Overseas riches

AFTER a heady rush into Asian mineral prospects in the mid-1990s, WA explorers have been more cautious in the past couple of years, following political and economic upheaval, particularly in Indonesia.

However, there are still glittering prizes to be won, and two Perth companies, Herald Resources and Copper Mines and Metals, have attractive targets in Sumatra and the Philippines.

The Sumatra project has been given an enthusiastic endorsement by the broker William Noall, which sees the Dairi prospect as having a likely resource of seven million tonnes of zinc and lead, with potential for more.

The current state of the resource is worth $160 million, according to analyst Roderick McIllree, many times the company’s current market capitalisation (Herald will probably end up with just over a half interest in the project, the balance held by a local company).

Copper Mines and Metals has concluded an agreement to develop the Acoje platinum-palladium project, near Manila.

McIllree acknowledges the risks faced in Asian countries, but believes that the Dairi venture is attractive.

Copper Mines and Metals is operating far away from the troubled southern region of the Philippines and should be subject to no more than the normal unpredictability of local politics.

McIllree points out that the base metal mineralisation at Dairi is equivalent to a gold resource of five million ounces, occurring in a grade of nearly an ounce to the tonne, and based on a price of $US270 an ounce.

Herald Resources Ltd recently increased its exposure to the deposit and is planning further drilling to fully evaluate south-eastern extensions, where mineralised grades and thicknesses are increasing, and to test other promising targets in the region.

The company has increased its interest in its Canadian-listed subsidiary, International Annax Ventures, which holds an 80 per cent beneficial interest in Dairi, and also has zinc-lead interests in Thailand.

Herald executive director Michael Wright said the exploration program at Dairi would be expanded with the introduction of a second, larger capacity rig.

The original rig would carry out exploration on other targets which have yet to be tested or require further delineation.

Given the large areal extent of the dome-shaped structure, which contained widespread indications of mineralisation through outcropping, it was possible that there could be targets of even greater scope than the one now being evaluated, he added.

Acoje is an example of how a mine may be launched to produce one commodity, but the discovery of others follows. This one contained one of the world’s biggest chromite deposits, mined until nearly a decade ago.

However, in the 1960s, nickel and platinum were found and mined and extensive resources were estimated by the previous operators.

Copper Mines and Metals will win a 49 per cent interest in Acoje by funding the project to the bankable feasibility stage.

Subject to the usual regulatory approvals, the holder of the operating agreement, Kinloch Resources, will be paid $2.2 million and be issued with shares and options.

The feasibility study will be conducted in con-junction with further drilling to define and expand the estimated resources to modern standards.

There is a considerable strike length that has yet to be examined closely.

In addition to the prime target of platinum, the ore body has worthwhile indications of cobalt, copper, chrome, gold and a number of rare metals.

The commodities known as the platinum group metals have, in the main, enjoyed high prices recently – platinum, palladium, rhodium – but with gold the disappointment.

Rhodium, a rare metal, sells for nearly $A3200 an ounce, platinum for more than $A1000, palladium $A1500, and gold, now the poor relation, struggling at $A520 an ounce.

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