AKN delivers 30% upgraded JORC resource at base metals flagship
Today our Catalyst Hunter junior base metals investment Auking MIning Ltd (ASX:AKN) announced a substantially upgraded mineral resource estimate (MRE) at its flagship Koongie Park copper / zinc project in Western Australia.
Following last season’s drilling program, AKN delivered a 30% increase to the MRE, which now stands at:
8.9Mt @ 1.01% Cu, 3.67% Zn, 0.16g/t Au, 32g/t Ag and 0.77% Pb
This ties in with the #1 Objective we wanted to see AKN deliver this year, as per our Investment Memo.
The initial market reaction to today’s news has been lacklustre, given AKN is down ~20% to be trading at ~ 17 cents per share. Despite the resource upgrade being positive, we suspect that the touted upcoming capital raise to fund AKN’s move to full ownership of Koongie Park could be holding the share price back.
We suspect once that transaction is completed and all new shares are issued, it will provide the AKN share price a base to hopefully start moving upwards as AKN kicks more goals.
We like that the upgrade to the JORC resource has been substantial - furthermore, almost all the MRE is now in the Indicated classification (97%), improving the confidence level of the resource estimate.
The new MRE also indicates a seriously large deposit, especially for such a small company, currently capped at $15.8M.
AKN’s flagship copper project comprises several mining, exploration and prospecting licences covering over 500 km2 in the highly mineralised Halls Creek region of Western Australia.
AKN’s JORC resource sits across two deposits:
- the “Sandiego” deposit which is at depth and would be mined using underground mining methods, and;
- The “Onedin” deposit which is a shallow high-grade copper deposit starting basically from surface.
The resource upgrade primarily comes on the back of drilling at these two most advanced prospects, which are within existing mining licences and granted pre Native Title Act - which will be useful for fast-tracking development.
With the upgraded MRE, the new total metal values now include:
- 90k tonnes copper;
- 326k tonnes zinc;
- 46koz gold;
- 9.1Moz silver; and
- 68k tonnes lead.
With the upgraded MRE now crossed off our list, the next key objective we’d like to see achieved are the results from stage 1 of the metallurgical test work on the Onedin prospect.
As there is a combination of oxide material and several other metals, the metallurgy at the project is complex. Hence a metallurgical solution could unlock the shallow near-surface ore at Onedin, potentially providing an early path to production and cashflow generation.
The results are expected within the next few weeks.
