Black Fire Minerals on track to deliver early JORC resource with Pilot Mountain acquisition

Black Fire Minerals (ASX: BFE) has completed due diligence on the Pilot Mountain Tungsten-Copper Project located in Nevada, USA, and as a result has taken-up its two year option to acquire 100% of the project.

Under the agreement, Black Fire has made an US$450,000 option payment to Pacific Gold Corporation for the exclusive 24 month option. By reaching this significant milestone the company can now progress Pilot Mountain through aggressive drilling programs.

Anthony Baillieu, Black Fire’s chairman, said “with tungsten prices increasing over 700% since 2002 this project represents an extraordinarily exciting advanced stage tungsten-copper project in the mining friendly regulatory environment of Nevada and the company is intending to advance the project as quickly as possible through aggressive drilling programs."

The project covers substantial historically defined tungsten-copper-silver skarn style mineralisation including the Desert Scheelite, Gunmetal and Garnet Deposits at which Union Carbide Corp undertook detailed evaluation and feasibility studies and developed a 70,000 ton trial pit between 1977 and 1983.

Over 150 drill holes were completed by Union Carbide with highlights at the Desert Scheelite deposit including:

- 12.6 metres at 0.59% tungsten oxide (WO3), 0.32oz/t silver (Ag) & 0.48% copper (Cu);
- 16.6 metres at 0.40% WO3, 1.63oz/t Ag & 0.42% Cu; and
- 13.3 metres at 0.37% WO3, 2.87oz/t Ag & 0.10% Cu.

These deposits were never exploited due to a significant collapse in tungsten prices in the mid 1980’s and no significant modern exploration has been undertaken on the project since then.

Consequently, the project represents an advanced opportunity for Black Fire to capitalize on the increasing demand for tungsten which has seen significant price growth both before and since the GFC.

In addition, the project has the potential for significant copper and silver credits.

Union Carbide’s historic reporting of their activities at the Desert Scheelite, Gunmetal and Garnet deposits is not compliant with the JORC code and thus cannot be reported by the company.

However, Black Fire’s initial exploration target for these 3 deposits is 7-9 million tonnes at 0.30 – 0.37% WO3. This target compares favourably with many existing tungsten mines and resource projects worldwide.

This target tungsten grade, which is based on extensive historic drilling, is considered very competitive with many current global tungsten mines and resource projects.

Proposed Exploration

Black Fire intends to commence an aggressive exploration program with the aim of bringing the historically drilled mineralisation into JORC compliant resources.

This program is planned to begin at the Desert Scheelite Prospect with a program of 18 diamond drill holes twinning and infilling historic holes. Permitting for this initial program has already been completed and the company is currently seeking an appropriate drilling contractor to commence the work.

In addition to the proposed drilling programs at the historic prospects, work will also commence in reviewing the many other known, but less advanced prospects throughout the project area including the Good Hope Prospect where an historic vertical drill hole returned 43 metres at 0.41% WO3 from surface. Activities will include geological, geochemical and geophysical evaluations.


Location & Tenure

The Pilot Mountain Project comprises 154 unpatented Mineral Claims for 12.9km2 located on the eastern flank of Pilot Mountain, 250km southeast of the city of Reno and 20km east of the town of Mina, in Nevada USA.

This ground package is the result of a consolidation program undertaken by Black Fire who staked 109 Claims to secure additional nearby prospects prior to acquiring the rights to PGC’s 45 claims over the historic deposits.

The project is located on open rangelands with excellent infrastructure including grid power and intrastate highway less than 20km to the west. Nevada is the “mining capital” of the USA with a favourable regulatory environment and availability of equipment and a skilled workforce.

Geology & Mineralisation

The Pilot Mountain project area is located within a thick package of bedded marine sediments of the Jurassic Luning Formation, which importantly comprises units of limestone and calcareous sediments which are the host to the tungsten-copper mineralisation.

Intruding these sedimentary rocks are a series of Cretaceous age quartz monzonites and granodiorites which have developed the skarn style mineralisation within the limestone beds.

Mineralisation is therefore effectively stratigraphically controlled where the favourable beds are in contact or close proximity to the causative intrusives. The principal tungsten mineral present is scheelite (CaWO4).

To date, mineralisation has been traced up to 200m away from the intrusive rocks and up to 600m along strike with widths ranging from 2 – 10m.

Three advanced prospect areas are known including Desert Scheelite, Gunmetal and Garnet and it is these prospects that were extensively drilled by Union Carbide between 1977 and 1983. A further 11 prospects at various stages of exploration fall within the project area.

Desert Scheelite Prospect

The Desert Scheelite Prospect is currently the largest known mineralised system in the project area. A total of some 134 holes (mostly vertical diamond core) have been drilled to date on a largely 100 x 100 foot (33m x 33m) pattern.

The skarn body is tabular in shape and extends for over 600 meters along an intrusive contact of a quartz monzonite body. The skarn has an east-west strike and steep northerly dips ranging between 50 to 70 degrees.

Mineralisation has been traced by drilling to a depth of at least 300m and is open at depth and to the east.

Two tungsten bearing zones are commonly present, each averaging about 7m in true thickness which in places coalesce to attain a true thickness of over 16m.

Tungsten intervals of up to 0.7% WO3 have been reported with the average arithmetic grade of mineralised intervals being 0.33% WO3.
Pyrite and base metal sulphides (principally chalcopyrite and sphalerite) can comprise up to 20% of the skarn in unoxidized samples with erratic historic base metal assaying reporting average grades of 0.20-0.25% Cu and 0.5 – 0.9% Zn.

Gunmetal Prospect

Drilling to date at the Gunmetal Prospect has been largely on a 400 x 200 foot (133m x 67m) pattern and has defined extensive tungsten mineralisation both as sub-vertical bodies formed along the contact of the causative intrusive, but also as flat lying stratiform replacement bodies along favourable carbonate horizons.

Overall the average tungsten grade of mineralised intervals in drilling is around 0.43% WO3 with copper, zinc and silver mineralisation also being reported. Silver grades range from trace to several ounces per tonne but averages less than one ounce per tonne.

The North Gunmetal area hosts the earliest known tungsten discoveries in the Project area and had some limited production from underground workings around 1920.

Garnet Prospect

The Garnet Prospect is located northeast of Gunmetal and comprises extensive largely sub-horizontal tungsten skarn development. Drilling to date comprising some 60 diamond holes has been on 100 – 200 foot (33m – 66m) spacings.

This work has defined a series of mineralized east-west lenses (sometimes stacked) in the order of 130m - 260m long by 50m-66m wide. Mineralised widths from the drilling vary from 1–10m. The average tungsten grade of the mineralised intervals in drilling is 0.37% WO3.

Other Prospects

A total of 11 other prospect areas have been defined within the claim areas. These are at various stages of exploration, from conceptual targets based on geophysics through to targets that have received some limited first pass exploration drilling.

The latter includes the Good Hope Prospect where an historic drill hole (RH#2) returned 43 metres at 0.41% WO3 from surface.

Terms of the Transaction

Under the terms of the agreement with PGC, Black Fire paid an initial US$50,000 in cash for a 100 day exclusive due diligence period which was subsequently extended by agreement between the parties to allow resolution of certain title issues.

The company has now exercised its right to acquire a 24 month option to purchase by making a further cash payment of US$450,000.

At any time before the end of the option period, the Company may acquire 100% of the project for further cash payments spread over a further two year period totalling US$1.5 million (or at the $1 million payment mark elect to revert to a 50:50 JV and make no further payments).

A further and final cash payment of US$1 million will be made upon the commencement of commercial mining. The project is also subject to a royalty agreement with a third party totalling 2% of the gross revenue of any mining operation.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/19468/black-fire-minerals-on-track-to-deliver-early-jorc-resource-with-pilot-mountain-acquisition-19468.html