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Recent announcements regarding the South Australian mineral and energy resources sectors

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This update covers the March 2017 period and is compiled from information publicly released by companies and Ministerial news releases.

Readers should refer to the latest information available on company websites, particularly in regard to making any forward investment decisions.

Company news

Alliance Resources

Alliance Resources is relogging reverse circulation (RC) drilling chips and diamond core from the Weednanna prospect to identify structural and lithological controls on the distribution of gold, plan further exploration and compile a 3D geological model to support a mineral resource estimate (Interim Report - 31 December 2016, ASX release 16 March 2017). Reanalyses of sample pulps from 2012 RC drilling for iron mineralisation at Weednanna and elsewhere is underway for gold and other metals. This work is expected to be completed in the first half of 2017.

Weednanna is within the Wilcherry Project Joint Venture; Alliance is a 51% equity partner with Tyranna Resources. The project is located within the southern Gawler Craton on the northern Eyre Peninsula.

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Archer Exploration

Archer Exploration has discovered more high-grade cobalt at its Ketchowla cobalt–manganese project in the Mid North: average grade 0.28% Co, with a highest grade of 0.64% (ASX release 17 March 2017). Manganese grades >50% were also reported at several locations. Preparation for the upcoming Ketchowla RC drilling program is well advanced, with commencement expected in late April.

Archer has moved a step closer to securing a mining lease for its Campoona graphite project with the completion of the public consultation phase of its mining lease application (ASX release 24 March 2017). The mining lease is anticipated to be granted by the South Australian Government in mid 2017.

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Boss Resources

Boss Resources has continued to progress its Jasons uranium deposit with the release of an updated mineral resource (ASX release 15 March 2017). The 2017 inferred resource stands at 6.2 million tonnes (Mt) with an average grade of 790 parts per million (ppm) eU3O8 for 10.7 million pounds (Mlb; 4.9 kt) of contained U3O8 reported using a 250 ppm U3O8 lower cutoff. This represents a 107% increase in metal endowment to the 2016 resource.

The increased resource is a result of a 77-hole maiden exploration program undertaken in December 2016 and January 2017 that focused on the central portion of the deposit, and assessed continuity of mineralisation trends as well as verifying historical grade data.

The combined Honeymoon Project resource now totals 43.5 Mt at 650 ppm eU3O8 for 63.3 Mlb of contained U3O8 – representing a 10% increase in metal to previous estimates.

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Gindalbie Metals – Torrens Mining

Western Australian based Gindalbie Metals recently announced that it had entered into a farm-in and joint venture agreement with Terrace Mining, a wholly owned subsidiary of privately owned Torrens Mining, to earn up to 75% interest in the Mount Gunson copper–cobalt project, located 135 km north of Port Augusta. Gindalbie sees the proposed farm-in agreement as an opportunity to gain a low-cost entry to one of the world’s premier copper belts (ASX release 17 March 2017).

The farm-in will be implemented in stages with expenditure focused on completing prefeasibility and definitive feasibility studies over the project as well as conducting additional exploration over the tenement package. Gindalbie’s interest will be earned as such:

  • Stage 1, Test work and flow sheet design. $1.37 million spend in first 12 months for a 25% joint venture interest.
  • Stage 2, Study phase. An additional $2.5 million spend within a maximum of 4 years of commencing the joint venture will earn an additional 26% interest (51% joint venture interest in total).
  • Stage 3, Study phase to decision to mine. A further spend of $2.75 million within a maximum of 6 years of commencing the joint venture will earn a further 19% interest (70% joint venture interest in total).

The project includes substantial existing mineral resource estimates within two main deposits – MG14 (1.6 Mt at 1.4% Cu, 0.04% Co and 14 grams per tonne (g/t) Ag; JORC Code 2012) and Windabout (18.7 Mt at 1% Cu, 0.05% Co and 10 g/t Ag; JORC Code 2004) – as well as a number of prospective brownfield exploration opportunities and an extensive database of past exploration and metallurgical data.

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Havilah Resources

Havilah Resources has announced a new mineral resource estimate representing a >80% increase in contained copper and >60% increase in contained gold for its wholly owned Kalkaroo copper–gold project (ASX release 29 March 2017). The new resource estimate is 232.5 Mt at 0.49% Cu and 0.37 g/t Au for 1.14 Mt of contained copper and 2.77 million ounces (Moz) of contained gold (at a 0.4% Cu equivalent lower cutoff) in JORC measured, indicated and inferred resources. This excludes a substantial gold cap of 21.7 Mt at 0.74 g/t Au for 515,000 oz of contained gold (using a 0.2 g/t lower cutoff).

In an ASX release on 6 March 2017 Havilah announced its new copper–cobalt strategy stating that its undeveloped copper sulfide deposits (Kalkaroo, North Portia and Mutooroo) contain appreciable quantities of cobaltian pyrite and that the cobalt resources will be developed in conjunction with the copper resources. The strategy will be implemented in stages commencing with the Mutooroo deposit which has an estimated measured and indicated sulfide resource of 5.9 Mt of 1.31% Cu and 0.14% Co within a total sulfide resource estimate of 12.5 Mt at 1.53% Cu (ASX release 18 October 2010).

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Investigator Resources

Investigator Resources has commenced drilling at its Nankivel copper–gold porphyry target, located along a connecting structure 4 km from the 33 Moz Paris silver project, 70 km northwest of Kimba on the Eyre Peninsula (ASX release 24 March 2017).

The four-drillhole program will target a large, undrilled 800 m by 1.5 km demagnetised area identified from the assessment of prior drilling and an induced polarisation geophysical survey undertaken in 2016. The area is potentially considered the copper-mineralised centre to the Nankivel porphyry system.

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Ministerial news releases

Gas grants and new exploration area to boost local supply

Tom Koutsantonis, Minister for Mineral Resources and Energy
17 March 2017

The recipients of the first round of PACE Gas grants have been announced, with five exploration and development projects to share in $24 million in state government funding. The grants will generate up to $174 million in new investment by oil and gas companies in local production projects. Gas extracted through the grant scheme will be offered to South Australian electricity generators first. On 14 March a second $24 million round of PACE Gas grants was announced.

The state government will also offer a new exploration licence for five blocks in the Otway Basin in the South East, through a competitive bidding process to be finalised by the end of the year. The state government’s royalty sharing program, announced on 14 March, will first apply to this new exploration area.

South Australia is taking charge of its energy future

Premier Jay Weatherill
14 March 2017

The state government has unveiled a comprehensive plan to take charge of the state’s energy future and deliver reliable, affordable and clean power for South Australians. South Australian Power for South Australians will ensure more of the state’s power is sourced, generated and controlled in South Australia. The $550 million plan will increase security, boost competition and put downward pressure on prices. 

Applications now open for mining and energy awards

Tom Koutsantonis, Minister for Mineral Resources and Energy
10 March 2017

Applications are now open to recognise the outstanding contribution resource companies make to communities across South Australia. The Premier’s Community Excellence Awards in Mining and Energy will celebrate industry leaders in corporate social responsibility and environmental management and aim to set a benchmark for excellence in this area. 

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