Ten Bagger, Friday 6th November Sandfire gets serious at Monty...

Ten Bagger, Friday 6th November

Sandfire gets serious at Monty with four rigs, a 34% copper hit and a resource drill-out



It couldn’t have arrived on a gloomier day for the resource sector, courtesy of a rather noxious weekly cocktail which included renewed jitters over US interest rates and the Chinese economy, Cup day disappointment from the RBA and wobbly metal prices.
But yesterday’s eye-catching exploration update from Sandfire Resources (ASX: SFR) must surely have put paid to any lingering doubts about the high quality nature of its Monty copper-gold discovery, located on its farm-in with Talisman Mining (ASX: TLM).

The impressive suite of new high-grade drilling results from Monty included the eagerly anticipated assays from the previously reported bornite-rich intercept from step-out hole TLDD0026.
Sandfire didn’t disappoint, unveiling a remarkable intercept of 21.6 metres grading 34.4% copper, eclipsing the discovery hole (16.5m at 18.9% Cu and 2.1g/t Au) and surely ranking as one of the most impressive drilling results in the project’s six-year history.
“Take that, ye doubters!” effused Bell Potter analyst David Coates, declaring that the new hits “confirmed Monty as one of the best new discoveries in the sector”.

“The exceptional intersection…has added a new dimension to the interpretation of Monty, opening up the possibility of a new thick, very high-grade zone trending to the SE that is related to the Lower Zone,” he said.
“The work rate at Monty is beginning to ramp-up with additional drilling capacity to undertake in-fill drilling at Monty, step-out drilling at Monty, additional testing for mineralisation along the 5km Monty Trend and the planned drilling of the Homer prospect, 4km east of DeGrussa.”

Sandfire confirmed yesterday that in-fill drilling had commenced at Monty, with a maiden resource estimate due in the March 2016 Quarter.
And Sandfire’s exploration chief, Shannan Bamforth, confirmed that a total of four rigs were now active at Monty, including two diamond rigs and an RC rig, with an additional aircore rig also now working along the Monty trend.

“Clearly this deposit is coming together,” said RBC analyst Paul Hissey, “with continued drill results providing additional confidence, not only surrounding the potential volumes at Monty but also the potential that grades may be higher than that of the existing asset at DeGrussa.”

“The clear signals continue that Monty is being readied for development,” said Bell Potter’s Coates. “The in-fill drilling program is likely to result in a good portion of the maiden Resource being in the higher confidence Indicated category, allowing conversion to Reserves and hence approval for mining.”
Meanwhile, Patersons Securities analyst Simon Tonkin has estimated that the upper and lower zones at Monty could contain around 113,000t of copper combined, representing a 20 per cent increment to the current DeGrussa inventory of 546,000t of contained copper.

“With the drilling extending the lower zone mineralisation by 50m to the north-east, we see the potential for an additional 20-40kt to our estimate,” Tonkin said in a flash note released yesterday.
Based on Tonkin’s numbers, that means Monty could already contain more than 150,000 tonnes of copper – an impressive result considering that the discovery was only made in June.

Of course, there’s plenty of work to do to convert this into hard JORC compliant numbers but, based on the old adage that good deposits just better with more drilling, Ten Bagger will be watching developments at Monty with greater interest over the coming months.