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Exploration investment driving WA to the peak of global resources

25 February 2022
ASX: MXR
Jack Baker

The latest Exploration Incentive Scheme funding has Western Australian resources at the forefront with the government sharing in the drive to lead global mining exploration with all factors in the state coming together to create a unique environment for innovation and a culture of excellence.

Last year the McGowan Government put an additional $12.5 million on the table, which is already helping a growing swag of explorers and developers by taking some of the inherent risk involved with making that next big resource discovery.

It is an investment it hopes will lead to new mines and new jobs for Western Australians. And the money has already helped Maximus Resources by funding 750 metres of extra drilling a the company’s promising Hilditch West Nickel project near Kambalda.

Maximus boss, Tim Wither, says scheme funding recently paid for around half of recent drilling costs at its Redback Prospect, enabling the company to apply ultra-modern mining techniques to go further down than previously possible.

“The EIS grant has allowed the material testing of the Redback Gold deposit and has resulted in very encouraging gold intersections,” Wither said.

“These intersections gives us the highest conviction the system is fertile and open at depth.”

The grant is far from a free-for-all cash grab, heavily contested project applications and awarded technical merits.

“At our Redback Deposit, the two-deep EIS holes which we recently completed are 300 metres deeper than any previous drilling,” Wither says.

A junior company like Maximus would need a lot of conviction without the EIS to drill a $132,000 hole – equivalent to a geologist’s annual wages.

Wither says exploration is risky, particularly deciding where to place capital for the best returns. He says the grants lower the inherent risk and significantly improve the odds of making a game-changing discovery.

He recounts a recent time when a bold decision to keep drilling paid handsome dividends.

“Deeper drilling is usually required to tap scale resources,” he said.

“It was Sunday afternoon, and we had reached target depth, without intersecting the expected ultramafic contact,” he remembers.

“We agreed to push on during Sunday night and, luck has it, late on Sunday night, we had intersected the alteration zone of the Western Contact, so we continued drilling for two to three days.

“If we reached depth during the day, we more likely would have canned it, that is the tales of exploration. It is a game-changer for Redback and the whole Wattle Dam area.”

Chamber of Minerals and Energy Director of Policy and Advocacy Rob Carruthers says the EIS return on investment speaks volumes for its success.

“The scheme is an excellent example of collaboration between industry and government to help pave the way for major projects that deliver significant economic and community benefits for WA,” he said.

“We look forward to seeing the outcomes out of this next round of funding and following the progress of the projects that grow out of it.”

Managing the risk

The third incarnation of EIS includes a co-funded Energy Analysis Program to investigate the state’s energy resources.

Department of Mines, Industry Regulation and Safety executive Jeff Haworth says the EAP provides additional risk mitigation for innovative projects.

In his role as director of the Geological Survey and Resource Strategy team, Haworth oversees the application of advanced modelling techniques and programs to produce more reliable resource modelling.

“These studies are important for developing updated, higher resolution geological models with more comprehensive datasets which can help enhance and de-risk exploration prospects,” Haworth said.

He says pleasingly – companies are co-investing in high-tech modelling with many applications requesting additional analytical work on existing material.

For instance, an applicant uses heat needles to acquire precise ground temperature measurements. The technique assesses heat flow for geothermal targeting – the type of innovation that Haworth thinks will continue to be the bedrock of WA’s resources sector.

“Several Energy Analysis Program projects have adopted innovative techniques in their studies. For example, petroleum companies have examined another company’s existing core stored in the department’s drill core library,” Haworth said.

“This analysis has included using chemostratigraphy to correlate the stored core with newly acquired core to enhance the understanding of the target and regional geology.”

COMPANY OVERVIEW

Maximus Resources (ASX: MXR) Spargoville tenements are located in the heart of Australia’s premiere gold and nickel mining district – just 25km from Kambalda, Western Australia. Home of the very high-grade historic Wattle Dam Gold Mine, the Spargoville tenements are readily accessible and are located less than 50km from six gold processing plants and just 25km from BHP’s Kambalda Nickel Concentrator. Mined until 2012, the Wattle Dam Gold Mine was one of Australia’s highest-grade gold mines, producing ~286,000 oz gold @ 10.1 g/t gold . Maximus Resources’ focus is the discovery of the next Wattle Dam Gold Mine. Maximus Resources has been granted 48 sqkm of mining licences and has gold rights across a further 60 sqkm along the very fertile Spargoville Shear Zone, hosting multiple significant gold and nickel deposits.

COMPANY INFORMATION

ASX: MXR

Website

http://maximusresources.com/
https://www2.asx.com.au/markets/company/mxr

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