by Wally Graham, Resources Roadhouse
Peel Mining has been creating quite a bit of interest with the drilling results emerging from the Mallee Bull project. Where is it, what is it and why is it causing such a fuss? Mallee Bull is our main project, located in western New South Wales, near Cobar, which is eight hours west of Sydney, half way to Broken Hill.
I tell anybody I meet that it is, in my mind, one of Australia’s great mineral provinces.
We all know of Mt Isa, Broken Hill and Olympic Dam, I would rate Cobar in that league.
The Cobar region has a pretty well documented history of mining through the CSA copper mine? The CSA Mine ore body has been mined since the late 1800s. It was originally mined for around 50 years then after a hiatus began operation again in 1960.
It has pretty much been mined consistently since then producing average grades of around 5.5 per cent copper in recent times.
We’re 100 kilometres south of that mine.
What is it you have found? Mallee Bull is a greenfields discovery. We were initially drawn to the area by another prospect called May Day.
Looking over the historic reports we had access to, we saw there had been hits of high-grade massive sulphides at depth.
We drilled some holes there hoping to see more of the same and only came up with one skinny intercept that didn’t excite us too much.
What shifted your focus to Mallee Bull? MMG were flying a VTEM survey in the area so we tacked onto that and flew over the May Day area, as well as another area to the northeast, which was coveringan historic magnetic anomaly, called G5.
The southern end of the magnetic anomaly was in the historic four mile gold field.
The survey highlighted a coincident EM and magnetic anomaly sitting smack bang in the middle of the old goldfield.
It almost sounds like it found you instead of you finding it? I spoke to our geophysicist after we had conducted the survey and told him we had some data we thought was worth looking at.
He said if we had run the idea of the VTEM past him before we did it he wouldn’t have been too keen on the idea.
After looking at the data he agreed we had located something saying it was good as anything he had previously seen in the district.
Once you had identified the conductor you set about drilling. When did all that kick off? We commenced drilling at Mallee Bull in March last year, initially conducting three RC holes.
We got a few sniffs that kept us interested, the best being 10 metres at 24 grams silver and 1 per cent lead and 2 per cent zinc.
We saw hints of copper and a bit of gold, but there was nothing in those first three holes to explain the conductor the VTEM had identified.
We conducted some downhole EM work that showed we hadn’t hit the conductor, so we stepped back and drilled two more RC holes, one in front and one behind. Nothing again.
That dance went on for some time, didn’t it until you struck through? Drilling hole six we anticipated hitting the conductor at 200m downhole and at 240m we hadn’t hit it and the hole was lifting and the rods were looking like they were about to get jammed.
So we pulled that one up and at this stage I was thinking – this is the last roll of the dice – so we moved to halfway between hole four and hole six - and hole seven hit.
What did it hit? It returned 10m at 2.41 per cent copper equivalent comprising 1.70 per cent copper, 46 grams per tonne silver and 0.27 grams per tonne gold and 4m at 2.31 per cent copper equivalent comprising 1.49 per cent copper, 59 grams per tonne silver and 0.18 grams per tonne gold.
We knew at that point that we had something pretty exciting and we also realised that we had pulled up that other hole too soon.
So we went back and put a diamond tail on the drill and that was the hole that really excited the market.
You say that was the hole that excited the market. What was the result of that excitement? We began to attract the attention of the industry, particularly those with a sound knowledge of the area we are operating in.
I noticed some well-knowndirectors and geologists of exploration and mining companies familiar with Cobar, appearing on our share registry.
What sort of affect has that change had on the company? We reached a point where we really needed to raise more money to keep drilling. And the market was rubbish.
Throughout the first exploration campaign CBH Resources managing director Stephen Dennis had called a couple of times, as well as few other interested parties.
The CBH deal was the only one that suited us; we really wanted to maintain at least a 50 per cent ownership.
They were valuing the project at the time we did the deal at twice our market cap.
Their 50 per cent earn-in at $8.33 million put more value on Mallee Bull than the market was putting on Peel, so it was a no-brainer deal really. Plus they are miners.
It basically comes down to somebody familiar with the region has recognised the potential of the project and is willing to help you get the project up and running? That’s right; they have that local knowledge, they know the district.
The Jury is still out on Mallee Bull at this stage, it is still too early to really know if it is going to be a real boomer of a project or not.
But the prize is worth hunting for. If you do find a boomer here, history tells you that they’re usually pretty good.
So you have the bull by the tail so to speak? It’s an exciting time for us. We kept plodding away and kept exploring and I guess we just got lucky.
That’s more than a throwaway line as you have really made you own luck? We persevered; it was systematic. We did everything that you should do in exploration.
It is hard to walk away from a project when you haven’t tested it properly. Some people may have walked away after those first three holes.
Where do you go from here? We’re still waiting on some assay results to come through from the drilling as well as some geophysics. We still have a couple of holes to go as well.
I think we have proven this system is quite significant.
It’s not a company maker right at this second, but if we can have another couple of good hits, it’s probably not far off.
