Rox Resources' (ASX: RXL) recent drilling results from its Camelwood Prospect, within the Mt Fisher Project in Western Australia, have prompted Patersons Securities to maintain its Speculative Buy rating.
The Australian broker is looking to additional indicative diamond hole drill results and assays from the first diamond hole, which should be received by no later than mid-March.
The following is a copy of the report.
- The 2nd diamond hole drilled 100m south of the 1st diamond hole (that intersected 3.1m of semi-massive to massive nickel sulphides followed by 2.9m of strongly disseminated sulphides) intersected 0.4m of semi-massive sulphides followed by 5m of strongly disseminated sulphides.
There was no mention of the downhole depth of the intersection.
- An RC hole drilled 100m north of the previously northern-most RC hole (that intersected 3m of strongly disseminated and semi-massive sulphides from 118m) intersected 3m of semi-massive sulphides followed by 6m of strongly disseminated sulphides from 199m depth.
- RC drilling at the Corktree Prospect (4km south of Camelwood) and the Silverbark Prospect (53km north of Camelwood) did not intersect any nickel sulphides instead hitting pyritic sediments and BIF.
- Disappointing to not hit massive sulphides in 2nd diamond hole but not surprising: Whilst the failure of the 2nd diamond hole to hit massive sulphides is disappointing, it is not unexpected.
Kambalda type massive nickel sulphide deposits regularly have grade variability due to the way these deposits were formed (eg; lava channel flows, variable dropping out of heavy metals).
- The 2nd diamond hole was drilled underneath an RC hole that intersected 20m @ 1.06% Ni from 159m, which suggests that this particular location is just one of these parts of a massive sulphide deposit that has not seen a lot of heavy metal deposition.
- We await the indicative results from the 3rd diamond hole, drilled another 100m south underneath an RC hole intercept of 3m @ 1.72% Ni (including 2m @ 2.22% Ni) from 152m.
If this hole reports a multi-metre intersection of at least semi-massive sulphides then we would be confident that the deposit is displaying the characteristics of a potentially commercial nickel sulphide deposit.
- The RC drilling results continue to extend the strike length of Camelwood, which is now 600m. In our opinion this strike length is more than ample to host a potentially commercial deposit, if the tenor of grade is at least 3% Ni.
We retain our speculative buy rating and look to additional indicative diamond hole drill results and the assay results from the 1st diamond hole, which should be received by no later than mid March.
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