Murchison wired over copper’s potential
The recent wave of interest in Murchison copper started in early August as analysts began returning from the Diggers and Dealers conference in Kalgoorlie very excited about the future of Sandfire Resources.
Sandfire’s Degrussa Copper-Gold Project, 150km north of Meekatharra in the Murchison, has been the most significant copper discovery in the Australian resource sector in the past decade.
Since the initial copper and gold discoveries in 2009, Sandfire has completed a Definitive Feasibility Study on the project targeting copper production to start in the first quarter of 2012.
With copper floating near record-highs at around $US4/lb and projected production costs of US$1.02/lb, the potential cashflow from Degrussa looks impressive.
Ever since Sandfire discovered the Degrussa deposit there has been a rush by the junior explorers with surrounding tenements to replicate Sandfire’s success.
Despite the proximity argument which caused a run in the share price of a number of companies surrounding Sandfire in 2009 on limited drilling results, the copper explorers in the region have been relatively quiet.
That is until the last month when Sipa Resources (ASX Code: SRI) and Ventnor Resources (ASX Code: VRX) both announced solid results from their exploration programs.
Sipa Resources led off with outstanding copper drilling results at their Thaduna deposit, which is 25km to the east of Degrussa on the same fault line.
Sipa still has a long way to go to define the depth, lateral extent and the grade distribution of their Thaduna deposit but initial results showing grades of up to 3.7 per cent copper over eight metres, and grades of 14.3 per cent over two metres are encouraging.
The results were enough to get the market excited about the stock, with the stock trading at 7c/share before the announcement and as high as 19c/share post announcement.
Within the greater Sipa tenements are two old copper mines, Thaduna and Green Dragon, which come under the ownership of recently listed Ventnor Resources.
Ventnor has been actively drilling these old mines and on Monday announced some equally impressive results, namely 5m at 4.21 per cent copper from 30m downhole at Thaduna (yes, there is a name clash with Sipa) and 2 metres at 9 per cent copper from 85 metres downhole at Green Dragon.
The market also liked these results, with Ventnor closing 91 per cent higher on Monday at 43c/share.
Buoyed by their recent success, both companies are pushing forward with extended drilling programs, with Ventnor likely to the be the first to announce a Joint Ore Resource Committee (JORC) compliant resource if all goes to plan in March 2012.
Information contained in this article does not consider your personal circumstances. You should consult a stockbroking professional before making any investment decisions. Sentinel may hold positions in stocks discussed from time to time.
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