EMMERSON RESOURCES LIMITED
ERM - Resources Rising Stars - Mr Rob Bills, MD
Fri, 3 Oct 2008 03:00PM
Rob Bills
Fri, 3 Oct 2008
03:00PM Australia/NSW
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EMMERSON RESOURCES LIMITED (ERM)
ASX code: ERM
Website: http://www.emmersonresources.com.au
Industry: Materials
Principal Activities:
Gold Exploration
Address:
, , 3 Kimberley Street,
WEST LEEDERVILLE
WA
Phone: 08 9381 7838
Fax: 08 9381 5375
Executives & Directors
Mr Andrew McIiwain , Non Exec. Chairman
Mr Rob Bills , Managing Director
Mr Simon Andrew , Non Exec. Director
Mr Tim Kestell , Non Exec. Director
Mr Peter Reeve , Non Exec. Director
Mr Shane Volk , Company Secretary
Company Podcasts
Company ASX Announcements
Company ASX announcements can be viewed on the ASX website.
Announcements from the preceding six months are shown below.
Please refer to the relevant stock exchange if any of the above information is incorrect
EMMERSON RESOURCES LIMITED (ERM) Events
Australia/NSW
EMMERSON RESOURCES LIMITED (ERM)
| $7m Exploration Program Commenced at Tennant Creek | Mon, 29 Jun 2009 |
| Change of Director`s Interest Notice x 2 | Mon, 15 Jun 2009 |
| Appendix 3B | Thu, 11 Jun 2009 |
| Ivanhoe Australia receives approval from FIRB | Tue, 9 Jun 2009 |
| Boardroom Radio Broadcast | Fri, 5 Jun 2009 |
| Drilling Confirms Strike Extension - Analytic One | Thu, 4 Jun 2009 |
| Results of General Shareholder Meeting | Thu, 28 May 2009 |
| General Shareholder Meeting Presentation | Thu, 28 May 2009 |
| Boardroom Radio Broadcast | Tue, 19 May 2009 |
| Emmerson Commences Geophysical Survey at Trinity | Mon, 18 May 2009 |
Please note: This company appears on this website as a result of its listing on the Australian Securities Exchange. Boardroom Radio does not claim any association with any company listed on this site.
PRESENTATION BY MR. ROB BILLS, MANAGING DIRECTOR OF EMMERSON RESOURCES LIMITED (ERM)
“Resources Rising Stars”
http://www.brr.com.au/event/52042
FRIDAY, OCTOBER 3, 2008, 03:00 PM.
ERM I won’t dwell on this disclaimer and disclosure. This presentation will go up on our website so you can look at there.
10
What I do want to talk you about today is Emmerson, a very new company, listed December last year. As I’m finding out, timing is everything. We raised $20 million in December and a very successful IPO. We’re over subscribed. We have the bulk of the Tennant Creek Mineral Province. It’s a
15 paleoroterozoic Mineral Province, very high grade province, average grade from the historical mine of 15 g to 20 g per tonne. Just to put you on scale there, the Golden Mile which you may have heard of in Kalgoorlie, average head grade there was about 2 g per tonne. So, you can see that if we do find something that’s in the 15 g to 20 g per tonne range which our drilling to date
20 suggests that it’s going to be in excess of that, it will set us up very nicely.
The other thing about the Tennant Creek Mineral Province is that a significant copper occurred with a lot these ore deposits, quite high grade copper. But it’s not just a gold story, it’s an iron oxide copper-gold story and also we have
25 uranium. It’s similar to the deposits that you may have heard of in South Australia, Prominent Hill particularly, where you tend to get some gold, copper, and uranium occurring together in an iron oxide assemblage. Now, that iron oxide assemblage can be both magnetite and hematite.
30 But our portfolio also consists of gold plant. It’s a 300,000 tonne per annum gold plant -- CIP gold plant, currently on care and maintenance, so it’s not a big leap for us to get into production. We have a team that understands these deposits quite well. My background, as Jackie said in Western Mining, I spent quite a lot of time on the Stuart Shelf around Olympic Dam on many
35 deposits there, also up in Cloncurry, and I understand (inaudible) quite well. We also had a very established team in the Tennant Creek.
As part of the acquisition of these assets, we also got a mineral database which has lots of geophysical survey, drillholes, a very extensive historical
40 database. So, In terms of what that means for the shareholders, it means that we ca get up and running very quickly, very early. We don’t have to repeat that information.
A bit of a snapshot of the company, the Board of Directors up there, you’re
45 probably sick to death of hearing about experienced Board of Directors. Andrew Mcllwain is the Non-Executive Chairman. He’s ex-WMC. He was the Manager of the Central Norseman Gold Corporation and when he was with WMC. Myself. Tim Kestell, who’s a Non-Executive Director, (inaudible) broking background. Simon Andrew, also Non-Executive Director. He’s at Merchant Bank that based in Singapore.
Major shareholders -- Stark out of Milwaukee, they came in for some seed
5 capital early on, they hold 36%. Old Blood & Guts, a (inaudible). You can see there’s a little bit of a story to that. Like many companies, our IPO share price was 20 cents and we’ve obviously dropped off quite significantly since then. When we pitched the IPO, we pitched that time institutional shareholders, anticipating that that would be the sticky money, unfortunately it
10 wasn’t sticky enough. We had a number of funds dumped their shares there through redemptions. Fortunately for us, Old Blood & Guts came in and picked up all the over hangings in the stock, so that came in and soaked up the over hang, so that’s come up to about 10% or so. Now, they’re associated with the directors and they bought those shares on market but
15 they’re obviously a very big believer in the Emmerson’s story.
ASX Code: ERM -- $203 million shares out there. The market cap of A$24.5, now, when you think about that, we’ve got a mill, we’ve got the biggest tenement portfolio in Tennant Creek, and we’ve got the database and we’ve
20 got the team. We’ve got, very importantly, we’ve got A$14 million in the bank. So we won’t be going back to shareholders. We’ve got enough to sustain our exploration program for the next year or so.
This is our land position. For those of you who’ve been to Tennant Creek, it’s
25 490 km north of Alice. It’s got the new railway line that goes through from Adelaide up to Darwin, also the new gas pipeline. I guess the message is it’s not out in the boonies. It’s got very good infrastructure so the cost (inaudible) per production, it’ll be reasonably low. Our mill is located out here, on a sealed road and that’s the Tennant Creek downside.
30
You can see some of the historic mines in red, Orlando out there, gold and copper, nice gold grades and copper. North Star, essentially, a gold mine. Gecko, again gold and copper. So we get the full spectrum of deposits from very high grade gold right through to gold, copper and then also some with
35 uranium credits.
Now, we hear some comments, I guess, that Tennant Creek Province is well explored. This slide, I think clearly tells you that that’s not the case, at least not in the third dimension, in a depth dimension. You can see here in blue
40 our tenements, the drillholes are put here are out of the database, so we have the database that goes back 70 years. So what I uploaded here was only those drillholes that are greater than a 150 m deep. So I’ve taken all the shallow ones away and that’s the only ones that are pierced below 150 m. Now, as I said, that’s a very underexplored in that depth dimension. We have
45 geophysical techniques that see down to 400 m, so you know, there’s a lot of potential at depth.
The other thing about the Tennant Creek Province is it’s -- the gold and the copper are in these iron oxide deposits. So the gold is actually in hematite and magnetite. So when you mine the gold, you also produce some iron ore and as I said, copper, and it was very late discovered. This field was discovered in the 1940’s to the 1950’s. The gold is very tightly held in these iron oxide deposits. So the old timers in prospect is actually didn’t find this
5 field for a long time because the gold doesn’t disperse so they couldn’t pan it, and that actually works well for us, in terms of, we believe also that the surface expression of these things hasn’t been fully exploited.
So what’s our strategy? We have a 3-horizon strategy. We have the
10 Brownfields Strategy. Now, Brownfields for those that don’t know is exploring around existing mineralisation, okay. So our drilling results to date have all come from the Brownfields where we’ve reassessed existing mineralisation. We’ve gone back. We’ve applied new technology, new processing technology, new geophysical techniques, and new concepts to this and drill.
15 We’ve been drilling since April. We have a reverse circulation drill rig up there, drilling. From our booth you can pick up the ASX announcements we’ve made since our drilling started, we’ve had some very good results. I’ll cover a few of those as we go forward.
20 But I think one of the more exciting things is our Greenfields. We’ve invested very, very heavily in our Greenfields exploration that is areas that, for whatever reason, have remained undiscovered by previous explorers. Now the thing about these deposits in Tennant Creek, as like Olympic Dam and Prominent Hill, they are hematite and magnetite associated. So the iron
25 oxide assemblage is, can be both hematite and magnetite, and I’ll talk a little bit more about that because they’re very important concept. The early explorers only looked for the hematite (inaudible) the magnetite end member, the magnetic end member. So, our Greenfields exploration is really discovering, what we call, this new generation of iron oxide copper-gold
30 deposit in Tennant Creek, something that the previous explorers would not have found, and this will be starting. We’ve invested a lot in geophysical techniques. We’ll be starting to drill this within the next three months or so and also through next year.
35 Our Near Mine Strategy, third-time horizon, this is a strategy that’s will take a while to get going. What the concept here is, these are copper deposits around closed mines. Now, those mines were closed when the copper price was very low. There are lots of upside potential along most, in terms of extensions to existing mineralisation. The concept here always to get a third-
40 party to invest in these and we’ve had some interest from Chinese to get into these deposits.
So, let’s have a little peak on our Brownfields. This is the pipeline for our Brownfields Projects. What you’ve got down this end of the pipeline is our
45 early stage projects, target generation, up this end of the pipeline is the feasibility studies. Now, these are the ones here that will go into the resource stage and be mined. So you can see what prioritised into our Near Mine ones, closest to this end of the pipeline, that’s going to be the Near Mine joint venture. These ones are our Brownfields Projects, as the brown box has indicated. We’ve drilled Golden Kangaroo, Golden Forty. We’ve drilled West Gibbet Oxide, Golden Forty South, but you can see that it’s a very deep pipeline of projects. It’s unlike a lot of other junior mining companies. It’s not a one shot wonder, Emmerson has a very deep pipeline of projects which
5 we’ll be working through this pipeline, drilling those projects. If they’re successful, they move forward. If they aren’t successful, they fold off. So you’ll see, if you’re any shareholder in Emmerson that there’ll be lots of announcements on different projects and what we’re anticipating is that the high quality ones will continue working all the way through into concept and
10 feasibility.
Then we have the Greenfields Projects feeding into this end of the pipeline. As I’ve said, we’ve done a lot of geophysical work here to build up this part of the pipeline. They are finding their way into the early stages of the pipeline.
15 We have a number of targets already that’ll work their way along this pipeline as well.
Just a schematic of the Brownfields, we’ve basically worked only this very small part of our tenement package at this point in time and I’ll talk to some of
20 these projects in here. That’s just an example of one of our Near Mine projects which hasn’t been mined. It’s in the database, previously drilled by Giants Reef Mining, 24 m at 43 with 20 m at 3% copper so as you can ascertain it’s quite a high grade drill result.
25 Our first drillhole, we drilled this in April, 13 m at 67 g, a pretty good maiden drillhole. It’s in an oxidised hematite ironstone which is essentially, yes, hematite-dominant. It’s above the oxidized zone. The gold is very coarse. That’s what it looks like in section, so here’s the surface here, here’s the drillhole here. This is the host ironstone body, the hematite ironstone body
30 and that’s the Intercept there. You can see here just a bit of the schematic of more of like out in the field clicking the samples.
The gold -- you can see that the gold here is --- there are some we panned because it was such high grade. I sent a geologist there. When we got the
35 results back from the laboratory, I didn’t believe the natural results were so high. I sent the geologist back out in the field to pan the drillhole and that’s what they panned. So you can see some very high grade chunks of gold there with the small ones there.
40 A couple of other projects that we’ve drilled -- we’ve drilled Golden Forty, here. We’ve drilled Golden Kangaroo. Now, this area here is a major structure that runs through here which we now understand as a consequence of undertaking some more geophysical studies. So we’re quite keen on this area. We’ve also drilled this Peko East Project, here. We have some good
45 results, in fact, every project we’ve drilled to date, we’ve had quite positive results.
This is just the Golden Forty, cross-section, it was an old mine. I think its head grade was about 14 g per tonne. I guess the key point here is that it wasn’t closed because it (inaudible), it was closed because the -- they had some ground issues and incursion of water. We’ve come back and drilled some nice Intercepts underneath the mine and also along strike so out of the page towards you. Also, we’ve drilled another area called Golden Forty
5 South and as you can see some quite high grade copper.
This is a sort of a schematic to try and illustrate some of the complexities in the field. This is why you need to spend quite a lot of time here to understand the geology quite well and use the appropriate geophysical techniques to be
10 successful. This is the Golden Forty mine, so that’s the old mine, the old head frame that went down to about 150 m, I believe. This is the ironstone, so this is the hematite-magnetite body that hosts the gold and you can see its quite complexly folded, so we’ve drilled underneath the old mine there and got those drill results that you saw on the previous slide. We’ve drilled a long
15 strike and we can progressively working a long mine ironstone and to date, we haven’t come to the end of it in terms of the mineralisation. So, we’ve had very positive results to date. We will be announcing some more results later on this week from the next drilling campaign here, but today we haven’t closed that off.
20
Golden 40 South Ironstone is the one I also highlighted which had the high copper. So, this part of the ironstone tends to be copper-rich and that’s fairly typical of these mines in Tennant Creek. You generally have the copper higher up in the system and the gold tends to be at depth. So, we haven’t
25 drilled this at depth, we’re not sure what’s down there.
Golden Kangaroo East -- You might recall from two slides ago was slightly east of the Golden Forty mine area. Again, we came in here. This wasn’t a virgin discovery, this was a Brownfields discovery drilled by Giants Reef
30 Mining. We used some new geophysical techniques, remodelled it, and came in and drilled these holes, and as you can see we’ve got some quite good grades. Obviously, very shallow and amenable to open pit mining so obviously low cost of production.
35 What I want to talk to you about now is, well I think, this is probably one of the more exciting horizons in our strategy and that’s the Greenfields. This is where we are going to discover or we hope to discover these new iron oxide copper-gold deposits. Apologies in advance, this is a fairly busy technical slide. All I’m trying to do is -- I’ll explain it by starting down here. This is the
40 Olympic Dam deposit that I worked on in WMC days on the Stuart Shelf. This is the biggest concentration of copper, uranium, and gold in the world. So, if you put Olympic Dam in Tennant Creek, the gray stuff there is hematite, so it’ll be non-magnetic. So, previous explorers in Tennant Creek would not have found all the gray stuff because they used that wrong technique or they
45 didn’t use the appropriate technique. So, what we’ve done is we’ve used a gravity geophysics which does, in common, it does locate the gray stuff, the hematite, and as you see at Olympic Dam, the bulk for the mineralisation is actually in the hematite. Okay, so it’s in the non-magnetic part of the iron oxide assemblage. The yellow part, at Olympic Dam is actually the magnetic part, so previous exploration would’ve picked up the magnetic part but wouldn’t have picked up this part, so that’s the whole concept around our Greenfields exploration to do systematic gravity defined similar or what we have a similar sort of mineralisation to this. Now, how we do that? We’re
5 using a -- applying here to do aeromagnetic surveys plus gravity geophysics on the ground. We’ve had Fugro Geophysical up there collecting gravity measurements and traverses, but they’re working it for the last six months. This is $1.5-million investment in new geophysics and then we process them and we drill them.
10
One of the targets that’s came out is actually very, very interesting. This is, we haven’t actually got a name for it at the moment but it’s -- this is a major mineralised (inaudible) in Tennant Creek, this is all undercover, but this hasn’t been explored before. It has an old historic mine here, again very high
15 grade gold mine. This is the gravity geophysics, here, and a little red squiggly is the magnetic geophysics so it overlayed two surveys here on one slide, and you can see that it’s actually at 7 km by 4 km. It’s very dense. It’s the white stuff that’s the hematite, we suspect, we haven’t drilled it. That’s going to be drilled and so it’s going to be hematite and obviously it’s magnetic so
20 there’s going to be some magnetite. The next task, of course, is to find out where the gold is in that.
In terms of our exploration budget, we’ve got a significant portion going into acquiring new geophysical data. So, we’ll spend about $1.5 million to date on
25 new geophysics, a lot of money into drillings. So we’ve got a very aggressive program. Total drilling geophysics is over $6 million from January to June, and add up, you know $4.7 or so. So, that drilling, as I’ve said, will be drilling by Brownfields and Greenfields on a continuous basis. So our total explorations spend is a very aggressive number over the next, sort of, 12
30 months.
Our second last slide, in terms of shareholder value, you’ve probably are quite aware of that. You generally get valued here at the Greenfields targets. You get valued after you drilling out a resource and you get valued up here in
35 terms of feasibility. So, Emmerson’s value proposition is that we will get valued at all points in this. So, we’ll have projects coming in here, we have projects here, and we’ll have projects here.
So what’s the summary in a forward program? Again, aggressive evaluation
40 on that Brownfields pipeline, we’ll just continue to drill that Brownfields pipeline, hoping to build this quality resource bank ahead before starting up our mill and evaluation of those Greenfields targets, that new data set which is very exciting, and hopefully, we will discover that company making mine. Then we’ve got the Near Mine Strategy, where we hope to get Chinese or
45 Korean or Japanese investment into that Near Mine joint venture. We’ve just about finalized the acquisition of all of that new geophysical data. If Fugro Geophysical are about to finish that, so then we’re going to leverage that into more discoveries, and of course, fostering and maintaining strong alliances and links with existing shareholders. We have aboriginal agreements across all of our tenements so we can get into production fairly quickly. We don’t have to negotiate again with the aboriginals and obviously strong links with the local community.
5 That’s all I want to say. You can visit our booth outside or dab on to our website.
Thank you very much for listening.
INTERVIEW CONCLUDED
Contact brr@brr.com.au for more information
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