Encounter Resources Ltd (ASX: ENR) and South 32 have commenced drilling at Carrara in the NT which is being explored under a Farm-in Agreement.
The Greater McArthur Superbasin in the NT is a significant global opportunity for the discovery of new, large sediment-hosted copper and zinc deposits under shallow cover,” Managing Director, Will Robinson, said.
“The Century Zinc Mine is located on the eastern margin of the Carrara sub-basin and there is a clear correlation of the Century stratigraphy across the basin in seismic data. Furthermore, the presence of copper and zinc mineralisation at Carrara was established in drill hole NDI Carrara-1 completed in 2020.
“South32 has commenced a three-hole diamond drill program with drilling expected to continue through to November 2023.”
Carrara was secured following the release of the South Nicholson Seismic Survey, a foundational dataset acquired as part of the Geoscience Australia Exploring for the Future Program. A key finding of this survey is the correlation of prospective stratigraphic units from the Isa Superbasin into the Carrara Sub-basin that extend the Mount Isa Province to the west.
Carrara is located at an interpreted structural offset of the western margin of the Carrara Sub-basin where the prospective Isa Superbasin units are modelled closer to surface.
The Century Zinc Mine is located on the eastern margin of the Carrara Sub-basin, and there is a clear correlation of the Century Zinc Mine stratigraphy across the basin in the Geoscience Australia seismic data.
In 2020 a 1,751m deep stratigraphic drill hole (NDI Carrara-1) was completed as part of the National Drilling Initiative funded by the Minex CRC. NDI Carrara-1 was designed to validate the interpretation of the South Nicholson Seismic Survey and was located within the Carrara project.
The results from NDI Carrara-1 support the interpretation that the geology of the Isa Superbasin extends throughout the Carrara Sub-basin. The presence of copper and zinc sulphide mineralisation (Figure 2) demonstrates that sediment-hosted copper and zinc mineralising processes occur within the prospective host unit (refer ASX announcement 28 April 2021).
A 2km spaced gravity survey over Carrara by the Northern Territory Geological Survey was completed in 2022. In addition, reprocessing of seismic lines that extend through Carrara has provided far greater detail of the geology and structure in the upper 1,000m resulting in the definition of multiple targets at key structural locations along the western margin of the sub-basin.
Three diamond drill holes (~3,000m) are planned at Carrara during October-November 2023.
Farm-in and Joint Venture Agreements – Key Terms
The key terms for the Farm-in and Joint Venture Agreements include:
- South32 has the right to earn a 60% interest in Carrara (the “Initial Interest”) by sole funding A$10 million of exploration expenditure within 10 years.
- During the farm-in phase or joint venture period, South32 may earn an additional 15% interest in Carrara (the “Further Interest”) by completing a Scoping Study.
- Upon South32 earning the Initial Interest or Further Interest, a 60:40 or 75:25 joint venture will be formed and in the case of South32 earning the Further Interest, the parties must contribute funds based on their pro-rata interest or dilute according to a standard dilution formula. Should a party’s interest dilute to below 10%, that party’s interest shall automatically convert to a net smelter return royalty.
- During the farm-in phase, South32 is the Manager of the project.
During the farm-in phase, a technical committee comprising representatives from each of Encounter and South32 review and approve annual exploration programs and budgets. All decisions of the technical committee are decided by majority vote, with South32 having the casting vote.
Scoping Study means an order of magnitude technical and economic study of the potential viability of JORC Mineral Resources for the project.
