I am very surprised at these great, high-grade results for the first drill
pass on the first target at Zonte's Cross Hills. Before seeing more details
below, or if you skip down lower, come back for some detail on IOCGs.
What is an Iron Oxide Copper Gold (IOCG) mine? That is a very good and
very important question that I have been grappling with and learning about
for over a year. IOCGs are rare and often massive in scale. There are not any
IOCG mines in Canada, but a few prospects exist. Therefore, junior mining
investors have little knowledge about these. What I have learned, with some
help from Zonte
Metals Inc.'s (ZON:TSX.V) exploration, is that there never seems to be
two alike. An explorer cannot use a known deposit effectively as a model,
except as a general concept. Some deposits are located in magnetic highs and
others peripheral to the magnetic highs. Each IOCG seems to have a different
mixture of metals. With Zonte's Cross Hills it looks like mineralization is
around or near the oxide zones and contains copper (Cu), silver (Ag) and gold
(Au).
This is the technical geological definition, as provided by Natural Resources Canada: "IOCG deposits are
polymetallic hydrothermal mineral occurrences that contain Cu and economic Au
concentrations with potential enrichment in Ag, uranium, rare earth elements,
bismuth, cobalt, nickel, niobium, etc., set in abundant low-titanium
iron-oxide (magnetite, hematite) gangue minerals or associated alteration
sulphide. The sulphide-deficient ore includes native elements and low-sulphur
base-metal sulphides and arsenides, such as chalcopyrite, bornite,
chalcocite, pyrrhotite and arsenopyrite (Corriveau, 2007; Corriveau and
Mumin, 2010). All IOCG deposits are enclosed within regional scale-alteration
haloes of intensely iron oxide-alkali-altered metasomatized rocks and
breccias."
The most well known IOCG example is Olympic Dam in Australia, operated by
BHP. It is simply the most massive mineral system in the world. In the past BHP has stated there are 500 years of mining life left
and new discoveries could add centuries to this. Currently its proven
reserves make it the largest uranium deposit in the world and fourth largest
copper deposit, and they have only scratched the known system.
These are regional-scale systems and we know that Cross Hills has several
more anomalies that exemplify this. For that reason and the large-scale
potential of these systems, I am certain the majors are going to soon rush
into the Cross Hills area.
The best know occurrences in Canada, before Zonte's Cross Hills, are in
the Northwest Territories/Great Slave Lake region. It is
remote and reserves defined to date are small. Fortune Minerals
Ltd.'s(FT:TSX) NICO has 33 million tonnes at 1.02 g/t Au, 0.12% cobalt and
0.04% copper. Sue-Dianne is only 8.4 million tonnes at 0.80% copper with 0.07
g/t Au and 3.2 g/t Ag. There is also the Michelin project in Labrador. These
deposits could be bigger, but in recent years it has been difficult to raise
exploration funding for projects like these inremote areas. Read more in a 2018, 154-page IOCG publication.
Cross Hills is different. It can be worked year-round, has road access, a
high-voltage power line through the property and is close to a sea port.
The major miners are very aggressively looking for copper and I expect
that, before the end of the year, one or more of them will be all over Zonte
and the Cross Hills region. Mining giant BHP Billiton Ltd. (BHP:NYSE;
BHPLF:OTCPK) made a decision in 2016 to raise its annual exploration spending
by 29%, allocating nearly all of its $900 million budget to finding new
copper deposits to add to a portfolio that includes Escondida in Chile, the
world's biggest copper mine, and the Olympic Dam.
Zonte Metals: recent price $0.33; entry price $0.15; opinion = strong
buy
Zonte released the first drill results from the Cross Hills
project in Newfoundland, and they definitely surprised me and came back way
better than my best expectations. I was expecting lower grades over longer
widths, and that any high grade would maybe be 5% or 6% copper and 2 or 3 g/t
gold.
Zonte expedited assays on parts of drill hole 19-004 based on visual
observations in the drill core. Here is a pic of the high-grade intersect.
This ran 14.0% Cu, 15.8 g/t Au and 352 g/t within a 0.43 m interval sitting
in a 2.76 m interval that averaged 2.89% Cu, 2.65 g/t Au, 73.3 g/t Ag.
This drill hole also had some more low-grade intercepts from 204.41 meters
to 243 meters.
In first pass drilling the idea is to test different parts of the target
and different theories. Drill holes 19-001 and 19-002 tested the magnetic
highs in the anomalies and only intersected some anomalous copper values. It
appears thus far that mineralization is in the transition zone from high to
moderate magnetics.
Drill hole CH-19-004 was set up to test the eastern side of the Dunns
Mountain magnetic anomaly, aiming to pass under the magnetic high, in the
'transition' from high to moderate magnetics. This was the only drill hole
targeting the transition zone in the magnetic profile. The company noted a
number of discrete visually mineralized intervals were noted throughout a
70-meter interval, between 168 and 243 meters, sitting directly below a
magnetic high. The hole was initially drilled to a depth of 204 meters and later
deepened to 283 meters copper mineralization was discovered in the last meter
of core.
This graphic shows the orientation of drill hole 19-004. It went under the
small anomaly, the larger one was not tested in this fashion.
This high-grade intersect is narrow at just under a half-meter but you
don't get numbers like this in the drill cores unless there is a very
significant source for this mineralization. This drill program has gone a
long way in aiding Zonte in finding this source in the next drill round.
Key Points
- Waiting on results for drill hole 19-003 and 19-005;
- Very high grade for first results: 14.0% Cu, 15.8 g/t Au
and 352 g/t within a 0.43 m interval;
- Drill sample much higher than any surface samples and
system hidden at depth;
- Fertile IOCG system represents the early stages of
defining a new copper belt in Canada;
- A new copper belt will get the attention from major
miners;
- Zonte controls 25 kilometers of strike length in this
new copper belt;
- Fertile IOGC system means other anomalies yet to be
drilled are likely mineralized;
- Planning for a phase 2 drill program is underway and
program expanding;
- Phase 2 drilling, further testing at Dunns and initial
drill tests at Carols Hat or K6 or both;
- Planned gravity surveys will help pinpoint targets
outside and near the magnetic highs.
"This is an exciting new discovery for Zonte Metals, adding to our
growing portfolio of large- scale mineral opportunities. Early indications
show a discovery that has all the geologic signatures of a copper-rich
fertile IOCG target and possibly a new copper belt in Canada. The Company
controls 25 kilometre strike length of the belt with the Dunns Mountain
target located at the northern end. In light of these results Zonte will
increase its exploration and drilling program at Cross Hills," states
Terry Christopher, president and CEO of Zonte Metals.
On the drill map above, drill hole 19-005 looks like it might be crossing
some magnetic transition zones and might see some decent numbers. Having been
to the property and the Dunns target I can appreciate the sophistication of
Mother Nature and her secrets. Hole 19-004 was on the other side of the large
Dunns hill from where I looked at the target, and at the time it was not
considered an area of interest. My, my, how things can change.
The press release also stated: "In preparation for phase 2 drilling
at Dunns Mountain, additional geophysics will be carried out including ground
magnetics, Induced Polarization (IP) and a gravity survey to first define the
area to be tested around drill hole CH-19-004 and secondly aim to identify
additional targets along the periphery of the magnetic anomaly. These surveys
will also cover the anomalies 2.5 km to the south in the Carols Hat target
area. In addition, the Company will complete a deep penetrating IP and
gravity surveys, over the K6 target in preparation for phase II drilling. The
K6 target sits 12 kilometres south of Dunns Mountain."
On the chart, I have been watching the wedge pattern and today we can
clearly see a breakout from the wedge to the upside. I expect the stock will
move much higher. Normally on breakouts with good news, a stock will go up 3
or 4 days in a row before consolidating.
Struthers' Resource Stock Report 23 years ago. The report covers
senior and junior companies with ample trading liquidity. He started his
Millennium Index of dividend stocks in 2003 - $1,000 invested then was worth
over $4,000 end of 2014 and the index returned 26.8% in 2016. He retired from
IBM after 30 years in customer service, systems and business analyst, also
developing his own charting software. He has expertise in junior start-ups
and was a co-founder of Paramount Gold and Silver.
[NLINSERT]
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