Accordingly, it has to this point acquired projects in proven mineral provinces within Australia, including a substantial tenement holding within the Albany-Fraser Belt in Western Australia, host to Australia’s two most important discoveries of the last decade (the Tropicana gold deposit and the Nova nickel-copper-cobalt deposit).
Part of this tenement holding was acquired from entities associated with Mark Creasy, who is now a substantial shareholder in Orion Gold. The area was previously explored by mid-cap nickel producer Western Areas, which identified mafic-ultramafic intrusives within the project area, as well as nickel-copper-cobalt-PGE anomalies. Orion has defined 34 targets by a combination of methods.
Orion also maintains a large tenement package within the Connors Arc in Queensland, where an intermediate sulphidation, epithermal gold and silver system has been identified at Aurora Flats. The project lies 120km northwest of Rockhampton, situated between the active mining operations of Cracow (plus two million ounces produced) and the more recent Mt Carlton mine.
Diamond drilling at Connors Arc intersected encouraging structures at the newly identified Chough prospect. The results have confirmed the presence of what is potentially a new epithermal system. Drilling has targeted a number of features identified from mapping and surface sampling.
Encouragingly, very strong quartz-sericite (illite) alteration is noted over wide intervals. This is characteristic of the upper levels of very large epithermal systems and is similar to the alteration observed in the volcanic units above the Vera-Nancy deposit at Pajingo (Evolution Mining).
Orion Gold also confirmed the potential of a newly identified target area to the north of its Veinglorious prospect, which also forms part of its Connors Arc project. Systematic rock chip sampling has generated three samples returning assays greater than 100 grams per tonne silver, along with strongly-anomalous gold grades. One sample returned assays of 2.75gpt gold and 629gpt silver, an exceptional result for a sample from the upper levels of an epithermal system.
Most recently Orion has secured an option to acquire 73.3% of the historic Prieska copper mine, 270km southwest of Kimberley in the Northern Cape Province of South Africa. Prieska is a proterozoic VMS deposit and produced some 430,000t of copper and 1Mt of zinc from 47Mt of ore between 1971 and 1991, and was considered one of the 30 largest VMS deposits known globally.
Historical mining was limited to underground, sulphide ore, with most of the mine infrastructure currently in place to access the dip and strike potential demonstrated in historic drilling. This includes an 8.8m diameter, 1024m deep concrete lined vertical shaft and three separate ramp declines. These could provide capital advantages, should the project be developed. In addition, there is regional infrastructure including water, power, bitumen roads, rail connection to a deepwater port and an airstrip at the mine site.
Included within the Agama package is the Marydale gold project, about 60km northwest of Prieska. Drilling by the vendors has intersected up to 50.4m at 2.68gpt gold from near-surface, in what Orion interprets as a structurally complex epithermal system.
Importantly, the South African acquisition also includes new order prospecting rights, with the vendors, Agama, already having in place the black economic empowerment 26.7% holding required by law. In addition, the Prieska asset includes a fully funded 17.3 million rand (about $A1.7 million) environmental trust.
Orion is currently at an advanced stage of carrying out due diligence, with the $A8 million option exercisable before July 31, 2016, with a total of $A165,000 in monthly option payments required to maintain the option.
The due diligence process will be helped by access to professionals with previous experience at Prieska.
Depending on the results of due diligence and subsequent feasibility studies, Prieska provides a cheap entry into a large-scale, near development base metal opportunity to take advantage of the next upturn in the resources cycle.
Results from Marydale are also very encouraging, and provide additional upside, leveraging on Orion’s epithermal exploration expertise.
Orion Gold is in essence a simple story – its exploration focus at present is Connors Arc in Queensland, where highly encouraging results continue to be obtained in its exploration push to identify high-grade epithermal gold, which is typical of the region. With the potential acquisition of Prieska, Orion has adopted a sensible strategy of portfolio expansion and diversification through the counter-cyclical acquisition of advanced projects at low-priced valuations.
