Pursuit set to acquires ELA’s close to Chalice’s Julimar Project

In what is shaping up as a highly promising opportunity for Pursuit Minerals (ASX:PUR), the company has gained an opportunity to acuire four highly prospective land positions totalling 593 square kilometres in an emerging nickel-copper-platinum group elements (PGE) region of Western Australia.

The four Exploration Licence Applications (one granted exploration licence and three exploration licence applications known as Calingiri East, Calingiri West, Bindi Bindi and Wubin), are collectively termed the Warrior PGE-Nickel-Copper Project.

These are located between 20 kilometres and 170 kilometres to the north of Chalice Gold Mines Ltd’s (ASX:CHN | OTCQB:CGMLF) Gonneville Julimar discovery.

The Gonneville deposit on Chalice’s Julimar Project has the potential to be the most important deposit of palladium (Pd) in Australia.

Acquisition terms include a mix of cash and equity

Pursuit has paid $100,000 (refundable) with the balance of $200,000 in cash and 40 million fully paid ordinary shares payable following the transfer of two granted EL’s (expected to be Bindi Bindi and Calingrini East). Following transfer of all tenements, an additional 10 million shares will be issued to the vendors.

In addition, Pursuit will grant the vendors a 1% net smelter royalty on all minerals produced from the tenements and a milestone payment of $200,000 in cash on achieving a mineralised drill intersection on one of the tenements of at least 10 metres of 2% nickel equivalent or better, or a narrower intercept containing at least the same level of nickel equivalent metal.

In conjunction with the acquisition, the vendors will participate in a placement of up to $200,000 through the issue of shares at $0.009 each (the same price as the company’s recent placement and rights issue).

Initial fieldwork to commence in March quarter

The western margin of the Archean Yilgarn Craton is highly prospective for Platinum Group Elements (“PGE”) and Nickel (Ni) – Copper (Cu) mineralisation associated with intrusive mafic to ultramafic rocks.

The discovery of PGE-Ni-Cu mineralisation on the Julimar Project held by Chalice Gold Mines in 2020, is the first significant PGE-Ni-Cu discovery in the region which previously only had early-stage indications of mineralisation (Yarawindah, Bindi-Bindi).

The PGE-Ni-Cu mineralisation hosted by the ultramafic-mafic Gonneville intrusion on Chalice’s Julimar Project has the potential to be the most significant PGE deposit in Australia with accessory nickel and copper.

Increasingly it is becoming apparent that the prospective mafic-ultramafic intrusions which host this PGE mineralisation are far more widespread than previously thought throughout the western margin of the Yilgarn Craton, but the area of the Warrior Project remains poorly explored for PGE’s as well as base and precious metals.

The PGE-Ni-Cu mineralisation at the Gonneville mafic-ultramafic intrusion was discovered by drilling a discrete moving-loop electromagnetic (“EM”) anomaly associated with a high amplitude aeromagnetic anomaly.

The aeromagnetic anomaly is due to the mafic-ultramafic intrusion which hosts the PGE-Ni-Cu mineralisation.

The PGE-Ni-Cu mineralisation at Gonneville is strongly conductive and produces a significant anomaly in electromagnetic data.

The Gonneville intrusion is under shallow cover and had never been previously explored for PGE-Ni-Cu mineralisation prior to Chalice’s exploration program.

Pursuit to employ similar exploration strategy to Chalice

Chalice’s exploration success has demonstrated that the exploration approach of identifying prospective mafic-ultramafic intrusions from aeromagnetic data and then generating drill targets with electromagnetic surveys, is an effective method for targeting PGE-Ni-Cu sulphide mineralisation within the West Yilgarn province.

Consequently, Pursuit intends to employ a similar exploration approach on the Warrior Project.

Pursuit is currently undertaking interpretation of the available geophysical exploration data to define corridors prospective to host mafic-ultramafic rock units.

These will be further investigated with electromagnetic surveys and geochemical sampling in order to define and prioritise drill targets.

Electromagnetic and geochemical surveys have proven to be particularly useful on Chalice’s Julimar Project to locate PGE-Nickel-Copper mineralisation.

Pursuit will undertake its initial fieldwork on the Warrior PGE-Ni-Cu Project during the January-March quarter 2021.

This work will consist of prospect scale geological mapping, rock chip and soil geochemistry, along with planning for electromagnetic surveys and an initial drill program.

Initial work on the project has commenced and it has focused on the interpretation of aeromagnetic data covering the four tenements in order to identify magnetic anomalies that are potentially due to mafic and ultramafic intrusions.

Management plans to expedite the granting of the tenements and is progressing discussions with various landowners, native title groups and government agencies.

Aircore drilling confirms prospectivity

Previous geochemical sampling on the Calingiri East tenement application defined a gold and copper anomaly over 14km of strike, and 32 samples assayed for Pt and Pd returned highly anomalous values of up to 73ppb Pt+Pd.

Limited follow-up aircore drilling was not assayed for PGE’s, however, returned anomalous gold, copper and tungsten and mafic rocks were intercepted.

Highlighting the significance of the Warrior project, Pursuit managing director Mark Freeman said, “Chalice’s discovery of PGE-Ni-Cu mineralisation in the Gonneville intrusion has opened up the West Yilgarn province for a new style of mineralisation which has world-class potential.

''Through the acquisition of the Warrior Project, Pursuit now has a significant land position within this highly prospective province, and the four tenement applications which comprise the Warrior Project, contain a number of aeromagnetic anomalies whose characteristics are similar to the magnetic expression of the Gonneville intrusion.

''Pursuit will now look to finalise the acquisition of the Warrior Project as quickly as possible, conclude land access agreements and commence the electromagnetic and soil geochemical surveys to generate targets for drill testing”.

As indicated below, Pursuit’s Calingiri West (E 70/5378) tenement goes close to abutting Chalice’s Gonneville PGE-nickel-copper-cobalt discovery while Calingiri East (E 70/5379) is also in close proximity.

The West Margin of the Yilgarn Craton is highly prospective for Platinum Group Elements and Ni-Cu mineralisation associated with intrusive mafic to ultramafic rocks.

The area remains underexplored for base and precious metals due to lack of outcrop, the predominance of farmland and the prior focus of exploration companies on bauxite and iron.

The area also remains prospective for Boddington-style porphyry gold and/or copper mineralisation.

Taking into account near-term costs, Pursuit has cash of $2.3 million which will be sufficient to mount an aggressive exploration program.

Is Pursuit in line for a market cap-based share price rerating

There has also been other extensive interest in the region as Devex Resources Limited (ASX:DEV) and Mandrake Resources Ltd (ASX:MAN) have made forays into the area with shares in the latter having doubled in the last month.

Devex has also traded strongly with its shares having surged 50% in the last three weeks.

Mandrake’s Jimperding Project lies approximately 30 kilometres east of Chalice’s Julimar Ni-Cu-PGE discovery announced on 23 March 2020.

The 140 square kilometre exploration licence application (ELA) comprising the Jimperding Project was applied for on 4 March 2020, prior to the Julimar discovery announcement and prior to Chalice pegging over 2000 square kilometres of ELAs contiguous to the Jimperding Project.

Consequently, it isn’t surprising to see that the area has become a hot spot for investors.

Should Pursuit’s ELAs be approved, its landholding will be four times that of the ELA comprising the Jimperding Project.

With both companies at the pre-drilling stage, on balance one would expect Pursuit’s revised valuation to be at least in line with that of Mandrake.

Consequently, as investors examine the significance of Pursuit’s entry into this area its market capitalisation of about $10 million could well draw in line with Mandrake’s market cap of about $30 million.

There is also an interesting new entrant in Caspin Resources Ltd which commenced trading on Wednesday when it closed at more than double the IPO price, and the company is now trading at a premium of more than 200% relative to the IPO price.

However, Chalice is the kingpin in the area and the following graphic demonstrates how quickly the progress that it made in 2020 resulted in an outstanding uptick in the group’s valuation.

In particular, note the potential rerating that occurred in September on the back of electromagnetic data, as such data has already shaped Pursuit’s acquisition strategy, and it will also feed into the identification of early-stage exploration targets.

It is worth noting in considering the prospect of Pursuit being the subject of a rerating that Chalice’s market capitalisation as at 31 December 2019 was only $62 million, but after a transformational year it is now sitting above $1.2 billion.

Devex aeromagnetic data appears promising

As a further means of comparison, Devex Resources which has tenements that are in similar proximity to Chalice’s ground where Julimar is located has a market capitalisation of approximately $74 million.

As indicated below, Devex recently received preliminary data in relation to multiple airborne electromagnetic conductors of up to 1 kilometre in length at the Kingsley, McKenzie and Hudson prospects (part of the Sovereign Magnetic Complex), all situated in close proximity to Calingiri West tenement application E 70/5378.

The aeromagnetic data covering the Calingiri West tenement application exhibits a thin belt of north-south trending aeromagnetic anomalies which are interpreted as being due to prospective meta-greenstone belts and intrusive mafic/ultramafic rocks.

The Calingiri West tenement application, E70/5378, is located between the Julimar (Chalice Mines Limited) and Yarawindah Brook (Caspin Resources Limited) Ni-Cu-PGE projects.

Prior exploration had been focussed on bauxite and the bedrock geology is not well known. Gonneville style PGE-Ni-Cu mineralisation is associated with mafic intrusions, which exhibit strong aeromagnetic anomalies

Individual aeromagnetic anomalies within this north-south linear belt are prospective for Ni-Cu-PGE mineralisation and will be the focus of initial exploration.

The importance of Pursuit gaining first-mover advantage in this region can’t be understated.

It is becoming increasingly apparent that the prospective mafic rocks discovered to date are far more widespread than previously thought.

This year’s discovery of the nickel-copper-palladium mineralisation on the Julimar Project by Chalice is the first significant find in the region which previously had shown only early-stage indications of mineralisation at Yarawindah and Bindi-Bindi.

Interestingly, one of the ELAs acquired by Pursuit (E 70/5392) covers part of the Bindi Bindi Intrusive Complex which manifests as scattered outcrops of weakly magnetic ultramafic rocks that have been intruded by negatively magnetised younger dolerite dykes.

The aeromagnetic data suggests that the ultramafic rocks prospective for PGE-nickel-copper mineralisation are more widespread than indicated by surface outcrops.

Outcrops of ultramafic rocks mapped by the Geological Survey of Western Australia, 11 kilometres to the north-north-west of Bindi Bindi, are likely to be the northern continuation of the Bindi Bindi ultramafic, giving further credibility to the interpretation that the prospective Bindi Bini intrusion is much larger than currently known.

Minor anthophyllite was mined from the tenement application area in the 1930’s and Poseidon NL explored for Ni-Cu in 1968-1969.

Two nickel prospects that occur within the Bindi Bindi tenement application were explored by Poseidon and exhibited soil geochemical values up to 4,700ppm Ni and rock samples up to 4,400ppm Ni, which are both considered to be highly encouraging.

Thirty rock chip samples from the Bindi Bindi tenement application were collected in 2008, returning values up to 4,000ppm Ni and 318ppb Au from ultramafic and ironstone accretions.

Pd and Pt were weakly anomalous (up to 6ppb and 9ppb respectively).

However, 2.8 kilometres south of the tenement application boundary, and along the strike of the prospective aeromagnetic anomaly, a rock chip sample returned 452ppb Pd, which is assessed as encouraging and again indicates that the prospective rocks occur over a larger area than previously thought.

Calingiri East also looks promising

Tenement application E70/5379 (Calingiri East) as shown on the first map is just 10 kilometres south of the +600 million tonnes Caravel copper-molybdenum project.

Prior work within the tenement application area focused on identifying porphyry copper-molybdenum deposits, similar to Caravel, which resulted in the discovery of a 14 kilometre long copper-gold geochemical anomaly at the Ablett prospect, associated with greenstone rocks of the Western Yilgarn province.

Dominion Mining collected over 3,389 auger geochemical samples and drilled 41 aircore holes totalling 1,384 metres of aircore drilling.

Kingsgate conducted further follow-up drilling with 53 aircore holes, and at the Ablett prospect a coincident magnetic-gravity anomaly has associated strongly anomalous soil geochemistry on two lines.

Prior drilling focused on copper and gold, with explorers not assaying for PGE’s.

Importantly though, half of the drill holes intercepted mafic rocks anomalous in gold, copper, Ardenitte (As) and tungsten (W), a positive indication as mafic rocks are associated with PGE-nickel-copper mineralisation at Gonneville.

The target ultramafic-mafic intrusions exhibit strong anomalies in regional aeromagnetic data which will allow exploration for PGE-nickel-copper to be quickly focused on the prospective mafic and ultramafic rocks.

Having identified the prospective mafic and ultramafic intrusions, electromagnetic surveys will be conducted over the source of the aeromagnetic anomalies to generate drilling targets.

Wubin geology similar to Chalice’s tenement, just 2.5 kilometres to the west

It is a different story with the Wubin area (E 70/5493) as exploration focusing on PGE-nickel-copper mineralisation was undertaken.

The area contains widespread, but isolated greenstone remnants.

Gabbro, dolerite and ultramafic rock types have been mapped and logged in drilling results, indicating that the tenement application area does contain the correct rocks to host PGE-nickel-copper mineralisation.

In previous drilling Pd was not routinely assayed for, but anomalous Pt (platinum), Cu and Au did occur in some of the shallow drilling.

Importantly, the same prospective mafic and ultramafic rocks as are present at Wubin, occur 2.5 kilometres to the west on a Chalice tenement where these rocks are anomalous in Pd and Pt.

Only 9 RC drill holes have been previously drilled within the Wubin tenement application area for a total of 794 metres.

Management noted that some of the encouraging results for nickel-copper-PGE mineralisation included:

BRC017: 16m @ 8.8ppb Pt from 28m, 16m @ 240ppm Cu from 20m, 16m @ 11.8% MgO from 40m.

BRC020: 8m @ 10ppb Pt from 20, 32m @ 5.9% MgO from 8m, 28m @ 5.8% MgO from 72m.

BRC021: 20m @ 10ppb Pt from 0m, 24m @ 201ppm Cu from 4m and 40m @ 7.1% MgO from 4 metres.

Also, within the Wubin tenement area, 143 shallow aircore holes have been drilled for 3,006metres.

Encouraging results for Ni-Cu-PGE mineralisation included 12m @ 22ppb Pt from 0m, 11m @ 14ppb Pt from 0m and 7m @ 322ppm Cu, 237ppm Ni from 32m.