Lots of mining investors get enthused about nearology. Unfortunately in my experience it rarely works out.
Encounter (ENR) continue to come up with very interesting drill results. Their lease is adjacent to the WA1 Resources Limited (WA1) Niobium Oxide discovery at Luni in the remote West Arunta region of WA ,near the NT border. (Niobium? Yep we have all heard of Vanadium and manganese. Nb is another element with very small additions improves the quality of steel. There are days' worth of reading about Nb if anyone is interested).
WA1 are more advanced with their exploration and have released their Maiden Resource estimate just last week. It appears to be a genuine Teir 1 discovery. Money of Mine will quickly get you to speed on it One Year Later – Is WA1 the Real Deal? (youtube.com) . The whole thing looks like this:
200mt at 1% Nb oxide
This contains 53mt of higher grade 2.1% Nb oxide
About 200 mt of earth @ 1% Nb.
All up 1,900,000 ton of Niobium oxide
The ore body is very roughly about 2km long and 750m wide
It sits about 30m below the surface and runs down to a depth of about 200m.
WA1, representing this piece of godforsaken piece of desert is now market cap about $1.1b
ENR have a number of very prospective Nb targets in a lease adjacent and to the north of WA1.
This morning ENR releases results for their “Crean” and “Emily” targets.
Crean came back with the following drill highlights:
52m @ 3.0% Nb2O5 and 1.7% TREO from 81m to EOH incl. 16m @ 6.0% Nb2O5 (EAL256) –
32m @ 2.5% Nb2O5 and 1.8% TREO from 67m to EOH incl. 12m @ 3.3% Nb2O5 (EAL155) –
15m @ 1.5% Nb2O5 and 1.1% TREO from 120m to EOH incl. 2m @ 3.3% Nb2O5 (EAL257)
And 200m to the east they get the following:
- 46m @ 3.1% Nb2O5 and 1.2% TREO from 60m to EOH incl. 4m @ 6.4% Nb2O5 (EAL239)
- 18m @ 3.2% Nb2O5 and 1.4% TREO from 76m incl. 2m @ 17.0% Nb2O5 (EAL238)
Looking at Crean alone you can easily make a case for 1mt of ore at about 2% Nb. Say very roughly 1% of the size of Luni, with it being potentially higher grade however deeper down. The most prospective area is to the west which still being drilled. However now still a baby.
The Emily target is within a couple of hundred meters of the WA1 Luni resource and their latest drill release today is the following:
-16m @ 2.7% Nb2O5 & 1.0% TREO from 50m to EOH (EAL260)
- 20m @ 2.7% Nb2O5 & 0.8% TREO from 41m to EOH (EAL225)
Further drilling is underway to the west.
ENR representing another piece of godforsaken of desert is today now market cap around $400m.
Of course what we don’t know yet is just how much is there, the grade, the depth, the metallurgy and a whole lot more.
Though it looks as if ENR are onto to something.
Even if it proves to be an inferior resource to Luni it may be a great adjunct to a Luni mine sometime in the future. So if the ENR drilling comes up short the share price may not go all the way to zero. There are worse punts out there.