Dear Subscribers,
Please find attached Ocean Equities’, a UK brokerage house specializing in the natural resources sector, research note on Voyager Resources Limited (ASX:VOR), as part of their Mongolia exploration update and focus series.
Download the report here
Summary below.
Mogi
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Ocean Equities Mongolia Exploration Update: Voyager Resources Ltd
March 9 (Ocean Equities) --
A maiden resource in the next quarter is expected to be a transitional point supporting an attractive mid-scale development project with further significant upside potential
Source of the Opportunity
Voyager Resources Ltd (‘Voyager’ or ‘the Company’) is the most advanced, independent copper exploration and development play in Mongolia with a controlling interest in three promising projects, all drill tested. Recent aggressive exploration at its flagship asset, the KM project (‘KM’), continues to intersect some of the best copper mineralisation reported in-country outside of the world-class Oyu Tolgoi (‘OT’) deposit with results highly encouraging from the three discoveries made since drilling commenced only 8 months ago. Encountered mineralisation has drawn comparisons to the Chilean porphyry systems and the project is located in the Edrene Island Arc Terrain which hosts a number of large mineralised porphyry systems including OT and the nearby Zuun Mod system.
The magmatic hydrothermal breccias intersected in drilling at the Cughur, Gaans (~2.5km to the east of Cughur) and, more recently, Aranjin prospects (~1km NE of Cughur) at the KM project are now believed to have formed as intrusive breccia pipes that have been emplaced or fed from a large porphyry stock or stocks. Five mineralised hydrothermal breccia pipes have been drill tested (of which only three have assay results available) out of 29 occurrences identified to date in outcrop and subcrop. Drilling results have consistently intersected broad copper mineralisation at or near surface including: 116m @ 2.4% Cu & 7.2g/t Ag (from 30m at the Cughur prospect); 72m @ 1.2% Cu & 8.8g/t Ag (from 14m at the Gaans prospect); and, 168m @ 0.74% Cu & 5.4g/t Ag (from 76m for the first hole at the Aranjin prospect) with higher grade intercepts of chalcocite and chalcopyrite mineralisation indicating potential primary mineralisation (eg 50m @ 3.5% Cu & 10.8% Ag and 34m @ 3.9% Cu & 14.7 g/t Ag respectively).
Ocean Comment
Voyager is looking to undertake a four part strategy at the KM project:
i. defining a maiden resource, the majority of which will be from the Gaans, Cughur and Aranjin prospects, and completing initial metallurgical analysis by Jun’Jul’12;
ii. determining the potential of the remaining 26 near surface hydrothermal breccia pipes already identified;
iii. gaining an understanding of the potential for a primary source of mineralisation; and,
iv. beginning feasibility studies/permitting for a +3Mtpa operation. The definition of a maiden ~30Mt @ ~1% Cu resource, with anticipated favourable met analysis, the majority of which will be from three near surface hydrothermal breccia pipes, is expected to be a transitional point for Voyager as it provides visibility for an attractive medium scale development project whilst highlighting the exploration upside of the remaining 26 largely untested near surface breccia pipes (let along the potential for a larger primary source of mineralisation or further near surface pipes).
The Company has completed +40,000 metres of drilling as part of its 50,000 programme for the first 10 months of exploration at KM. Voyager has stated an exploration target of 50-150Mt @ 0.8-1.5% Cu for the hydrothermal breccia targets (excluding the larger porphyry target). We expect a maiden resource in the order of 20-40Mt @ 0.80-1.20% Cu (mid range of ~300,000t contained copper) to be announced in Jun/Jul’12. The definition of a number of near surface hydrothermal breccia resources offers the potential for an attractive initial development project with a Pre-Feasibility Study (‘PFS’) and mine permitting expected to commence shortly. Recently Voyager has begun a separate drilling programme to test the high possibility of a primary source of mineralisation feeding the identified hydrothermal breccia pipes with initial drilling and analysis being encouraging.
Not many juniors complete this level of drilling within 10 months on an initial discovery. To help put Voyager’s exploration efforts and initial resource target into perspective we highlight Sandfire Resources’ and Rex Minerals who within a year of discovery defined maiden resources of 7.13Mt @ 5.2% Cu (contained copper of 372,000t) and 100Mt @ 0.7% Cu (700,000t copper) at their DeGrussa and Hillside projects respectively. Exploration results, definition of maiden resources and further exploration targets supported a significant re-rating in both Sandfire and Rex’s share price over this period of aggressive drilling. Voyager's first phase 50,000 metre drill programme testing only five prospects of the 29 hydrothermal breccia pipes identified to date, and its exploration target of 50-150Mt @ 0.8-1.5% Cu (contained copper of 400,000-2,250,00t), certainly places it in a comparable league in terms of initial exploration activities and contained resource/metal targets as Sandfire and Rex, two of the most successful ASX listed copper juniors of recent times.
News Flow & Catalysts
The Company continues to de-risk its flagship project as it gains a better understanding of the deeper primary mineralisation potential. We expect future potential discoveries of additional near surface mineralised pipes, initial metallurgical analysis, initial results of deeper drilling results testing the potential for a significant primary source of mineralisation, and the definition of a maiden JORC resource to be positive share price catalysts. In our view the maiden resource will support a ~3Mtpa operation potentially producing ~30,000tpa Cu for 10 years and expect the upcoming PFS to explore multiple development scenarios: a 3Mtpa operation; 5Mtpa operation; and, a blue sky 10Mtpa operation (the later two scenario’s highlighting the potential opex and capex of a larger development project which is possible with further exploration success and funding).
Voyagers’ KM and Khonger projects are situated in one of the most exciting and under explored copper belts in the world. Activities to date at KM and Khongor support medium term exploration targets of 50-100Mt @ 0.8-1.5% Cu and 100-200Mt @ 0.7-1.0% Cu respectively. Subject to exploration results confirming the Company’s targets, Voyager has the potential to be the next significant scale copper exploration/development play and offers unique exposure to Mongolia with a proven management team.
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"Mogi" Munkhdul Badral
Senior Client Manager / Executive Director
CPS International LLC
Telephone/Fax: +976-11-321326
Mobile: +976-99996779
Email: mogi@cpsinternational.mn
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CPS International is a marketing arm of CPS Securities in Mongolia. CPS Securities is a Perth, Western Australia based AFSLicense Holder. To trade ASX and international stocks, feel free to contact me at mogi@cpsinternational.mn or +976-99996779.
Disclosure/Disclaimer
CPS Securities, its directors and employees advise that they may hold securities, may have an interest in and/or earn brokerage and other benefits or advantages, either directly or indirectly from client transactions mentioned in correspondence from CPS International.
CPS International advise this email contains general information only and does not include advice. In preparing this communication, CPS International did not take into account the investment objectives, financial situation and particular needs of any person. As with any speculative mining company there are significant risks.
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