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Empire Metals Ltd

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An exciting few weeks ahead for Empire Metals 

 

“…With ongoing exploration at Eclipse-Gindalbie, and new prospects at Pitfield, Stavely and Walton, EEE is set for a bumper last quarter…”

 

Exploration and development company Empire Metals (AIM:EEE) has continued to consolidate its presence in Western Australia this year, working to open up what it hopes will prove a rich seam of new gold and copper prospects. 

As TMS has reported in previous updates, EEE has undergone something of a transformation over the past two years, shifting focus from the Caucasus to building a portfolio in Western Australia’s prolific mining regions. To recap, the company changed direction in 2020, dropping its previous headline asset, a 50pc interest in the Bolnisi Copper and Gold Project in Georgia, and acquiring a 75pc interest in the Eclipse Gold Project, a mine located 55 km north-east of Kalgoorlie that has recorded historic production of 954 tonnes at 24.6 g/t gold.

EEE sharpened its new focus on Australia last year, taking a 75pc option interest in the Central Menzies Gold Project 90 km north-west of Eclipse, a set of four exploration licences covering a granite-greenstone belt within the Menzies Shear Zone, is close by the 320,000 oz Menzies Gold Project operated by ASX-listed Kingswest Resources. After an initial drilling programme did not detect significant gold mineralisation EEE decided not to take up the option. But the company signalled its continued commitment to Australia by entering into a Tribute Agreement with Maher Mining Contractors Pty Ltd, to explore, develop and mine within a granted area on Maher’s Gindalbie Gold Project, located near the historic gold mining town of Gindalbie, adjacent to the Eclipse Gold Project.

Gindalbie increased EEE’s mineralised footprint around Eclipse by more than 200pc to 943 hectares, and extended the company’s scope for exploration targets a further two kilometres along the Eclipse lodes trend, by one kilometre to the north and three to the south. Gindalbie was an active gold mining centre around the turn of the last century: total recorded production to the end of 1913 was 44,622 tonnes of ore for 40,643 oz gold (at an average grade of 28.33 g/t gold). The new acquisition allowed EEE to target ‘significant additional high-grade gold targets to be evaluated within the combined Eclipse-Gindalbie area, both along the southeast strike extension of the Eclipse trend and in sub-parallel northwest-southeast trends lying to the northeast and southwest of the Eclipse trend’. A new drilling campaign encompassing both projects was designed to test for high grade gold mineralisation at Eclipse and, at Gindalbie, to extend the mineralised trend to the southeast of Eclipse, and understand the extent and origin of what the company believes to be ‘a much larger gold system’.

EEE’s busy summer: progress this year

 

Earlier this year EEE was able to report encouraging intercepts following 1,676 metres of drilling at Gindalbie, including 5m @ 8.99 g/t Au from 31m downhole, including 1m at 40.90 g/t Au; 3m @ 8.96 g/t Au from 98m downhole, including 2m at 13.28 g/t Au; 3m @ 9.88 g/t Au from 46m downhole, including 1m at 26.20 g/t Au; and 2m at 3.0 g/t Au from 43m downhole. Assay results from drilling at Eclipse were also positive, confirming gold mineralisation associated with targeted shear zones extended over a strike length of more than 500 metres, an increase in strike length of over 300 metres from the previously reported extent of mineralisation along the Eclipse shear. Five of the six holes intercepted mineralisation within the shear, and results indicated that the Eclipse lode remains open at depth. EEE will use the geological and structural data being gathered from the analysis of the diamond core to ‘assist in the development of a robust geological model for Eclipse’. 

EEE further extended its Australian footprint this year by acquiring a 70pc interest in three prospective copper-gold projects from Century Minerals, increasing the size of the company’s exploration camp from 9.5 km2 to 1,728 km2. The Pitfield Project is based in the Western Yilgarn province, within the Neoproterozoic Yandanooka basin, a globally important copper mineralisation era encompassing the highly mineralised Paterson province in the north of Western Australia, host to major copper and gold deposits such as Newcrest Mining’s Telfer Mine, Rio Tinto’s Winu Project and the Havieron Project, a joint venture between Newcrest and Greatland Gold. The Stavely Project is located within the Stavely Arc, which may represent the underexplored northern extension of the prolific Mount Read Volcanic Belt of Tasmania, host to several world-class mineral deposits including the Mt Lyell copper-gold deposit, the Henty gold deposit and the Rosebery and Hellyer polymetallic deposits, all of which seeded profitable mines. The Stavely project sits along strike from the important recent discoveries made by Stavely Minerals at the Thursday Gossan Project. EEE and Century have secured AUD$0.5m in co-funding for exploration from the government of Victoria State. The Walton Project is located in the underexplored Yerilgee greenstone belt within the Southern Cross domain, part of the 2.9 Ga Western Yilgarn greenstone succession that hosts the world-class Golden Grove volcanic-hosted massive sulphide (VHMS) system, and several other emerging VHMS prospects such as Cobre Ltd’s Perrinvale Project.

EEE set out a strategy to collect high-resolution aeromagnetics across all three project areas to assist in mapping the basement geology and structures, and to undertake field work programmes including soil sampling, geochemical mapping and potentially aircore drilling to define mineralised footprints and to prioritise targets for further reverse circulation and diamond core drilling programmes.

In April EEE raised £1.7m to support exploration across Pitfield, Stavely and Walton, and ongoing drilling at Eclipse and Gindalbie. Exploration at Pitfield got underway in June with a pair of airborne geophysical surveys that confirmed strong magnetic stratigraphy and alteration within the project area. A more detailed survey was planned to map the geology of the Yandanooka basin, highlighting potentially preferred host rocks for copper, and to identify anomalous conductive areas that may relate to sulphide accumulations or native copper associated with mineralised systems.

Earlier this month EEE announced the survey had indicated ‘a significant structure’ along the western boundary of a magnetic anomaly that closely aligns with a surface copper feature stretching over seven kilometres, previously identified during surface sampling in the early 1990s. The company says the anomaly ‘indicates potential for the presence of magnetite which could be associated with a regional scale alteration event.’ EEE notes that ‘Pitfield is located immediately adjacent to the historic Baxters copper mine at Arrino which produced 106 tonnes of copper at a grade between 20-30pc.’

EEE has also commenced the next campaign of reverse circulation drilling at the combined Eclipse-Gindalbie Gold Project, consisting of over 3,290 metres across 26 drill holes. Several high priority targets have been defined for Gindalbie, which would be targeted to extend high-grade shoots. Drilling at Eclipse would focus on extending the Project’s lode at depth, beneath the old Eclipse mine shaft itself, as well as pursuing an extension of the Eclipse shear northwest of the Jack’s Dream prospect. 

The company has been able to report positive results: of the 13 RC holes drilled at the Homeward Bound target, four reported significant intercepts with the best of the drill holes intersecting three new mineralised zones, including 2m @ 1.92 g/t Au from 79m downhole. Promising intercepts were also reported at Budd’s Find and Bulletin from four of the seven holes drilled, including 2m @ 3.30 g/t Au from 117m downhole. Of the six holes drilled around the Eclipse and Jack’s Dream shafts, two reported significant intercepts, including 3m @ 2.20 g/t Au from 165m at Eclipse. EEE said the results supported the company’s ‘hypothesis that the combined Eclipse-Gindalbie project has the potential to support a significant gold resource’. The holes completed at the Homeward Bound shaft and Budd’s Find open pit had ‘provided important structural data on the direction of the gold mineralised veins’ which will advance understanding of the structural model of the wider project area.

Outlook

 

EEE’s most recent annual report, published in June, stated a loss for the twelve months ended 31 December 2021 of £589,254, as against £572,989 for the previous year. The company had cash of £2.7m at the time of publication of the report. During the reported period, EEE had, in addition to fundraisings, secured $3.3m from the sale of its assets in Georgia.

The company is now well and truly reoriented towards Australia, reporting good progress on confirming the promise of all of its new assets. (It’s worth noting Empire also holds a portfolio of three precious metals projects in central-southern Austria, which may come into play depending on its progress in Australia.) EEE’s share price tumbled after the company closed its Georgian venture and took early steps to establish itself in Australia. It has since stabilised around the 1p to 1.5p mark, currently 1.10p at the time of writing.

With ongoing exploration at Eclipse-Gindalbie, and new prospects at Pitfield, Stavely and Walton, EEE is a slow burner worth watching. It’s also interesting to note that further positive updates could coincide with an upturn in the price of gold. Rising US interest rates and a strengthening dollar have weighed on the value of the precious metal in recent months, which has dipped below $1,800 a troy ounce. But analysts believe that any additional evidence that the global economy is moving into stagflation – a combination of low or no growth and persistently high inflation – should increase interest in gold from investors seeking diversification. Any indication that the Fed may ease its current programme of monetary tightening – which some forecasts suggest could happen as soon as next year – could also push prices up.

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