining (ASX: RHM) has raised A$4.5 million from a placement of 14.1 million shares at $0.32, with the funding injection to progress the Buena Vista iron project in Nevada, U.S.
Additional funding will also be raised by Richmond after launching a share purchase plan at the same price, which will allow shareholders to purchase an additional parcel of up to $15,000 worth.
The company is actively pursuing project finance for the development of Buena Vista, with the new funding injection to be applied towards the outstanding balance of US$2,812,500 for the acquisition of three rod mills.
Funds will also be used as general working capital at the project, that will be directed towards both securing the remaining Buena Vista permits and the undertaking of detailed engineering design work as a precursor to finalising the project’s EPC contract.
Richmond last month received some positive news at Buena Vista, with a Feasibility Study at the West Deposit delivering:
- Capital cost of US$161 million;
- IRR of 41% (using a conservative average FOB concentrate price for the initial 10 years of US$110);
- Average annual high grade iron ore concentrate production of 1.75 million wet metric tonnes grading 67.5% total iron, with very low impurities over an initial 10 year mine life;
- Free after tax cash flow of US$476 million from the first 10 years of operations; and
- First concentrate delivery targeted for December quarter 2012.

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Thundelarra Exploration in copper gold maiden drilling near Sandfire Resources DeGrussa deposits

Thundelarra Exploration (ASX: THX) is targeting copper and gold at the strategically located Curara Well project, which is located just 2.5 kilometres from the Sandfire Resources NL’s (ASX: SFR) DeGrussa deposits.
Thundelarra said the project area has poor outcrop and has seen very little past exploration, with work carried out by the company to date locating prospective structures and prospective volcanic and epiclastic rocks displaying volcanogenic massive sulphide (VMS) style alteration.
The initial reverse circulation drilling program will comprise up to 20 holes for 2,500 metres, and has been designed to test a number of the previously identified VTEM anomalies, and the central part of the geochemical copper anomaly.
The significance for the first phase of drilling is that results will provide important geological information that will help the targeting and prioritisation of future programs.
Thundelarra added that the powerful combination of prospective structure, host rocks, conductive anomalies, copper anomalism, along with the proximity to a major deposit, rank Curara Well as a high priority target that will be a key component of the company's exploration effort over the coming year.

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TNG Limited in pre-open pending Mount Peake development announcement

TNG Limited (ASX: TNG) has been granted a trading halt by the ASX pending an announcement on the development of the Mount Peake Iron-Vanadium Project, and a funding update, with the company's shares placed in pre-open.
TNG has not yet elaborated on what the development means, but last week ticked a major box for the project by entering initial negotiations with a number of parties on key infrastructure requirements.
The significance of Mount Peake is that the project could potentially be one of the lowest-cost ferrous projects in Australia.
Operator of the Adelaide-to-Darwin rail line, Genesee & Wyoming Australia Pty Ltd, has indicated through preliminary talks that the line can accommodate the transportation of product from Mount Peake to the Port of Darwin.
Once TNG's requirements have been better defined in the current PFS, Genesee & Wyoming has indicated its willingness to work with the company to negotiate commercial arrangements for access to the rail line.

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African Energy Resources appoints general manager for southern African coal projects

African Energy Resources (ASX: AFR) has appointed the experienced David Scott as general manager of projects, with Scott responsible for managing the development of the company's coal projects in southern Africa.
Scott who is based in Botswana - has over two decades of experience with seven years at BHP Billiton (ASX: BHP).
Importantly Scott has experience in southern Africa, and most recently held senior project management roles in the expansion project at the Morupule Colliery in Botswana, currently the country’s only operating coal mine.
Scott will initially be responsible for delivering Feasibility Studies at the company's Sese coal project.
At Sese - earlier in the year African Energy reported and initial resource of 2.73 billion tonnes of thermal coal.
The coal occurs in one main seam which averages 14 metres in thickness over an area of 110 square kilometres, and most importantly is close to surface, which is expected to be amenable to low strip‐ratio open pit mining.
The main seam has been subdivided into an Upper and Lower seam on the basis of shale content.

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Thor Mining in A$612,000 placement for gold exploration at Dundas and Spring Hill

Thor Mining (ASX: THR, LON: THR) has raised UK£410,000 from the placement of around 30.6 million shares at £0.0134 - equating to a funding injection of A$612,000.
The placement is expected to be finalised by the end of this week, and was conducted within the company's 15% placement capacity.
Thor said funds will be used to fund gold exploration at Dundas in Western Australia and Spring Hill in the Northern Territory.
The capital injection will also help progress the Molyhil Tungsten Molybdenum project in northern Australia, where drilling and importantly an update to the 2007 Feasibility Study are in progress.

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Crescent Gold shareholders continue to accept Focus Minerals takeover offer

Crescent Gold (ASX: CRE, TSX: CRA) is currently 47% held by Focus Minerals (ASX: FML) as Crescent shareholders continue to accept the Focus takeover offer - which was recently extended until Monday 15th August 2011.
The two companies jointly announced in June this year that they have agreed to merge by way of a conditional off-market takeover bid by Focus.
The transaction will allow Focus to become one of Australia's top five gold producers, with targeted annual production of 230,0000 ounces.
The JORC Resource base of the new Focus would be 4.3 million ounces, with strong growth potential across two major Western Australian mining regions.
Highlighting the potential of Crescent for Focus, is that Crescent last month announced gold production forecasts exceeded guidance by 8.5% in the June quarter, producing 23,871 ounces for a gross value of around US$36 million, based on a spot of US$1500.
Crescent has recently also been receiving some encouraging results from diamond core drilling at Apollo, Aurora and Calypso gold resources, which form part of the broader Laverton gold project.
During the June quarter Crescent announced a maiden probable gold reserve of 54,000 ounces near surface at Apollo Deposit, where mining operations have been fast tracked and are scheduled to commence in the September quarter of 2011.

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Friday, 29 July 2011

Gold Resource Corp declares 13th dividend

Gold producer Gold Resource Corp (AMEX: GORO) reported Thursday it will be distributing its thirteenth special cash dividend to shareholders, benefiting from the start of commercial production at its El Aguila project last July.

The cash dividend, which has been increased to $0.04 per share, will be paid to shareholders of record as of Aug 11, payable on Aug. 23, 2011. The dividend, the thirteenth in as many months since commercial production, is a direct result of cash flow generated from the company’s El Aguila operations, located in the southern state of Oaxaca, Mexico.

The total dividends declared since production now stands at 43 cents per share.

Riverside, Mexigold start drill programs on gold projects in Mexico

Mineral explorer Riverside Resources, Inc. (CVE: RRI) on Thursday said its partner Mexigold Corp. (CVE: MAU) has begun drill targeting programs at the Catrina and Pedernal gold projects in Durango, Mexico.

Vancouver-based Riverside said the exploration program aims to increase discovery potential building-on work finished during the Kinross-Riverside Alliance.

The programs will include soil and rock chip sampling, as well as ground magnetics, inverse-polarity geophysics surveys and trenching to refine targeting for the first phase of drilling on each property.
After the work programs at Catrina and Pedernal a sampling program is expected to begin at the Escondida. All three properties are located in a highly productive Mesa Central Region of Mexico.

Thus far, 827 soil samples were collected and have been sent to the lab for assaying, Riverside said. Further rock sampling and a trenching program will test the degree of alteration and mineralization in areas of shallow cover.

Final drill planning, environmental permitting and mobilization are expected to follow the initial phases of this work program with drill testing expected to start in the fall.

Additionally, an induced polarization program consisting of 16 line kilometres will be completed at the Pedernal project, as well as geochemistry sampling, mapping and trenching work.

Further, planned work on the Escondida property will include a targeting program to delineate the proposed drill program on the property.

This will include assaying 1,685 soil samples already collected, further rock chip sampling, ground magnetics, and a continuation of the inverse-polarity geophysics survey that has identified an east-west striking trend through the main drill target zone.

The planned drill testing at Escondida will be carried in the second year of the work program.
Under the joint venture deal, Mexigold can buy a 75% stake in the Durango properties if it spends $4 million on exploration within 36 months, make cash payments of $500,000 to Riverside and issue 2.6 million shares of Mexigold.

Also included in the exploration commitments, Mexigold must drill a minimum of 3,000 metres on the Durango properties in 12 months from the date of the agreement.

"Riverside continues to unlock value by leveraging the strength of its partnership network to advance projects toward discovery,” said Riverside’s Chief Executive, John-Mark Staude.

“The work programs developed with Mexigold have been designed to increase discovery potential and forward the projects toward near-term drill testing.”

Millrock intersects 4.86 g/t gold at Uncle Sam property in Alaska

Millrock Resources Inc (CVE:MRO) announced Thursday it intersected up to 4.86 grams per tonne (g/t) gold at its Uncle Sam gold project, located in the Tintina Gold Belt in Alaska.

The project generator announced the results of assays covering 621 metres in four holes at the Wolf prospect on the property.

Highlights from the drill campaign include 11.4 metres grading 4.86 g/t gold in hole WLF-002, and 2.74 metres grading 3.63 g/t gold in hole WLF-001.

These results, which also include 3.05 metres grading 3.27 g/t gold in hole WLF-003 and in hole WLF-004, 2.13 metres grading 1.81 g/t gold, confirm the presence of a strong, near-surface gold mineralization along the northwest-southeast- trending strike length. It is also open at depth.

This first phase of drilling concentrated on the southern end of the claim block and targeted a strong gold-in-soil anomaly measuring more than 2,000 metres long and over 1,000 metres wide.

The wolf prospect, where historic drilling intersected 4.45 g/t gold over 15.54 metres (USRC-22) and 13.72 metres grading 1.34 g/t gold (USR-055), is close in proximity to the Naosi zone owned by Sumitomo Metal Mining Co Ltd.

The Naosi zone recently announced an intersection of 7.92 metres grading 7.8 g/t gold and 19.7 g/t silver. Since the two zones are oriented along a similarly trending structure, Millrock said it suggests the possibility of a larger gold mineralization.

The Uncle Sam property is a joint venture between Millrock and Crescent Resources Corp (CVE:CRC), with Millrock managing the exploration and Crescent funding the project.

Crescent has an option to purchase a 100% interest in Millrock's rights to the property, subject to royalties, in exchange for US $2.5 million in exploration expenditures, $300,000 in cash and the issuance of 13% of Crescent common stock to Millrock, which already owns 5% of the company.

Millrock, whose stock on the TSX-Venture rose 3.13% to trade at $0.66 per share as of 1:48 pm EDT, also said it completed five diamond drill holes at the Lone Tree prospect, located northwest of the Wolf zone. Assays for these holes are pending.

Image Resources acquires remaining 30% stake of Cooljarloo heavy mineral sands JV

Image Resources (ASX: IMA) has purchased Metal Sands Pty. Ltd.’s remaining 30% interest in the Cooljarloo Joint Venture for $100,000 cash plus 3 million ordinary fully paid Image shares, escrowed for twelve months.

Image now owns 100% of Cooljarloo, located in North Perth Basin of Western Australia, and the company considers the consolidation will simplify future project financing.

The company said "the relativity of the foreign exchange rate to heavy mineral commodity pricing has materially improved in the last six months, which augurs very well for the commercialisation of the North Perth Basin Project."

The Cooljarloo prospect adjoins the ground held by TiWest’s Cooljarloo heavy mineral sands mine and is situated on heavy mineral strandlines extending northwest from the mine.

The prospect contains the Atlas deposit which is 7 kilometres long and up to 400 metres wide, and is one of the better shallow, high-grade resources identified in the North Perth Basin project.

Atlas has an Indicated Resource estimate of 14.6 million tonnes at 6.2% heavy minerals with 910 000 tonnes contained heavy minerals, 102 000 tonnes of zircon, 66 000 tonnes of rutile + leucoxene and 555 000 tonnes of ilmenite. Other deposits at Cooljarloo include Titan, Calypso and Telesto.

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Thursday, 28 July 2011

Legacy Iron Ore's high iron recoveries from Mt Bevan to be included in independent valuation

Legacy Iron Ore (ASX: LCY) has reported that National Mineral Development Corporation (NMDC) has instructed its independent experts to expand their scope of work on the Mt Bevan Iron Ore Project to incorporate the average iron concentrate grade recoveries of 69.8% into their valuation of Legacy.

Legacy has entered into a Memorandum of Understanding with NMDC, a Government of India owned public enterprise under the control of the Ministry of Steel, to develop the Mt Bevan project and plans to sell up to an equity interest in Legacy, based upon an independent valuation.

The DTR results announced on July 20 indicated an average iron concentrate grade of 69.8% and low impurity levels and will be included into a valuation report to be presented to the board of Legacy. These results confirm the potential for the project to deliver blast furnace or direct reduction grade quality pellets.

Sharon Heng, Legacy chief executive officer, said “although the incorporation of these new DTR results will add an additional 2-3 weeks to the overall timing, we believe that the high concentrate grade and low impurity levels justifies the additional wait, given it is anticipated to increase the underlying valuation.”

The company anticipates that the independent valuation will now be completed during the week commencing 8 August 2011, with the NMDC approved formal offer to be tabled to the Legacy board by 22 August 2011.

NMDC is India’s single largest iron ore producer, with reported resources in excess of 800 million tonnes. The agreement with Legacy will introduce a significant Indian iron ore producer and developer, with the relationship expected to lead to the development of a mine at Mt Bevan, along with acquisition of complementary resource projects.

Mt Bevan combines a potentially very large magnetite resource with low strip ratios and excellent metallurgy, in a location close to road, rail and an existing deep water port.

Legacy Iron is earning a 60% interest in Mt Bevan from Hawthorn Resources (ASX: HAW), by committing $3.5 million to exploration and completion of Pre-Feasibility studies before the end of calendar year 2012.

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Cockatoo Coal kicks off drilling at Hume and Bylong coal projects in NSW

Cockatoo Coal (ASX: COK) has commenced exploration drilling comprising open and cored drill holes at the Hume and Bylong projects, aiming to validate historical drilling and confirm coking coal quality characteristics of the Wongawilli Seam.

The extent and quality of the underlying Tongarra Seam is also being investigated at the Hume project located in the southern Sydney Basin, New South Wales.

One multipurpose drill rig is operational on the Hume project. A total of 7 holes for 742 metres have been drilled,   where cumulative down hole coal intercepts of up to 9.0 metres with an average thickness of 5.4 metres have been received.

The Hume project was previously reported as a 115 million tonne (Mt) Indicated export grade metallurgical/thermal coal resource and is managed and 30% owned by Cockatoo Coal and 70% owned by POSCO Australia Pty Limited.

The company is also aiming to prove up the extent and quality of the Ulan and Coggan Seams in the Bylong project, in the northwest Sydney Basin.

The coal seams intersected in the Bylong project area are being considered as both open cut and underground targets.

Two exploration drilling rigs are now operational on the Bylong project. A total of 14 holes for 2,292 metres have been drilled with cumulative down hole coal intercepts of up to 10.2 metres with an average thickness of 6.9 metres received.

The Bylong project was previously reported as a 423Mt (150Mt Indicated and 273Mt Inferred) export grade thermal coal resource and is managed by the company and 100% owned by KEPCO Australia Pty Limited, which has granted a 3 year call option to Cockatoo Coal to purchase a 30% interest in the project.
The company completed the acquisition of the Hume and Bylong projects on December 24, 2010.

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Soho Resources aims to deliver with key Durango gold project

Soho Resources (CVE:SOH), the Mexico-focused miner of gold, silver and base metals, has taken the fancy of broker Objective Capital, which believes that having emerged from an especially tough economic downturn with renewed vigour, the company is well placed to press ahead with its promising projects.

For Will Purcell, analyst at Objective Capital, the group’s key Tahuehueto polymetallic project in Durango, Mexico in particular offers considerable scope for upside.

In a detailed note on the company, Purcell notes Soho has already delineated a “substantial mineral” resource of gold, silver, zinc, lead and copper in several zones along a large principal structure at Tahuehueto.

A preliminary economic assessment (PEA) last year, meanwhile, yielded “robust economics”, according to Purcell. Recently Soho commenced data collection at Tahuehueto to support a prefeasibility study for a potential open pit and underground mine for the site.

The Tahuehueto project currently hosts a measured and indicated mineral resource of 7.38 million tonnes, averaging 2.1 grams of gold and 35 grams of silver per tonne, as well as 2.01 per cent zinc, 1.06 per cent lead and 0.28 per cent copper.

The deposit hosts a further inferred resource of 4.87 million tonnes, averaging 1.06 grams of gold and 31.8 grams of silver per tonne, as well as 2.26 per cent zinc, 1.23 per cent lead and 0.23 per cent copper.

Purcell says the potential for further discovery at Tahuehueto remains “excellent”. Indeed he is optimistic enough to have added 7 million tonnes of hypothetical mineralisation into his model for the prospect.

The PEA, meanwhile, has indicated an internal rate of return of 31 percent and a 27-month
payback, based on capital costs of US$89 million. It also projected cash flow over the life of the project at US$184.2 million, or US$109.6 million when discounted at 5 per cent.

The study contemplated a processing rate of 2,750 tonnes per day, well in excess of Purcell’s initial 2,000-tonne-per-day estimate as a result of the incorporation of an open pit plan.

The analyst also notes that the economics were achieved using conservative metal prices –“considerably lower” than currently prevail. He adds: “The potential for higher metals prices provides significant upside potential.

The economic assessment is, of course, even more robust, if current metal prices are factored in.

According to Soho management calculations, using spot metal prices as of February 16, 2011, the internal rate of return for the project jumps to 56 percent and the net present value (discounted at 5%) rises to US$300m, with capital cost payback within just 1.5 years.

Soho recently began prefeasibility drilling at Tahuehueto, with the programme designed to provide infill drill data as well as geotechnical information for the prefeasibility study. The drilling and data collection phase of the prefeasibility programme will take an estimated four months.

With the engineering and analysis of the data likely to require a further four months, Purcell believes Soho, potentially, could be in a position to complete its prefeasibility study in early 2012.

There are positives for Tahuehueto also on the all-important issue of infrastructure. The Mexican government is constructing a new paved, two-lane highway that connects northwestern Durango State with Tamazula and Culiacan, and to the Pacific coast via a more direct and easier route than previously existed.

Soho’s previous plan involved transport of its concentrate over a 185-kilometre gravel road requiring extensive upgrading, and from there another 400 kilometre haul to a smelter in Torreon. Purcell says the new route will pare nearly 200 kilometres from the distance and require significantly less capital cost.

Another bonus to the new route is that it will place Tahuehueto within closer reach of Durango’s power grid, which is currently about 30 kilometres distant. Soho had initially contemplated acquiring power from Tepehuanes, nearly 200 kilometres away.

While the fundamentals for Tahuehueto look appetising, Purcell notes that successful fundraising by the company will be key to enabling the company to advance the project.

The analyst says: Soho requires more cash within the next several months, if it is to stick to its prefeasibility timetable. Management has indicated that successful completion of a private equity placement sufficient to cover costs of the study is an immediate priority.”

Judging by the positive reception received by Soho’s previous placement, Purcell believes the company is very well placed to raise the necessary funds. He points out also that the company’s cash requirements are “modest” in the short term.

Although Tahuehueto remains Soho’s primary focus, the company is also looking to advance its Jocuixtita silver project in Sinaloa, Mexico, acquired in 2009. It intends to continue exploration at Jocuixtita concurrently with development of Tahuehueto.

Soho is proposing a C$0.4 million budget for the first phase of its Jocuixtita silver project, where due diligence sampling has already yielded assays of up to 867 grams of silver per tonne, with encouraging levels of gold, lead and zinc.

Purcell says the samples suggest silver accounts for 50% of the potential rock value at Jocuixtita, with zinc and lead also major contributors.

The company has already begun its first phase of exploration at Jocuixtita, with the programme including geological mapping of exposed mineralisation and drilling.

Soho, like many other resource stocks had a tough time during the depths of the recession and indeed was forced to place projects on care and maintenance for a period. Funding requirements in such a climate inevitably led to a significant shareholder dilution.

The dilution has had a negative impact on Purcell’s valuation for the stock. But the very strong recovery in metal prices since mid-2009 to at or near all-time highs and lower interest rates have helped moderate the impact of dilution more recently.

“Should metals prices hold near current levels or continue to rise, the value ascribed to Tahuehueto would increase significantly,” he says.

Based on these developments, and analysis of the company’s project funding requirements, Purcell has now increased his valuation of Soho Resources from C$0.35 to C$0.47 per share. That amounts to “quite an encouraging result given the substantial shareholder dilution incurred since mid-2009”, he says.

In fact, his more optimistic assessment, which assumes higher probabilities of exploration
success, increases to C$0.63 from C$0.44 per share.

Looking further out, Purcell notes that the upside potential of Soho becomes more apparent at future stages of development. Assuming success at all stages through feasibility and permitting, his base-case and most optimistic valuation assessments rise to C$1.10 and C$1.59 respectively, compared with our earlier estimates of C$0.85 and C$1.22 respectively.

Agnico-Eagle invests C$70 million in Rubicon Minerals

Rubicon Minerals (TSE:RMX, AMEX:RBY) received a vote of confidence in the potential of its Phoenix Gold Project with an agreement that will see larger industry peer Agnico-Eagle (TSE:AEM, NYSE:AEM) invest C$70 million into the company for a 9.2% equity stake (approximately 21.67 million shares).
The non-brokered private placement, which was announced at market close last night, is expected to be completed today at a price of C$3.23 per share. At market close last night shares in Rubicon were trading hands for C$3.06 per share.
Agnico-Eagle has also been granted rights to participate in subsequent issuances to maintain its level of ownership. Perhaps more important to Rubicon, the two companies are also set to negotiate a technical services agreement that would allow Rubicon access to Agnico-Eagle's geological and engineering mining team.
"Our strategic investment highlights Rubicon's good work in the Red Lake Gold Camp. This transaction is consistent with our approach of investing in prospective opportunities in supportive and welcoming mining jurisdictions,” Sean Boyd, Vice-Chairman and CEO of Agnico-Eagle commented.
Rubicon intends to use the capital for additional drilling, studies, testing and other development work at F2 Gold System, which is the core focus of the larger Phoenix Gold Project.
"We are very pleased to welcome Agnico-Eagle, a company with extensive expertise in the development of underground mines, as a strategic shareholder,” David Adamson, President and CEO of Rubicon Minerals commented.  “Their investment represents a significant validation of our efforts to date and recognizes the development potential of our Phoenix Gold Project.”
In June, Rubicon Minerals released results of a preliminary economic assessment (PEA) on the F2 Gold System, indicating a cash cost as low as US$214 per tonne of processed material. The report, prepared by AMC Mining Consultants, estimated the F2 System will produce 180,000 ounces of gold per year in the base case scenario over a life of 12 years, with a production rate of 1,250 tonnes per day. This, according to the study, would yield a net present value of $433 million, at a 5% discount rate, and a pre-tax 28% internal rate of return, with a payback period of 3.3 years from the start of production.
These base case results were calculated using a gold price of $1,100 per ounce, the company said, and increase when using a higher, spot gold price. Indeed, using a gold price of $1,500 per ounce, net present value, using the same discount rate, would jump to $933 million, while the pre-tax internal rate of return would climb to a impressive 48%.

Wednesday, 27 July 2011

Cockatoo Coal boosts JORC coal resources by 148% at Baralaba Mine project

Cockatoo Coal (ASX: COK) has increased the total of Measured and Indicated JORC Resources in the open cut production areas of the Baralaba Mine project by 148% to 13.1 million tonnes.

The Resource upgrade advances the expansion development plans of the Baralaba Mine project and exploration potential remains open in most directions. The newly defined Resources are expected to directly contribute to additional marketable Reserves following mine planning evaluation of the results.

The Baralaba mine project is within the company's Bowen Basin projects. Today's upgrade increases all classifications of JORC compliant Resources in the Bowen projects by 4% to 164.9 million tonnes.
The continuation of the coal quality coring program, laboratory analysis and interpretation of existing data has led to refinement in the geological models, and hence the upgrade.

The company said the upper coal seams of the Baralaba Coal Measures, present in the central areas of the Baralaba Mine project, have returned encouraging preliminary raw coal quality results with ash and energy values consistent with other seams mined in the current operation.

Exploration drilling activities are back to full production with four rigs operational.

A total of five large diameter (200mm) cored holes have been drilled for washability, and 13 slim diameter (100mm) cored holed have been drilled for raw coal quality since the last update.

In the Baralaba North project a total of 299 holes for 53,876 metres have been drilled, including 11 part-cored holes for 1,064 metres since the last update.

A total of 609 holes for 73,316 metres have been drilled in the Baralaba Mine project, including 11 part cored holes for 891 metres since the last update.

Recent drilling in the Baralaba Mine and Baralaba North projects has cumulative down hole coal intercepts of up to 9.4 metres with an average thickness of 4.2 metres.

Production at the Baralaba mine has demonstrated that the seams of the Rangal Coal Measures in this area have PCI and thermal coal properties. The seams mined at the Baralaba mine have been intersected in the Wonbindi, Baralaba South and Baralaba North target areas.

The company envisages future production from the Baralaba Mine, Baralaba North and Wonbindi project areas, subject to rail and port upgrades, as a key step in the realisation of the Company’s strategic goals.

Meanwhile, within the Queensland Surat Basin projects drilling in ongoing with a total of 705 holes for 83,579 metres drilled.

In the Collingwood project, a seam unidentified in historic drilling typically 6 to 7 metres in thickness and close to surface, has been intersected. The seam, which has vertical strip ratios of less than 2:1, has been cored and sampled for coal quality analysis.

A total of 55 holes for 3,386 metres have been now been drilled by the company at the Collingwood project where recent drilling has had cumulative down hole coal intercepts of up to 8.7 metres with an average thickness of 4.4 metres.

In the Taroom project, the company has now drilled 23 holes for 2,312 metres. Recent drilling has cumulative down hole coal intercepts of up to 14.7 metres with an average thickness of 10.0 metres.

Expansion of the Tin Hut Creek deposit to the north and south continues, with 7 holes for 736 metres drilled since the last update with cumulative down hole coal intercepts of up to 12.1 metres with an average thickness of 9.1 metres.

In the Krugers project, 20 holes for 2,412 metres have been drilled since the last activities. Recent drilling has cumulative down hole coal intercepts of up to 11.9 metres with an average thickness of 8.4 metres.

The drilling at the Collingwood, Taroom, Tin Hut Creek and Krugers projects has delivered positive results that will form part of the development program of the company’s Surat Basin assets.

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Crescent Gold: Focus Minerals now holds 44.7% as shareholders accept takeover

Crescent Gold (ASX: CRE, TSX: CRA) shareholders are accepting the Focus Minerals (ASX: FML) off-market takeover offer, with Focus now holding 44.7% of Crescent.

The offer is open until Monday 15th August 2011.

All of the Crescent directors have already provided acceptances.

Focus is offering one share for every 1.18 Crescent, which is conditional on a minimum acceptance of 90% - representing a 30.5% premium.

The merger will make Focus one of Australia’s top five gold producers with a 230,000 ounce production target in 2012 from multiple open pit and underground operations.

The combined group will have a JORC Resource of 4.3 million gold ounces.

In other Cresent news - last week the company announced gold production forecasts exceeded guidance by 8.5% in the June quarter, producing 23,871 ounces for a gross value of around US$36 million, based on a spot of US$1500.

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Arafura Resources discovers more near surface rare earths mineralisation at Nolans Bore

Arafura Resources (ASX: ARU) has intersected significant shallow rare earths mineralisation at Nolans Bore deposit, with wide intersections within an area that had not been extensively tested by previous drilling.

Further rare earths have been confirmed at depth across large parts of the Nolans Bore resource and a revised JORC resource is expected by the end of 2011, as some of this material has not been included. This new estimate will be used as the basis for the Nolans Project Bankable Feasibility Study (BFS).

Highlights include:

- 143 metres at 3.6% rare earth oxides (REO), 19.8% phosphorus (P2O5) and 0.56 pounds per tonne (lb/t) uranium (U3O8) from 23 metres;
- 27 metres at 4.1% REO, 25.6% P2O5 and 0.58 lb/t U3O8 from 58 metres; and
- 19 metres at 5.4% REO, 27.1% P2O5 and 0.90 lb/t U3O8 from 106 metres.

The Nolans Project in the Northern Territory is regarded as one of the world's largest undeveloped rare earths projects and is aiming for rare earth oxide production from 2013, and could supply 10% of the global rare earths market from 2015.

Dr Steve Ward, Arafura’s managing director and CEO, said “the 2011 drill campaign has been a major undertaking for the company. We will have completed more drilling this year than we have in total for all previous years.

"The initial results are very encouraging and reinforce the world-class status of Nolans Bore. We look forward to further results from the campaign when we will be able to assess the extent of expansion opportunities. This is particularly important considering the current undersupply in rare earths, which is forecast to remain in place for some years to come.”

The powerful force driving Nolans to production will continue to be the increasing rare earth elements (REE) demand, predicted at 7%-9% per annum over the next 5 years, against a background of supply constraint and very restrictive export quotas in China.

The Nolans Bore deposit is 135 kilometres from Alice Springs, and has a JORC resource of 30.3 million tonnes (Mt) containing 848,000 tonnes of rare earth oxides (REO), 3.9Mt of phosphate (P2O5), and 13.3mlbs of uranium (U3O8), with potential to expand.

The company said the mineralisation is buried under about 3 metres of shallow overburden in an extensive north-south zone that transects the deposit. The presence of infrastructure inhibited access to the area during earlier drilling campaigns.

Arafura is now undertaking additional drilling to further evaluate the extent and nature of this newly recognized north-south zone of mineralisation.

These drill intercepts are part of a comprehensive campaign of reverse circulation and diamond core (DDH) drilling (totaling 52,260m) that commenced at Nolans Bore in February 2011.

All shallow (150 metre deep) reverse circulation infill drilling has now been completed (29,904 metres in 227 holes) and assay results so far are in line with expectations.

An extensive program of deeper diamond drilling is nearing completion with geological and geophysical logging confirming the presence of Nolans Bore-type rare earths mineralisation at depth across large parts of the deposit.

The campaign aims to provide improved JORC confidence levels for part of the resource necessary for the Nolans Project BFS and determine the full extent of the Nolans Bore resource for assessment of expansion opportunities.

Arafura recently expanded the scope of BFS for the Nolans project and extended the expected completion date of the BFS by nine to twelve months.

The expanded BFS will not only reduce operating and capital costs and de-risk the proposed Rare Earths Complex at Whyalla, but take advantage of 1,221 per cent higher rare earths prices, by simplifying the project flow sheet to focus on rare earth products.

Notably, the average valuation for the Nolans Rare Earths mix has lifted to US$207.53/kg (FOB) in June 2011, compared to the June 2010 value. These higher prices are expected to continue because of the demand and supply equation for rare earths.

By the end of 2011 the company expects to have a much clearer understanding of the deposit’s capability to support expanded production far into the future, with sample analysis and geological interpretation of drill data well underway.

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South Boulder Mines broadens investor base by launching ADR program

South Boulder Mines (ASX: STB, OTC: SBMSY) will now provide North American investors to invest in the company after launching an American Depository Receipt (ADR) program.

The program will allow South Boulder to extend the company's shareholder base into key markets that have a strong understanding of the potash industry.

The over-the-counter ticker will be SBMSY.

South Boulder has a very interesting story to tell North American investors, after a continued string of high grade near surface potash discoveries at the Colluli Potash Project in Eritrea.

At the project the current JORC Resource is 548 million tonnes at 18.6% KCl, for total contained potash of 102 million tonnes, with an exploration target of 1.25 to 1.75 billion tonnes at 18-20% KCl.

South Boulder has an initial strategy to consider producing 2 to 10 million tonnes of potash annually from an open pit operation in 2016/2017, which is a substantial target considering the current global production is 55 million tonnes.

The company also has the potential to be the lowest cap-ex and op-ex operation in the world, with industry production costs around USD$100 to USD$250 per tonne, compared to the potash price of around USD$500 a tonne.

South Boulder has forecast operating costs to be in lower 25% of the industry.

Earth Heat Resources ticks another box for Copahue geothermal project with positive Concept Study

Earth Heat Resources (ASX: EHR) has ticked another box in the development of the Copahue project in Argentina after receiving a draft Concept Study on initial exploitation of the geothermal resource from Sinclair Knight Merz (SKM).

Importantly, the costs are within previous estimates and there are no environmental or technical impediments to the project proceeding.

The existence of four wells at the project has enormous benefits, including the ability to use the COP-4 well for production, potentially leading to early cash flows.

This means that the company may only need to drill one production and one injection well before generating cash flows.

Earth Heat is the only ASX listed geothermal company with a potential Bankable Feasibility Study (BFS) in the pipeline, and therefore is a front runner in the sector to generate revenue.

During the quarter, SKM interpreted a significant resource upgrade at Copahue, with a 150% increase over historic resource estimates. This underpins the view that the resource at Copahue is of world class scale.

Earth Heat also signalled its intention to list on the Toronto Ventures Exchange to tap greater investor recognition for its international portfolio of assets.

The company is in a select group of developers worldwide as it continues to demonstrate progress at the Copahue project, where it is looking to develop geothermal 15 MW power plant.

Engineering firm SKM's study supports Earth Heat's current commercial and risk profiles for initial development of a small modular plant and involved conceptual design of the wellfield, steamfield, power plant and power export into the national electrical grid.

On July 7 an Environmental Impact Assessment (EIA) was completed separately as part of the process and was significant as it is instrumental in determining the presence of major issues and indicating mechanisms for minimising the impact of the proposed activities on the environment.

Torey Marshall, Earth Heat's managing director, said “the receipt of the Concept Study is a significant milestone. The 15 MW modular design meets EHR’s current commercial and risk profiles for initial development, which importantly would exploit a known geothermal resource which has significant upward scalability.

“Thorough and rigorous environmental assessments are also being undertaken to ensure minimal environmental impact of future development plans.’’

The Concept Study has had a positive outcome and revealed significant social and environmental benefits with the best practice development possible based on the EIA.

Pre-existing drilling provides opportunities for minimising future production well risk, with only two production wells likely to provide requisite net 15 MWe power production with reserve for run-down.

The location in Neuquen Province provides for suitable sites for power plant construction within close proximity to the four existing wells.

An organic rankine cycle (binary) power plant with air cooled condensers provides an effective method for geothermal power conversion however final design will depend upon the outcome of further studies.

The 15 MWe net produced by the power plant can be readily exported to the national grid by way of existing 33kV line.

Should an integrity check of the existing COP 4 well prove positive it may be utilised as the second producing well.

The presence of 4 wells, some of which have previously been connected for the production of steam, significantly de-risks the project, by increasing the confidence of the resource.

The recommended option for the anticipated conditions is an air-cooled organic rankine cycle (binary) plant.

An ORC plant is expected to provide good conversion efficiency at a reasonable capital cost. Spent geothermal condensate would be re-injected, and non condensable gases (NCGs) vented to atmosphere.

First cost estimates are in line with global averages of $3 million to $6 million per MWe installed, but will be refined during subsequent studies.

Earth Heat is currently undergoing an internal review and consultation process with a view to determining the parameters of the next stage of the Copahue development.

The resource at Copahue provides significant scope for development at the project, with the potential energy generated for consumers in the Neuquen Province of Argentina.

The Copahue project is located 55 kilometres to the national electricity market interconnector, with a sealed bitumen road to the site from Neuquen City.

Other infrastructure includes power lines connected from the site to the nearby town of Caviahue, a plentiful water supply with oil field services and equipment in the Province.

Earth Heat has commenced the first phase in a Feasibility Study for the 'fast track' development of the plant at Copahue.

Earth Heat intends to use the Feasibility Study to secure financing needed to accelerate the plant to reach production and ultimately generate cash flow.

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Universal Coal secures 40% ownership of plus billion tonne Berenice Coking Coal Project

Universal Coal (ASX: UNV) has moved to a direct 40% ownership of the Berenice Coking Coal Project and the Somerville project in South Africa, post the completion of the first phase of drilling and the updated resource estimate - which was completed by GEMECS.

The significance of the ownership for Universal Coal is that Berenice hosts a coking coal JORC Resource of over one billion tonnes, with 218 million tonnes Indicated and 840 million tonnes Inferred.

Universal Coal has entered agreements to earn-in to a 50% direct ownership at the project by producing a JORC Measured resource, with the company also holding an option to increase the stake to 74% by means of a third party valuation.

Tony Harwood, chairman, said "The results of the 1st phase drilling program have exceeded the previous resource estimates substantially and will allow the company to commence a second phase of drilling and a Scoping Study in the 4th quarter of 2011.”

Importantly for Berenice is the strategic location 30 kilometres from the main line railway siding linked to the Maputo and Richards Bay Ports.

At the project coal occurs within eight sub-zones in a 35 metre to 40 metre thick composite carbonaceous unit deposited within a structurally controlled half-graben, around 12.5 kilometres long and 4 kilometres wide.

Adding to the potential of the project are the coal-rich sub-zones which have been intersected from suboutcrop, less than 20 metres in depth and up to 250 metres below surface.

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Ram Resources targets maiden JORC Resource in new rare earths drilling at Motzfeldt

Ram Resources (ASX: RMR) is eyeing off a maiden Inferred JORC Resource in a new drilling campaign at the Motzfeldt multi-element project in Southern Greenland.

The program will include up to 19 diamond holes for around 3200 metres - targeting the Aries Prospect where historic drilling concentrated on the centre line of the mineralised zone.

Holes will be drilled to 200 metres, with the program taking 45 to 50 days to complete, with results expected by mid-October and the resource estimation by the end of November 2011.

Ram has previously intercepted high grade rare earth elements at Aries including; 25 metres at 5,031 parts per million (ppm) total rare earth oxides (TREO), and 20 metres at 4,852ppm TREO.

In other important news for Ram - earlier in the year the company signed an agreement with the minority shareholders of Greenland Resources Limited (GRL) to vary terms for the acquisition of the remaining 49% of Motzfeldt.

Ram, which already holds 51% of the project, will have a 12 month option to acquire the remaining 49% in one transaction by issuing 200 million shares to the vendor.

The variation offers improved terms for the acquisition, reduced complexity and greater flexibility in negotiating future corporate transactions.

If Ram is able to establish a Resource at Aries by the end of the upcoming 2011 field season, a greater focus will be placed on potential development of the project.

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International Coal poised for exploration success at Queensland coal tenements

International Coal Ltd (ASX: ICX) will list today on the Australian Stock Exchange.  It has issued 45 million shares at $0.20, to raise $9 million.

An earlier seed capital raising round involved the issue of 84.5 million shares for a total issued capital of 130.7 million shares.  At a listing price of $0.20 this would value International Coal at $26.1 million.

Funds raised will be utilized to identify and develop hard coking coal and thermal coal resources. The company holds exploration projects at Bundaberg, and at South Blackall, in Queensland.

Bundaberg Project

International Coal has acquired quality projects adjacent to existing projects and within defined Geological Systems.

The Bundaberg permits include EPC 2194 of 274 km², EPC 2196 of 24.9 km² and EPCA 2195 of 71.5 km² which are all within the Maryborough Basin. They are located 50 kilometres north of Bundaberg, where the Company is seeking hard coking coal deposits located within the Burrum coal measures.

The main coal bearing sequences within the Maryborough Basin are the Burrum Coal Measures, Maryborough Formation, and potentially Tiaro Coal Measures. The Burrum Coal Measures crop out in the eastern portion of EPC2194, with the older Maryborough Formation and Graham’s Creek Formation cropping out west of the Burrum Coal Measures within the same permit.

The primary focus will be on EPC 2194, where exploration will be aimed at establishing an open cut mining resource. EPC 2194 is located 45 kilometres to the north of the Colton Coal Mine, which is under development by Northern Energy Corporation (ASX: NEC).

Colton hosts a JORC Indicated and Inferred Resources of 83 million tonnes, and an exploration target of 105 – 137 million tonnes. Coal mined from Colton will probably require beneficiation to produce a marketable hard coking coal product. Capital costs are estimated at $84 million, with a proposed initial production rate of 0.5 million tonnes in the first year, and ramping up to 2 million tonnes per year by 2015. Estimated FOB operating costs, excluding royalty are $112 per tonne, and EBITDA of $240 million is projected at a production rate of 2 million tonnes.

Guilford Coal (ASX: GUF) also has permits in the immediate vicinity, and is seeking coal resources in the Burrum Coal Measures that are sufficient to support annualized production of 1 million tonnes, for export via the Wiggins Island Coal Terminal, at Gladstone.

This may be indicative of the potential that exists on the Bundaberg tenements. Previous exploration has already identified thin seams of Burrum measures that outcrop close to surface within the permit area.

Moultrie Database and Modeling have prepared an Independent Geologists Report for EPC 2194 North that conceptualizes an exploration target of 50 to 70 million tonnes, and a second target at EPC 2194 South of less than 5 million tonnes within the Burrum Coal Measures. Other conceptualized targets in the same formation include EPCA 2195 with 70 to 90 million tonnes, EPC 2196 North of 5 to 10 million tonnes, EPC 2196 South of 5 to 20 million tonnes, which also hosts an Inferred Resource of 1.59 million tonnes.

Maryborough Formation conceptual targets at EPC 2194 are 200 to 250 million tonnes and at EPC 2196 are 20 to 40 million tonnes.

The first stage of exploration at EPC 2194 will include a Rotary Chip drilling program of 4 holes followed by an additional 20 holes at a total cost of approximately $575,000. The second year of the program will involve the drilling of 80 Rotary Chip holes and 10 partially cored holes at a cost of approximately $3 million.

South Blackall Project

The second major project area is at South Blackall, where EPC 2197 covers approximately 768 km², and is located 80 km northeast of Quilpie, in south western Queensland. This permit is located close to road and rail that can provide direct access to the Port of Brisbane. Both the Galilee and Eromanga Basin coal seams are present in the permit area, with the lower part of the Winton Formation in the Eromanga Basin targeted as a potential coal source.

EPC 2197 is located approximately 120 km north of East Energy Resources (ASX: EER) EPC 149, where East Energy has confirmed a maiden Indicated Resource of 469 million tonnes, within an Inferred and Indicated Resource of 749 million tonnes, and an early production estimate of 20 million tonnes per year. This resource was estimated to an open pit depth of 150 metres, within a coal seam of continuous mineralization, confirming the discovery of a major new thermal coal basin.

The Blackall Coal Deposit in EPC 1149 is expected to produce a domestic thermal coal product.
Immediately east of International Coal’s EPC 2197, is U.S. listed Sentry Petroleum’s (NASDAQ OTC: SPLM) Exploration Permits for Petroleum (ATP’s) 862 and 864.   Sentry Petroleum has also reported a “2,000 square mile non JORC coal deposit” located in oil drilling on EPP 862 and EPP 864, which are both adjacent to the East Energy Resources thermal coal discovery.

On 18th July, NSL Consolidated (ASX: NSL) announced it would go ahead with the acquisition of Queensland exploration permits for coal (EPC Applications) 2198, 2336, 2337 & 2338.

On the news, the NSL Consolidation share price jumped from a previous close of $0.07 to $0.11, a gain of 57.1% in two trading days.

Independent Geologists established an Exploration Target of between 6.6 billion and 18.1 billion of thermal coal products in the Winton Formation for NSL’s EPC Applications 2336, 2337 and 2338.

The Winton Formation is the main targeted coal-bearing structure, similar in mineralisation style to East Energy’s 1.2 billion tonne JORC Inferred resource and International Coal’s EPC 2197 Blackall Coal project.

The first year program at International Coal’s EPC 2197 will include the Rotary Chip drilling of 8 holes and 28 holes of large diameter drilling at a cost of $375,000. The second year program will entail the drilling of 11 Rotary Chip holes, and 3 large diameter holes at a cost of $500,000.

Moultrie Database and Modeling estimate a conceptual target range of from 9.13 to 9.32 billion tonnes at EPC 2197. This exploration target is reported within the Winton Formation with a range of 8.8 to 8.9 billion tonnes, and within the Mackunda Formation of 0.33 to 0.42 billion tonnes.


Bundaberg Project

Short term priority will be on International Coal’s Bundaberg Project where there is considered to be potential for large tonnages of hard coking Coal.

Infill drilling and core testing at Bundaberg Project will progress shortly.  Potential for large tonnages of coking coal exist at the Bundaberg Project where the two target exploration coal-bearing units are the Burrum Coal Measures and Maryborough Formation. Principal target is Cretaceous hard coking coals.

The company aims to prove up a JORC resource within 12 months from a target of 350 to 480 million tonnes of coking coal at the Bundaberg Project.

While a small JORC inferred tonnage of 1.5 million tonnes exists at the Bundaberg Project this is indicative of the existence of coal and a starting point.

Recent significant drill programs for coal have been very successful at near neighbours including Northern Energy, Guildford Coal, Ridge and Hancock  Coal.

Market Valuations of neighbouring companies to Bundaberg Permits:

Northern Energy: $197m
Guildford Coal: $490m
Carabella Resources: $265m
South Blackall Project

EPC2197 is located 80 kilometres northeast of Quilpie and 91 kilometres west of Charleville in south western Queensland.  There is a railway line between Quilpie and Charleville and it is 32 kilometres south of the tenement and continues to the coast to Brisbane.

In this area, the coal bearing intervals in the lower part of Winton Formation in the Eromanga Basin are the most prospective for finding an economic coal deposit.  The Winton Formation crops out over ALL of EPC2197.  It is 150 to 350 metres thick across the area as indicated by drilling and seismic surveys.   There may also be potential for Mackunda Formation coal seams to be present within EPC2197.

Based on the Geologist’s Report, EPC2197 has potential for large tonnages of domestic and export thermal coal.

The Moultrie Group has estimated potential tonnages of between 9.13 and 9.32 billion tonnes for both formations within International Coal’s EPC2197 tenement.  (For the Winton Formation, the potential coal tonnage was estimated at between 8.8 and 8.9 billion tonnes).

At present, there is insufficient data to calculate either an Exploration Target or JORC reported resources for EPC2197.   Although Moultrie concluded “sufficient data exists to correlate individual seams but only at a regional scale.” A grid meshed computer model would “provide the basis of target generation.”

South Blackhall Project looks to be a longer term project given the infrastructure that would be required including a likely new rail line.  That said, the valuation of neighbouring NSL Consolidated jumped by over 50% on the day it announced acquisition of the Eromanga tenements that almost abut International Coal’s EPC2197  tenement.  A Geologists Report indicated an Exploration Target of between 6.6 billion and 18.1 billion
tonnes of thermal coal product in the Winton Formation.

Market Valuations of neighbouring companies to South Blackall Project:

East Energy: $65m
NSL Consolidated: $22m

Market Valuations of other Queensland coal companies:

MetroCoal: $176m
Tiaro Coal: $24.3m
Endocoal: $58m
Bandanna Energy: $962m
International Coal (at $0.20 listing price): $26.1m

Coal floats and coal explorers in Queensland have been among the best performers on the ASX.  In the main, they have lifted valuations on exploration results and definition of JORC resources.  Judging by their success, and taking a line through their exploration tenements relative to International Coal's, there is plenty of scope for it to increase in valuation.

International Coal is leveraged to exploration success at its two projects on its IPO valuation parameters.  If neighbouring coal explorers are any guide, early valuations of International Coal may be the cheapest.

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Richmond Mining in pre-open pending capital raising announcement

Richmond Mining (ASX: RHM) has been granted a trading halt by the ASX pending a capital raising announcement, with the company's shares currently in pre-open.

Richmond has not yet indicated where the potential inflow of funds would be allocated.
The company's main focus is on the Buena Vista iron project in Nevada, U.S., which was recently acquired.

A recent Feasibility Study at the West Deposit provided some highly positive results for the company, which included:

- Capital cost of US$161 million;
- IRR of 41% (using a conservative average FOB concentrate price for the initial 10 years of US$110);
- Average annual high grade iron ore concentrate production of 1.75 million wet metric tonnes grading 67.5% total iron, with very low impurities over an initial 10 year mine life;
- Free after tax cash flow of US$476 million from the first 10 years of operations; and
- First concentrate delivery targeted for December quarter 2012.

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Fission Energy reports high-grade uranium boulders at Patterson Lake JV in Saskatchewan

Fission Energy Corp (CVE:FIS) and its 50-50 joint venture partner, ESO Uranium Corp (CVE:ESO), announced Wednesday that boulder assays at the Patterson Lake South property discovered high-grade uranium.
The prospecting and radon survey program collected 74 boulders and mineralized soil samples. The boulders ranged in size from gravel material, to mineralized cobbles, to large rocks, measuring up to 45 centimeters (cm) by 35 cm by 30 cm.
Assays from the boulders revealed that 25 boulders had triuranium octoxide, the naturally occurring form of uranium, grading at least 10%. The highest grade that the assays returned was 39.6% from a cobble measuring 5 cm by 4 cm by 4 cm in size.
An additional 23 boulders returned assays between 1% and 10% triuranium octoxide.
The boulder field has since been traced along a north-south trending length approximately five kilometres long and up to 0.9 kilometres wide.
The distribution of the samples implies that the mineralized boulders could be from more than one source. Still, the uranium-focused resource company said that radon anomalies have been located at both the boulder field and over a target area near Patterson Lake.

Mountain Lake intersects strong gold mineralization at Leprechaun gold JV

Mountain Lake Resources (CVE:MOA) announced Wednesday it intersected strong gold mineralizations at its Leprechaun gold deposit in central Newfoundland, indicating the continuity of the main zone mineralization.
The Leprechaun gold deposit is located on Mountain Lake's Valentine Lake property, a 50-50 joint venture with Marathon Gold, the property's operator. Both companies are jointly funding the project's $7.1 million budget, which includes 25,000 metres of drilling.
The deposit sits on the southwestern edge of the property, with the Sprite zone and the Valentine East zone located about 700 metres and 13 metres, respectively, along strike to the northeast of the Leprechaun deposit.
The junior gold exploration company released results from assays on the property including 32.2 metres grading 2.18 grams per tonne (g/t) gold, including 2.8 metres grading 11.36 g/t gold, in hole VL-11-296.
Hole VL-11-291 returned 14.4 metres grading 3.53 g/t gold, including 8.86 g/t gold over 5.6 metres.
Other notable results include 5.4 metres grading 2.46 g/t gold, including 0.9 metres grading 13.24 g/t gold in hole VL-11-297; and in hole VL-11-294, 2.1 metres grading 2.2 g/t gold, and 7.0 metres grading 5.4 g/t gold, including 3.5 metres grading 10.07 g/t gold.
Each of these assay results confirmed the mineralization at the deposit, with hole VL-11-296 confirming the northeast portion of the resource, and the northeast portion confirmed by results from hole VL-11-294.
"Whenever a hole drilled between two existing holes provides positive results such as VL-11-296, it increases the confidence level of the resource," explained Mountain Lake president and CEO, Gary Woods.
"We are continuing to focus the balance of the 2011 drill program on the Leprechaun Deposit area and drill holes such as VL-11-291 and -294 demonstrate that the Deposit remains open both along strike and at depth."
The Leprechaun deposit, which remains open at depth and along strike, has a resource estimate of 3.28 million tonnes grading 2.62 g/t gold for an estimated 277,000 ounces of gold in the measured and indicated category, and 4.41 million tonnes grading 2.01 g/t gold, totaling an estimated 285,000 ounces of gold, in the inferred category.

Andover intersects 6.6% copper equivalent at Sun property in Alaska

Andover Ventures (CVE:AOX) announced Wednesday it intersected 6.6% copper equivalent at its Sun property in the Ambler Mining District in northwest Alaska.
The results are from the first two of the company's 76-hole 2011 drill campaign on the property, totaling approximately 49,000 feet. At the program's end, Andover will have drilled 27 holes, with the rest drilled by previous operators, including Anaconda, Noranda, Sunshine Mining Company, Cominco and Bear Creek Mining Company.
Assays from hole Sun11-24, which was drilled to a depth of 157.3 metres graded 1.6% copper, 3.49% lead, 10.25% zinc, 86.6 grams per tonne (g/t) silver and 0.24 g/t gold over 16.5 metres, including 4.23% copper, 0.7% lead, 2.94% zinc, 59.1 g/t silver and 0.347 g/t gold over 2.0 metres.
Other notable results from this hole include 1.1 metres grading 3.19% copper, 0.59% lead, 3.62% zinc, 122.0 g/t silver, and 0.51 g/t gold; and 1.71% copper, 3.39% lead, 10.55% zinc, 102.0 g/t silver and 0.501 g/t gold over 1.4 metres.
At these grades, and at today's metal prices, the copper equivalent of the 16.5 metre intercept in hole Sun11-24 is approximately 6.6%.
"Drill hole Sun11-24 was drilled into the heart of the Sun Deposit and filled an area of the deposit that had received almost no historical drilling," said Sun project General Manager, Bradley C. Peek.
"The results confirm the grade, thickness and continuity of the deposit through this important zone."
Results from hole Sun 11-23A, which was drilled to a depth of 316.4 metres, include 0.41% copper, 0.65% lead, 2.42% zinc, 33.6 g/t silver, and 0.56 g/t gold over one metre; and 0.43% copper, 0.59% lead, 2.37% zinc, 50.9 g/t silver, and 0.65 g/t gold over one metre.
Assays from this hole, which tested the northeast, down dip edge of the Sun deposit, also returned two metres grading 0.19% copper, 0.23% lead, 0.88% zinc, 12.5 g/t silver and 0.21 g/t gold.
The results of these holes indicate that the deposit's known strike length is over one kilometre and is open to the northeast and down dip, Andover said, adding that the adjacent Southwest Sun deposit has a strike length of over 0.5 kilometres and is also open down dip and to the southwest.
The precious and base metal exploration company also said samples from holes Sun11-28, which, like Sun11-23A and Sun11-24, is in the central portion of the deposit, and holes Sun11-25, Sun11-26, and Sun11-27 have been sent out for assays to further extend the known mineralization on the property.
Andover's stock on the TSX-Venture slipped 1.54% to trade at $0.64 per share as of 1:45 pm EDT.