WITH strong in-country expertise and well-defined exploration targets in the right address, Quintessential Resources could be the essential float for investors this year.
Quintessential Resources managing director Paige McNeil.
Quintessential's Bismarck copper and gold targets.
Published in the April 2011 PNG Report magazine
Like the well known battleship that shares its name, the Bismarck copper-gold property is shaping up as an impressive asset with formidable targets in its sights.
Quintessential Resources managing director Paige McNeil said the company was exploring in arguably the most prospective and underexplored geological address in Papua New Guinea.
Located in the PNG Highlands? Enga Province, the Bismarck project is 100 kilometres northeast of Barrick Gold?s massive 25 million ounce Porgera mine. The property was granted in February 2010 and Quintessential has been working on it since then.
?We?re in the same regional geological setting and the local geology is very similar,? McNeil told PNG Report.
?Quintessential is exploring for a deposit like Porgera mine, but definitely with a Zone Seven,? she said. ?Zone Seven is where they found the very high-grade gold, which gave the mine the massive initial cashflow and potential. Zone Seven was a bonanza for them that allowed development.?
McNeil helped list and is the company secretary and administration manager for Frontier, which has had great success in PNG showing the possibility of giant deposits. She intends to replicate that success with her Quintessential initial public offering.
McNeil first became involved with her flagship Bismarck tenement in 2002, at the bottom of the gold price cycle, through her private PNG-registered exploration company Kanon Resources.
Bismarck was the first of five exploration licences Kanon was granted and later sold to a Canadian joint venture, which eventually lost the EL due to a significantly late exploration/expenditure program.
?That was disappointing because I had a carried interest, but because I have a very strong belief in this project I was straight in there to pick it up again under the Quintessential Resources banner, with a bigger area,? McNeil said. ?One very positive aspect is that I have an effectively complete, original document database, including from the main initial reconnaissance and prospect definition work.
The exploration licence covers 304 square kilometres, has 57km of highly prospective strike length and 19 prospects have been identified within two gold districts and two porphyry gold-copper-molybdenum districts.
Recent work has concentrated on the Tekem gold district, at the Tekem, Semben and Awale prospects and also in the Mal porphyry copper-gold-molybdenum district.
?Tekem has a modest Inferred gold Resource of about 40,000 ounces grading about two grams per tonne, but its upside potential is truly excellent and it is known from drill holes to include a high grade gold zone,? McNeil said.
?Our strategy is to undertake resource delineation drilling and advance the deposit to pre-feasibility within two years of listing; the goal to drill out 200,000 ounces to a depth of 100 metres. We have completed a substantial conceptual mining study, that shows if such a deposit is defined, it could be viable in such a location.
?The project economics improve markedly with increases in the gold price and resource base, particularly if possible additional surrounding satellite gold deposits can be developed around a centralised plant, as at Newcrest/Harmony?s Morobe project in PNG.
?Quintessential completed a hand trenching program last July and we?ve just finished a three-dimensional induced polarisation program and are awaiting the results. I anticipate the IP will provide us with a lot of new subsurface information and drill targets to assist in our goal of defining 500,000 ounces of resources within three years.?
At the Semben prospect, a previous explorer completed five shallow scout holes on high grade gold targets with a best result of 0.8m grading 28.6gpt.
?We will be evaluating Semben with systematic, grid based soils, mapping, trenching and ultimately drilling, to test the high-grade gold,? McNeil said.
?Quintessential will also be looking at the Mal and Giwi Prospects initially. Both are large porphyry copper-gold-molybdenum occurrences that will be drilled as soon as practical. These porphyry targets also have excellent deposit potential.?
McNeil explained that a lot of early-stage PNG exploration during the 1960s and ?70s focused on very shallow depth targeting.
Since then, miners have found enormous, very high value deposits at greater depths such as Newcrest/Harmony?s high grade and massive Golpu Deposit. That is targeting a resource of 8Mt of copper and 30Mozof gold. The Wafi-Golpu area had been explored for 33 years before deep drill testing was so successful.
?Quintessential will buy a larger drill rig that will allow us to drill deeper because I think the really interesting and bigger parts of our systems could be at depth,? McNeil said.
Exploration funds will be raised in a near-term IPO.
The prospectus is in progress and will be lodged in the near future with a view to listing on the Australian Securities Exchange and Port Moresby Stock Exchanges shortly thereafter. It will aim to raise $6 million, at 20 cents a share.
?We will purchase the rig and the other related capital items and conduct a major drilling program at Tekem whist undertaking soil sampling and trenching at the other prospects to advance them to drill status,? McNeil said. ?We?ve also had a lot of interest from the majors, who are currently evaluating the data.
?We are eager to explore at Bismarck so we are not looking for an operational joint venture, however, a strategic alliance with a major cornerstone investor at float might be desirable.?
Backing up McNeil?s belief that the company can progress Bismarck in its own right is a strong technical team.
?I believe that success comes from having quality people and one of our strengths comes from the fact that I have already secured my team,? she said. ?We have great people and strong science.
Quintessential?s exploration director is Dr Salam Malagun, who is a highly experienced geologist in PNG. His PhD research led to the discovery of the Simberi Gold Deposit.?
McNeil earned a WA Business News 40under40 award recently for various achievements including being associated with PNG for the past 12 years, with a focus on administration and logistics in the resources industry.
?I possess corporate experience in both the ASX and TSX and I live and breathe mineral exploration in Papua New Guinea,? she said.
Quintessential?s chairman Jay Stephenson also sits on the boards of Doray Minerals (which was last year?s most successful IPO), Drake Resources, Strategic Minerals and Aura Energy.
?Jay has a very successful track record in business development, particularly taking companies from the conceptual stage through stock exchange listing and increasing market capitalisation,? McNeil said.
An initial focus and strength for McNeil and her team is getting results quickly back to shareholders and the market. ?Some IPOs can take over 6 months to prepare for their first program, but Quintessential can hit the ground running, advancing several projects concurrently to ensure a constant news flow back to investors? she said.
?We have the experience to explore in a timely and cost effective manner. We?ve already been on the ground there for years, our equipment is onsite and we have established a logistical base in Madang.
We?ve completed all the groundwork, so the plan after listing is to spend $5 million on exploration over the first two years. This will include the resource delineation drilling at Tekem and further work on increasing gold resources at adjacent targets.
McNeil believes the company could have a 500,000oz resource demonstrated at Bismarck in three years from Tekem alone if it extends to depth, but more certainly with drilling success at the nearby or satellite prospects.
Quintessential has also applied for two exploration licences in Milne Bay with high prospectivity for epithermal gold. There are four different competitor gold deposits totalling more than 1Moz in resources located within 2km of the application boundaries. Targets will be ranked for rapid follow-up after the ELs are granted.
?We are highly experienced in PNG and have conducted multiple exploration programs at the Bismarck EL, establishing positive relationships over the years.? McNeil said.
?Quintessential?s team feel we have all the bases covered in PNG and can focus on obtaining results and creating significant value for our shareholders.?
QRL Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
