For some reason investors didn’t like the update on Tuesday from Magmatic Resources
(ASX:MAG) showing it had made further strikes of low-level copper and gold at its wholly owned Corvette prospect in its Myall project in the hit central west region of NSW.
Magmatic shares fell sharply – 30% after the update, though it recovered around half the loss on Wednesday, Thursday and Friday.
It’s not that the news from Magmatic was poor – it looks like some investors may have been expecting more from the update that what they got.
The update was more confirmation that the company – like Alkane nearby and like Evolution and Newcrest did with their discoveries at Cowal and Cadia – will need more time to work out what they have in Corvette and Myall.
That means more work on grades, tonnage, quality and how it will be processed – that point is already being addressed. Some of the grades in the update were a bit light for some investors, others accepted that it is a work in progress.
Magmatic said in the update that an active drilling campaign had “continued to grow the mineralised system at the Corvette prospect.”
Magmatic said the results also demonstrate that Corvette remains open in all directions, with prospect and regional scale vectoring work ongoing to fully unlock the potential of the area.
“Magmatic’s management continues to recognise the immense ongoing potential of the Myall Project, having now significantly exceeded the original planned 8,000-metre diamond program,” CEO Dr Adam McKinnon said in the update.
“With each drill hole completed, we are seeing the volume of copper and gold mineralisation in the system grow substantially.”
“Our most recent drilling, including the latest oblique and scissor holes from the northeast, are providing our technical team with invaluable data on the geology, structure and, importantly, mineralisation in the Corvette area.
(Scissor holes are drilled at angles to each other and cross at a planned depth to explore areas opposite those before they cross.)
The latest 14 diamond holes (for 11,092 metres completed at the project), included the northernmost hole at Corvette to date, intersected copper-gold mineralisation and demonstrate the continuity of grade across parts of the mineralised area.
That northern most hole encountered a 455.2 metre interval of mineralisation “within a broad pyrite and chalcopyrite formation” which are usually host minerals for copper and gold.
The larger interval assayed at 0.13% copper equivalent, with 0.12% copper, 0.01 g/t gold and 11 parts per million (ppm) molybdenum from 249 metres deep.
Initial metallurgical test work on a composite sample from the Corvette prospect has demonstrated that sulphide mineralisation from Corvette is treatable using industry-standard grinding and flotation techniques.
The test results also show that gold and silver upgrade alongside the copper.
“I am very pleased with the initial metallurgical test work for Corvette,” McKinnon said in this week’s update.
“Although additional test work may be required in the future, these results represent another step in demonstrating Myall Project’s potential.”
The future test work might also aim to produce a separate molybdenum concentrate, given elevated molybdenum grades in drill results.
The Myall project is located about 60km north along strike of the Northparkes Mine, which is jointly owned by CMOC Group (previously China Molybdenum) and Sumitomo, from where Magmatic is targeting similar style mineralisation.
