Australian exploration company Thomson Resources hopes to make the next big tin discovery in a historic mining region of western New South Wales.
The Thomson Fold Belt in Cobar, New South Wales, is a region of deformed and intruded sediments and volcanics thought to be the unexplored northern extension of one of Australia’s best metalliferous mining districts, the Lachlan Fold Belt. Junior exploration company Thomson Resources (ASX: TMZ) secured a dominant tenement position in this mineral belt in 2010, in hope of unearthing the next great discovery.
Thomson has a number of Intrusion-Related Gold prospects in the belt, as well as tin, tungsten, copper, zinc and VMS prospects in the surrounding area. Chief Executive Eoin Rothery, an experienced explorer in a variety of minerals, explains why the exploration company decided to focus on this area.
“We think we’re in the right area in the Cobar district – it’s a very rich area with a 100-year mining history, where lots of deposits have been found, even up to May of last year,” he says.
“There are no problems with land access either – there are relatively few landowners to deal with and, due to the area’s long mining history, they typically know just what to expect and are happy to see us. There are also copper mills and lead-zinc mills nearby, as well as a rail line going through the middle.”
Many other mining companies seem to agree. Existing mines in the area include CBH Resources’ zinc/lead/silver mine, Endeavour, just 30km south of Thomson’s tin prospect; Glencore’s copper mine, CSA; and Newgold’s gold mine, Peak. Just last year, Peel Mining made a very significant copper-polymetallic discovery in the Cobar area that it has called Mallee Bull.
“Cobar’s an amazing place, because it has world-class lead-zinc at Endeavour, world-class copper at CSA and a gold mine as well as Peak,” comments Rothery.
“So it’s a polymetallic province and you’re never really sure of which commodity you’re going to pick up. Even with the tin anomaly we’ve been looking at, there is also tungsten associated with it, as well as lead, zinc and gold anomalies in the same area. But right now we’d especially like to find tin, as it’s a very valuable commodity – approximately AU$22,000 per tonne, so you don’t have to find too much of it to make for a really good deposit.”
Tin and other metals
Thomson’s tin prospects are the Wilgaroon Tin Project at the northern end of the Wagga Tin Belt; the historic Victory Tin Project, and recently the Basin One tin skarn prospect within the Mt Jacob Project, adjacent to the historic Willi Willi copper mine;.
“Tin is very much in demand at the moment and we think we have a lot of tin potential on our properties,” says Rothery.
“The Wilgaroon prospect, in particular, sits on an extensive area of granite-related tin potential. It’s the northernmost identified granite that has tin potential in the Wagga Tin Belt and only one hole has been drilled there, which found up to 2.5% tin. So we’re keen to explore around that area. It has outcrop and is amenable to shallow surface sampling and rock chipping, so we’ll be looking for geochemical anomalies and trying to identify hotspots in the geochemistry so that we can begin drilling.”
Thomson is still waiting to be granted the exploration licences (ELs) for the Mt Jacob Project and the Victory Tin Project. CRAE discovered a substantial tin deposit at Basin One that hasn’t been drilled at since 1982.
The company also has more conventional ‘Cobar-type’ targets, called Mt Boorithumble and Achilles 3.
Mt Boorithumble has an extensive geochemical anomaly measuring 1km x 750m in shallow drilling; three basement holes, the best of which contains 3m at 2% Pb, 2% Zn, 1.2% Cu, 0.5g/t Au and 150g/t Ag; and a strong IP anomaly to the east of the best hole.
“It looks like a good system, and the IP is showing a definite target to follow up,” comments Rothery.
In 2012, Thomson carried out shallow drilling around the periphery of Achilles 3 and found strong lead anomalism, up to 4m at 0.6% Pb+Cu+Zn. The EM showed an anomaly off to the side. The main target at Achilles 3 has not yet been drilled.
The company was recently granted the Wilga Downs tenement, for VMS exploration.
“It’s a nice anomaly because its 500m long and its only had two holes in it, both of which had anomalous copper, lead and zinc,” Rothery remarks.
“It’s very interesting but at this point we’re still doing initial literature research.”
Gold remains a high priority for Thomson, and its recent application over the Mount Jacob Intrusion-Related Gold prospect could see that ambition realised, with all 16 shallow holes to date intersecting significant gold. Last year it discovered an Intrusion Related Gold (IRG) mineral field in the Thomson Fold Belt. Of 16 holes drilled, 14 were mineralised and only two barren, leading Thomson to identify nine bulls-eye magnetic anomalies indicating nine large, mineralised hydrothermal systems. Initial drilling identified high mineral grades of up to 3.7g/t gold, 4.2% zinc, 113g/t silver, 0.5% copper, 0.8% tin, 0.6% tungsten, 0.9% lead, 0.2% molybdenum. Market conditions among other factors have since persuaded the company to put its deeper targets on the backburner.
Thomson also has two porphyry copper-gold targets previously drilled by other companies: Mullagalah, drilled by YTC, and Warraweena, drilled by Newcrest.
Newcrest drilled three effective holes at Warraweena in 2005. These identified Macquarie Arc shoshonitic-type chemistry, as well as anomalous zinc (717ppm), copper (166ppm) and gold (0.1g/t) in cover rocks. Around 30km of strike length of covered Arc rocks remains untested, but despite the target’s potential this is another low-priority prospect.
“We have 30km of buried volcanic earth, which may be the same age as the rocks that host Newcrest’s Cadia East deposit in NSW, which is one of the top 10 gold deposits in the world,” explains Rothery.
“However, like in the Thomson Fold Belt, it’s difficult and expensive drilling – we had a crack at it this year but didn’t get through the cover, so we need a bigger drill rig.
Because it all takes money, we obviously have to prioritise what we do next. We’re focusing on the cheapest option at the moment – and that’s the tin.”
This year, despite lacklustre financial markets, Thomson aspires to define and drill specific targets on its tin anomalies, while perhaps further developing its Cobar-type deposits. In five years’ time, Rothery is hopeful that Thomson will have achieved a JORC-compliant resource at one of its projects and be in a position to either attract investment to develop it, or sell it if it’s not the required scale for Thomson.
“We’re open to opportunities,” he says.
“We have enough money to keep going through 2014, but we are continually making decisions about our ground, picking up new ground and looking at opportunities, so everything is changeable.”
It’s not easy being a junior explorer in the current financial climate, where investors seem more reluctant than ever to part with their cash. But Thomson has an advantage in its highly competent and very driven team.
“Tony Belperio, one of our directors, was recognised as Prospector of the Year for finding the Prominent Hill iron-copper-gold deposit years ago, so he’s one of the most respected geologists in Australia,” Rothery begins.
“Lindsay Gilligan, our chairman, is a former Director of the Geological Survey of New South Wales and has more than 40 years’ experience in the mining business here, so he knows every nook and cranny. Finally we have director Greg Jones, who was involved in the exploration for CBH Resources’ Endeavour mine, so he’s got some great local experience. He’s also the Managing Director of PlatSearch, one of our shareholders.”
Rothery deems the current investment environment “shocking” and refers to the large number of juniors trying to make it despite that fact. The situation is difficult, he says, but Thomson Resources will not be backing down.
“We need to weather this particular storm, get through it and try to identify something that would lead to a resource, while everyone else is holding onto their money,” he remarks.
“We’re cautious, but we have to keep exploring – that’s our business.”