Australia | Jul 04 2006
By Rudi Filapek-Vandyck
Superlatives are back, and so are the market rumours. Could it be that one of the largest new copper resource discoveries in over two decades is located in Queensland, Australia?
Junior miner Australian Mining Investments’ (AUM) Rocklands copper resource has already been dubbed "one of the most important mineral discoveries of the past 20 years". The company is thought to be sitting on a $17bn copper deposit and speculation is rife this will make it the next takeover target for Xstrata.
According to market rumours, Xstrata is actively looking at building its copper inventory in Queensland. The company operates the Ernest Henry mine (copper and gold) just 45km away from the Rocklands copper deposit that now has everybody’s attention.
The share price of Australian Mining Investments has increased more than tenfold from 29c a few weeks ago to $2.90 at yesterday’s close. On Tuesday the shares jumped another 63.82% ($1.87) to $4.80.
According to Australian Mining Investments’ initial resource estimate the Las Minerale zone of its Rocklands copper project near Cloncurry in north west Queensland has an inferred mineral resource of 59m tonnes averaging 2.04% copper equivalent. It is expected that these estimates will increase with further drilling results that will also include the Double Oxide and Rocklands zones.
Results from recent drilling indicate the resource increases in width with depth, implying a potentially much larger deposit. The mineralisation also contains cobalt and gold credits.
The announced results have already sparked the wildest rumours in the market with The Australian newspaper reporting this morning one unnamed equity broker is about to publish a report on the discovery later this week which will put a price target of $25 on the company – more than five times today’s share price which is already up 655% since May.
The company itself has announced it is aiming to prove up a resource of more than 100m tonnes at greater than 2% copper, along with significant gold and cobalt by-products.
The deposit is located within what is known as the Mt Isa Inlier. This is the geological structure that also contains the Mt Isa, Hilton, Ernest Henry, Century and Cannington metal deposits as well as significant uranium deposits that are currently being drilled.
Other junior copper miners in the region include Universal Resources (URL) and Aditya Birla (ABY).
Australian Mining Investments is reportedly planning to change its name to CuDeco.
Just as a comparison: Xstrata’s Ernest Henry mine was developed on the basis of a resource of 167m tones averaging 1.1% copper and 0.54 g/t gold.