The Moonta tenement covers an area of 819 sq kms and is located on the northern part of the Yorke Peninsula in South Australia. Moonta has a historic copper mining heritage and lies at the southern end of the Olymoic Copper-Gold Province, a world class copper belt.
Andromeda Metals holds 90% equity (and holds a right to acquire 100% equity) in the 106 sq km Moonta Porphyry Joint Venture with Minotaur Exploration Limited. A number of small production leases owned by third parties fall within EL 5984 and are excised from the Company's tenement.
The northern part of the Moonta tenement is designated the Moonta ISR Joint Venture with Environmental Metals Recovery Pty Ltd (EMR) to consider application of in-situ recovery technique to extract copper from the significant copper mineralisation located across the region.
Geological Setting - The Olympic Copper-Gold Province
The Moonta Copper Gold Project falls near the southern end of the world class Olympic Copper-Gold Province in South Australia. The Olympic Copper-Gold Province is highly prospective for Iron Oxide Copper Gold (IOCG) deposits, with Olympic Dam, Prominent Hill and Moonta-Wallaroo the three mines with past or current production, Significant deposits in the pre-development stage include Carrapatenna, Khamsin and Hillside, while numerous other prospects are spread along the belt.
Approximately 75% of Australia's known copper resources are contained within the Olympic Copper-Gold Province evidencing its substantial endowment. Exploration ground within the belt is highly sought after and held by a range of large and emerging copper producers.
The IOCG deposits in the Olympic Copper Gold Province are thought to have formed around 1,590 million years ago and are genetically related to the Hiltaba Suite granites. Mineralisation is associated with often intense alteration (or metasomatism) of the host rocks, with metasomatic products including bodies of magnetite-hematite bearing iron-rich rock.
The depth to the top of the rocks considered prospective for IOCG deposits varies significantly along the belt, and in many places the thickness of the overlying barren cover sediments exceeds 300 metres. However, the depth of cover on the Moonta Copper Project is normally less than 10 metres, and while it has obscured deposits and delayed their discovery , it is thin enough to allow the application of a broad range of cost-efficient exploration methods including surface geochemistry and shallow aircore drilling.
The Moonta Project includes the Alford Copper Belt, a zone displaying intense alteration and structure immediatley south and east of a large body of Hiltaba grantite.
Alford Copper Belt interpreted basement geology
Copper was first discovered on the Yorke Peninsula in 1859, leading to the establishment of substantial mining operations at Moonta and Kadina, and smelting and export facilities at Wallaroo. Together these towns formed the famous "Copper Triangle" which was crucially important in the development of the early South Australian economy.
A characteristic of the deposits at both Kadina and Moonta, confrimed by past mining records, are the dimensions and continuity of the mineralised lodes. For example, the Main Lode of the Wallaroo Mines (somewhat confusingly located at Kadina) comprised a series of steeply plunging, high grade ore shoots that were mined from the surface to depths of over 900 metres. The figure below shows a long projection of the Wallaroo Main Lode including shafts and level development, and the areas of ore stoped up until December 1915. The stoped out areas reflect the steeply plunging ore shoots.
Long projection of the Wallaroo Main Lode, 1915
Mining of the Wallaroo Main Lode continued after 1915 and the old reports record that on the 2,980 foot level (908 metres below surface) the Main Lode varied in width from 4 to 30 feet (1.2 to 9.1 metres), assayed 3.5% copper, and was mined over a horizontal distance of 1,970 feet (600 metres).
Similar steeply plunging ore shoots were present in the majority of the historical mines in the district, reflecting a fundamental geological structual control on mineralisation that is likely to be repeated at new discoveries.
Since 1959, exploration in the district has been dominated by major mining houses including Western Mining Corporation Ltd, North Broken Hill Ltd, Broken Hill South Ltd, Mount Isa Mines Ltd, BHP Ltd and Phelps Dodge Corporation. In the period from 1988 to 1993, a joint venture between Amalg Syndicate and Melita Mining NL focussed on producing copper and gold from the Poona and Wheal Hughes mines located near Moonta.
Adelaide Resources entered into the Moonta Porphyry Joint Venture (then with Amalg Resources) prior to listing in 1996, with the 106 sq kms MPJV one of the assets included in the Adelaide Resources' Initial Public Offering. The Company also secured a "first right of refusal" over the larger part of the tenement and in 2003 exercised this right to acquire the bulk of the Project area and consolidate its ownership.
In 2002, Adelaide Resources formed a joint venture with major copper producer Phelps Dodge Corporation, which completed a significant exploration program of drilling, geochemistry and geophysics. Phelps Dodge withdrew from the joint venture in 2006 allowing Adelaide Resources to take control of the entire Project area.
The long and active exploration histroy of the district has generated a substantial volume of past exploration information including data generated from geochemical and geophysical surveys, and from past exploratory drilling. The Company estimates the present day cost of repeating the exploration programs completed by previous explorers would be in excess of $50 million demonstrating the significant value of this past work.
Moonta ISR Copper Joint Venture
The Moonta ISR Copper Joint Venture is a joint venture with Environmental Metals Recovery Ptd Ltd (EMR) to consider application of in-situ recovery (ISR) technique to extract copper from the northern part of the Moonta tenement which contains significant copper mineralisation and is considered to have attributes that are prospective for hydrometallurgical in-situ recovery application.
EMR is an Australian private company comprising a team of senior mining professionals with extensive experience in mine development and operations, including ISR production in South Australia.
The Bruce Zone at Alford West and the Wombat deposits located approximately 3 kms to the west are considered to have a number of critical attributes that may allow hydrometallurgical in-situ recovery copper production. Both deposits are characterised by deeply developed weathering troughs that extend hundreds of metres below the surface. The rocks to both the north and south of the weathering troughs are fresh and impermeable while the trough material contains copper mineralisation that is oxidised, porous and likely permiable, and is situated below both the water table and sea level. Both deposits remain open along strike, presenting opportunities to find further mineralisation in the trough extensions.
Mineral Resource and Exploration Target
A JORC 2012 Mineral Resource for the Bruce, Larwood and Wombat deposits has been calculated and which comprises 114,000 tonnes of copper within 66.1Mt of ore grading 0.17% Cu at a cut-off grade of 0.05% Cu. The Mineral Resource is classified as Inferred.
A broader Exploration Target that is considered amenable to ISR application has been determined for the region comprising of between 238Mt and 310Mt at a grade range of between 0.18% to 0.23% Cu for between 428,000 tonnes to 713,000 tonnes of copper. Exploration Taregts are conceptual in nature and there has been insufficient exploration to define a Mineral Resource under the JORC code and it is uncertain if further exploration will result in the determination of a Mineral Resource.
In-situ recovery has the potential to be a low environmental impact method of copper extraction with minimal surface disturbance that is sensitive to and can co-exist with existing landowners.
In-situ recovery is a production process used to recover minerals using a fluid circulated via drilled wells. During the process a leaching solution (or 'lixiviant') is injected into the mineralisation via a borehole, passes through the deposit leaching the target commodity, and is returned to the surface via a second bore where the dissolved metal is extracted from solution by SXEW or ion exchange in a processing plant. The costs of ISR are substantially below those of conventional mining, allowing production from much lower grade deposits.
Example of ISR technique for a uranium deposit
Moonta ISR Joint Venture Terms
The principle terms of the Moonta ISR Joint Venture, which was executed in December 2018, are:
- EMR can earn an initial 51% interest in the project area by sole funding $2.0 million on project related activities across the project area within 4 years of execution of the Joint Venture Agreement (Stage 1 Commitment);
- EMR is required to spend a minimum of $200,000 on the project in the first year and a further $300,000 in the second year under Stage 1 Commitment;
- On completion of Stage 1 Commitment, EMR may elect to acquire an additional 24% equity interest (75% in total) through expenditure of an additional $3.5 million ($5.5 million in total) over a further 3.5 years (7.5 years in total) (Stage 2 Commitment);
- on completion of EMR's sole funding commitments, ADN may elect not to contribute to a proposed joint venture program and budget, in which case its interest in the joint venture will be reduced in accordance with a standard industry dilution formula;
- if ADN dilutes to less than 10% equity interest in the joint venture, then its interest will revert to a 1.5% net smelter return royalty payable with respect to any minerals produced from the project area;
- EMR will manage and operate the joint venture whilst it is sole contributing and thereafter while ever it holds a majority equity.
A review of often hand written old exploration records by Andromeda Metals, which led to the recognition of the opportunity at Alford West, has identified further potential targets such as the West Doora, Doora and Vulcan prospects within the balance of the Moonta Copper Gold Project.
At West Doora, southwest of the town of Kadina, between 1966 and 1974 drilling undertaken by the WMC/NBH joint venture intersected copper from depths as shallow as 20 metres below surface with significant intersections including 7.31 metres at 2.29% copper from 224.03 metres in DDH 38 and 71.02 metres at 0.82% copper from 276.15 metres in DDH 114.
To the southeast of West Doora lies the Doora and Vulcan prospects where significant intersections from historical drilling by WMC and its joint venture partners included 8.38 metres at 1.20% copper from 380.24 metres in DDH 7, 2.44 metres at 7.64% copper from 182.42 metres in DDH 52, and 20.00 metres at 0.75% copper and 0.33g/t gold from 10.00 metres in MP 674.
These prospects add to a growing list of prospects within the Moonta Copper Gold Project that are 100% owned by Andromeda Metals and represent additional targets that show potential to contribute to a broader project resource inventory.