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By Shane Lasley
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Aussie miner joins Red Mountain VMS hunt

Sandfire agrees to invest up to US$21.6 million on exploration of White Rock's zinc-rich VMS project in Alaska over six years

 

Last updated 4/5/2019 at 4:37am

Sandfire Resources joins White Rock at Red Mountain zinc project Alaska

White Rock Minerals Ltd.

This exploration camp at the White Rock Minerals' Red Mountain property will be expanded to accommodate crews carrying out mapping, sampling, ground geophysics and drilling during the 2019 summer field season in Alaska.

White Rock Minerals Ltd. is preparing for a US$4.3 million exploration program at its zinc- and precious metals-rich Red Mountain project in Alaska, thanks to an option agreement with fellow Australian miner, Sandfire Resources NL.

Under the option agreement, Sandfire can earn up to a 70 percent joint venture interest in the Red Mountain property by investing US$21.6 million into Red Mountain and completing a pre-feasibility study for developing a mine at the volcanogenic massive sulfide project over the next six years.

Sandfire, a mid-tier Australian mining company with one copper-gold operation in a growing portfolio of assets in the United States, first became involved in Red Mountain when it invested AU$2.5 million in White Rock shares during 2018.

This initial investment provided Sandfire an exclusive option to enter into an earn-in joint venture agreement in Red Mountain, a strategic partnership the expanding Aussie miner has decided to pursue.

"White Rock welcomes Sandfire as a joint venture partner that shares White Rock's vision for the exploration and development of our exciting Red Mountain project," said White Rock Minerals CEO Matt Gill.

This vision involves establishing a VMS district that encompasses the deposits already identified at Red Mountain and the discovery of new deposits across an expansive property White Rock has put together there over the past couple of years.

2018 success

Following White Rock's inaugural field program at Red Mountain in 2018, its is not hard to imagine the Aussie partners' vision becoming a reality.

This program upgraded and expanded the high-grade zinc-silver-lead-gold-copper mineralization at two historical deposits at Red Mountain – Dry Creek and West Tundra Flats –and made new VMS discoveries across the roughly 183 square miles (475 square kilometers) property about 60 miles (100 kilometers) south of Fairbanks, Alaska.

Utilizing more than 120 holes historically drilled at Dry Creek and West Tundra Flats, commonly referred to as WTF, White Mountain had a resource calculated in 2017 that meets the standards of the Australian Joint Ore Reserves Committee.

This maiden JORC-compliant calculation found that Dry Creek and WTF host 16.7 million metric tons of inferred resource averaging 4.1 percent (1.49 billion pounds) zinc; 1.7 percent (630 million lb) lead; 0.2 percent (57.3 million lb) copper; 99 grams per metric ton (53.5 million ounces) silver; and 0.7 g/t (352,000 oz) gold.

Drilling carried out early during the 2018 drill season confirmed the high-grade tenor and expandability of these deposits.

DC18-79, the best hole drilled at Dry Creek, cut 4.72 meters averaging 19.5 percent zinc, 7.8 percent lead, 466 g/t silver, 6.9 g/t gold and 1.5 percent copper, this equates to 49.7 percent zinc-equivalent when you consider the value of all the metals encountered. This was part of a 16-meter intercept that averaged 6.4 percent zinc, 2.6 percent lead, 152 g/t silver, 2.2 g/t gold and 0.5 percent copper, or 16.1 percent zinc-equivalent.

This hole was drilled outside the resource area, underscoring the potential of enlarging both the grade and size of the Dry Creek deposit.

WT18-28, the first 2018 hole reported from WTF, cut 3.45 meters averaging 15.1 percent zinc, 6.7 percent lead, 518 g/t silver, 2.1 g/t gold and 0.2 percent copper, or 35.2 percent zinc-equivalent.

As compelling as Dry Creek and WTF are, White Rock and Sandfire were more interested in demonstrating the district-scale potential of the Alaska property.

Wider potential

Using the geophysical signatures of the known deposits as a guide, White Rock began investigating Red Mountain's wider potential.

This reconnaissance exploration quickly turned up Hunter, a two-foot massive sulfide outcrop rich in sphalerite (zinc mineralization) and galena (lead mineralization) identified by geologists mapping and sampling about 5,200 meters southeast of Dry Creek.

The first two holes drilled into this discovery tapped VMS mineralization with grades comparable to the Dry Creek and WTF resources.

Further prospecting at Hunter mapped massive sulfide mineralization for about 500 meters along strike and identified evidence that this VMS target could extend for more than 1,000 meters.

The discovery hole, HR18-01, cut 1.4 meters of massive sulfide averaging 17.4 percent zinc, 3.9 percent lead, 90 g/t silver and 1.6 percent copper, or 25.8 percent zinc-equivalent.

HR18-02, drilled from the same pad at a shallower angle, cut 1.8 meters averaging 13.8 percent zinc, 3.1 percent lead, 56 g/t silver and 0.9 percent copper, or 19.5 percent zinc-equivalent.

"There aren't many places in this world where you find outcropping zinc-rich massive sulfide (with lead, copper, silver and gold) and then promptly drill test that and get a positive response," said Gill.

Open for staking

There also are not many places in the world where multiple VMS targets with similar prospectivity remain open for staking.

After consulting with Sandfire, White Rock increased the size of Red Mountain to roughly 475 square kilometers (183 square miles) by staking state of Alaska mining claims to cover prospective geology identified by White Rock and previous explorers of the area.

Most of the new claims are immediately adjacent to Red Mountain and will allow White Rock and Sandfire to systematically explore what they see as a highly prospective area capable of hosting multiple high-grade zinc-rich polymetallic VMS deposits.

In addition to the contiguous Red Mountain claims, White Rock staked small blocks over seven VMS mineral occurrences within 10 miles of the property.

Funding secured

The staged earn-in money from Sandfire will help fund robust exploration across this expansive land package over the coming years.

Sandfire's option and earn-in agreement involves a four-stage investment.

• to earn an initial 51 percent JV interest in Red Mountain, Sandfire has agreed to fund AU$20 million (US$14.3 million) over the first four years, including at least AU$6 million (US$4.3 million) during 2019; and

• this interest can be increased to 70 percent by investing a further AU$10 million (US$7.2 million) and deliver a pre-feasibility study with an ore reserve over an additional two years.

White Rock can maintain its 30 percent interest in Red Mountain by contributing to further activities based on the interest it holds in the project.

Sandfire Resources joins White Rock at Red Mountain zinc project Alaska map

White Rock Minerals Ltd.

"It is significant for White Rock shareholders that the terms of the agreement with Sandfire provide a funding pathway to advance the Red Mountain project through exploration to the point of advanced development studies and allow White Rock to retain a 30 percent interest in any project development at the point when the economics of a project are well defined by a pre-feasibility study," said Gill.

Despite the success of last year's exploration, the White Rock Minerals CEO is looking forward to an even more exciting 2019 program that is now funded.

This work is expected to start off with an airborne magnetic survey, which will provide up-to-date geophysical information for surface crews seeking additional VMS targets with mapping, sampling, ground-based geophysics and drilling.

"We look forward to working with our strategic partner Sandfire and progressing this highly prospective project with the commencement of this program and the subsequent news flow that will result," said Gill.

Sandfire Resources joins White Rock at Red Mountain zinc project Alaska mapSandfire Resources joins White Rock at Red Mountain zinc project AlaskaSandfire Resources joins White Rock at Red Mountain zinc project Alaska map

 

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