ENCOUNTER RESOURCES LIMITED ENR
Market Cap (28/04/16)~A$19m ($0.125/share)
Issued Capital (31/03/16)155.6 million ordinary shares
12.7 million options
Cash (31/03/16)~A$4.0M
Board of Directors & ManagementMr. Paul Chapman
Non-Executive Chairman
Mr. Will Robinson
Managing Director
Mr. Peter Bewick
Exploration Director
Dr. Jon Hronsky
Non-Executive Director
Mr. Kevin Hart / Mr. Dan Travers
Joint Company Secretary
www.enrl.com.au
Level 7, 600 Murray Street West Perth WA 6005
P: 08 9486 9455
F: 08 6210 1578
1
contact@enrl.com.au
HIGHLIGHTS
YENEENA - Paterson Province, WAThe Yeneena Region ("Yeneena") consists of a major ground position between the Nifty copper mine, the Telfer gold-copper mine and the Kintyre uranium deposit where Encounter has made a series of greenfield base metal discoveries that demonstrate the potential of the area for large tonnage, high quality deposits.
Field operations have recommenced at Yeneena with diamond drilling planned at the BM1-BM7 and Lookout Rocks Copper Projects and the Millennium Zinc Project in the coming months:
BM1-BM7 Copper Project (100% ENR)A cover corrected gravity model has been produced over 6km of the BM1-BM7 copper trend. The model has highlighted three, previously untested density anomalies situated along strike of bedrock geochemical alteration anomalies and copper mineralisation that are consistent with a halo to a potential high grade copper system.
Drill testing of these targets is to commence in early May 2016. This drilling will be 50% funded (up to $150,000) under the WA Government Exploration Incentive Scheme.
Millennium Zinc Project (Hampton earning up to 25%)A passive seismic survey trial was recently completed at Millennium. The objective of this survey is to map cover depth and potentially provide additional structural information at the project to assist with drill planning.
Based on the encouraging outcomes at BM1-BM7, an exercise of removing cover interference from the gravity modelling at Millennium is in progress and will be completed in May 2016.
Drilling at Millennium is scheduled to re-commence in June 2016.
Lookout Rocks Copper Project (Antofagasta earning in)Late in 2015, Encounter identified a sub-cropping gossan adjacent to broad zones of copper anomalism drilled in aircore/RC drilling at Lookout Rocks South. These gossanous outcrops together with strongly leached Broadhurst sediments intercepted in shallow drilling at Lookout Rocks South and Lookout Rocks East indicate the presence of copper sulphides within the Broadhurst Formation sequence.
An initial 1-2 diamond hole program is scheduled to commence in May 2016. Exploration at Lookout Rocks is currently 100% funded by Antofagasta.
CORPORATE~A$4.0 million cash balance as at 31 March 2016.
EXPLORATION
PATERSON PROVINCE YENEENA COPPER / ZINC PROJECT 100% Encounter - E45/2500, E45/2502, E45/2503, E45/2657, E45/2658, E45/2805, E45/2806, E45/3768, E45/4091, E45/4230 and E45/4408
- 90% Encounter / 10% HHM - E45/2501, E45/2561 and the four eastern sub-blocks of E45/2500 with HHM earning up to 25%
Antofagasta earning into E45/3768, E45/4091, E45/4230 and E45/4408
Yeneena covers a 1,950km2 of granted exploration licenses in the Paterson Province of WA located between the Nifty copper mine, the Woodie Woodie manganese mine, the Telfer gold-copper mine and the Kintyre uranium deposit (Figure 1).
Figure 1: Yeneena tenements: Projects and Earn-In areas with major regional faults
Millennium Zinc Project - Encounter 90%/HHM 10% in E45/2501, E45/2561 and the four eastern sub- blocks of E45/2500. HHM may earn up to 25% interest.
Background
The Millennium Project is located in the north-east Yeneena (see Figure 1) and is subject to an Earn In Agreement with Hampton Hill Mining ("HHM") (refer ASX release 23 April 2015).
The Millennium Project lies on the north eastern margin of Yeneena at the intersection of the NNW trending Tabletop Fault and the NE orientated Tangadee structural lineament. This intersection of two metallogenically important structural corridors is a first order target and typical of the style of setting that is associated with large scale metal deposits.
Previous aircore and RC drilling by Encounter has defined a +3km long zinc regolith anomaly that remains open to the SE. Diamond drilling at Millennium has intersected a thick zinc gossan at the contact between a brecciated carbonate and a thick sequence of carbonaceous shales of the Broadhurst Formation. Previous assay results from the gossan include, (refer ASX release 9 July 2015):
38.7m @ 0.9% Zn in EPT2201 from 255.8m; and 91.8m @ 1.6% Zn in EPT2203 from 344.4m
High tenor zinc sulphide mineralisation, in the form of sphalerite, has been intersected below the gossanous unit and returned assays of, (refer ASX releases 12 January 2015 and 13 December 2013):
m @ 36.7% Zn in EPT1854 from 430m; and 7m @ 4.8% Zn in EPT 2198 from 233m.
Three high priority target zones have been identified for follow up in 2016 (see Figure 3):
Target Zone Central - large untested target area south-east of the strongly mineralised gossan intersection EPT2260
Target Zone South-East - interpreted zone of coherent zinc sulphide mineralisation including EPT 2198 (7m @ 4.8% Zn) that is open and strengthening to the south- east
Target Zone North West - high-grade zinc sulphide mineralisation intersected in EPT1854 (0.7m @ 36.7% Zn) that remains open downdip and along strike to the north and west.
Target Zone Central - EPT2260 contained a broad interval of weathered zinc mineralisation that has extended the gossan zone at Millennium. This interval returned an assay of 70m @ 2.3% Zn from 182 metres down hole to end of hole. This is the strongest mineralised gossan intersection to date.
To follow up on this exciting result, a diamond drill hole EPT2278 was completed to test for a steep plunge targeting approximately 150 metres further down dip. This hole did not intersect significant zinc mineralization on the carbonate shale contact which indicates that any in depth extension to the strong zinc mineralization intersected in EPT2260 most likely has a relative flat plunge to the south-east. Supporting this interpretation, EPT2264 located approximately 600 metres south-east of EPT2260 also intersected a strongly mineralised gossan of 18m @ 1.1% Zn from 148 metres down hole to end of hole.
Accordingly, the large untested target area located south-east of the strongly mineralised intersection EPT2260 will be a key focus of exploration at Millennium in 2016.
Target Zone South-East - EPT2261 contained a sulphide intersection of 14m @ 1.8% Zn from 223 metres down hole. EPT2261 is located 100 metres north-west of an earlier hole, EPT 2198, which recorded 7m @ 4.8% Zn from 233 metres down hole (refer ASX release 12 January 2015). EPT2261 established the continuity of an interpreted zone of coherent zinc sulphide mineralisation located in the south-east of the Millennium Project that requires further drill testing.
EPT2262 was drilled to test a steep plunge position below EPT2198 and intersected the carbonate-shale contact but was not well mineralised. The contact area was heavily brecciated and altered and it is interpreted that this hole intersected a position where later faulting has offset the mineralised contact.
A ground gravity survey was completed in October 2015 in this area to extend gravity coverage to the south-east of the known mineralised trend at Millennium and to assist in drill planning. A follow up aircore or RC program is planned to provide initial subsurface information of this structurally compelling, shallow drill target.
Target Zone North West - EPT2257 was pre-collared with the RC rig and completed with diamond drilling during the December 2015 quarter. The hole was designed to test the hypothesis of a shallow south-east plunge of the zinc rich gossan intersected in EPT2201 and EPT2203. However, EPT2257 did not intersect any significant zinc at the carbonate shale contact which was heavily brecciated and altered. Accordingly, it is interpreted that EPT2257 either intersected a position where later faulting has offset the mineralised contact, or that the mineralised unit intersected in EPT2201 and EPT2203 is plunging in a north-westerly direction. The potential remains to define additional mineralisation down dip and up dip of the postulated late fault as well as along strike to the north-west towards EPT1854 (0.7m @ 36.7% Zn).
Next Steps
At the south-east of Millennium, gravity data collected in the December 2015 quarter, is being interpreted in conjunction with other geophysical and geochemical datasets previously collected by Encounter.
A passive seismic trial was completed in April 2016 at Millennium. The objective of this survey was to map cover depth and potentially provide additional structural information to assist with drill planning.
An exercise of removing cover noise from the gravity model at Millennium has commenced. The objective is to produce a cover corrected gravity image similar to the encouraging work recently completed at BM1- BM7.
The comprehensive geochemical, structural and geophysical review of Millennium is progressing. The results of this review will be used to design a program of systematic drill testing of the three high priority target zones identified at Millennium.
Drilling based on the outcomes of the review at Millennium is scheduled to commence in early June 2016.
Encounter Resources Limited issued this content on 29 April 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 03 May 2016 04:43:05 UTC. Original document available at http://www.enrl.com.au/upload/pages/20160503123418/enr-quarterly-report-march-2016-final.pdf?1462250446 |
