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Auroch Minerals Gets Busy At 3Moz Manica Project

Auroch Minerals (ASX: AOU) is close to receiving the first assays from drilling along the Northern Shear of the Manica Gold Project in Mozambique, with results on track for late March.

The company's drilling campaign is two months ahead of schedule with around 4,179 metres, or 20%, of drilling completed on budget.

Auroch's strategy is to define a sizeable oxide resource on top of the existing considerable sulphide resource.

Around 22,000 metres is expected to be drilled in 2013.

Dean Cunningham, managing director, commented: "The first two months has seen extensive drilling, mapping and EM surveying taking place at the Manica Gold Project.

"Export permits and permissions for all aspect of our work have been finalised and put in place. The team has consolidated nicely into a strong unit with a diversity of skills which allows Auroch flexibility and focus.

"Drilling activities are now two months ahead of schedule, high rainfall during December and January resulted in only two lost shifts as a direct result of the quality of the Team and its focus.

"We wait patiently for the first assaying results later in March 2013."

Samples from the December quarter 2012 drilling campaign at the Northern Shear Guy Fawkes project sectors have reached the accredited laboratory.

Northern Shear drilling continues, with a further two holes currently in progress, and samples are being prepared for the next batch of assays.

An additional six holes, for a total of 14 holes, comprising around 1,180 metres are planned as part of the current scouting campaign on the Guy Fawkes project sector.

The second set of samples from the current scout drilling program will be dispatched from Auroch's Manica Gold Project by the first week of March.


Detailed mapping of the Mutambarico and Boa Esperança project sectors at a scale of 1:2000 began in December 2012.

This mapping is being conducted by a consultant and is nearing completion.

A number of new targets, including some unrecorded earlier workings, have been identified and will be followed up by trenching and further scout drilling.


A total of 1,655 line kilometres were flown at 50 metre line spacing intervals, covering the whole of the mining concession.

The data is currently undergoing processing by Geotech-Airborne and first results are expected in March.

These results, coupled with the mapping in the Mutambarico and Boa Esperança project sectors, are expected to yield additional targets for follow-up scout drilling in those project sectors.

The time domain electromagnetic survey is expected to assist in the delineation of new targets in other sectors of the mining concession.

Resource definition

Pan African Resources, the previous owner and 38% shareholder of the Manica Gold Project specifically targeted refractory ounces on the Southern Shear zone.

Given the company's production experience with refractory ores, there was previously no imperative to specifically distinguish between refractory and non-refractory resource reporting.

This has led to the creation of a global JORC Resource that combines refractory with non-refractory sulphides.

Auroch now has the opportunity to delineate further non-refractory ounces from its existing resource base by establishing the basis of definition for the analysis and reporting of resource statements prepared in accordance with the JORC Code guidelines.

Subsequent steps will involve metallurgical test-work to recalculate the split between material that will have high rates of recovery under direct cyanidation and those that do not.


Auroch Minerals is two months ahead of schedule in its effort to add to the already large resource base at Manica.

The company's strategy is to define a sizeable oxide resource on top of the existing considerable sulphide resource.

If drill results highlight the presence of additional oxide resources, early news flow will serve as a catalyst for a valuation re-rating.

Auroch acquired Manica for an attractive $3 per resource ounce versus $44 per resource ounce for the average African gold explorer.

With $5.3 million in cash Auroch is well funded for the 2013 exploration program. It has a strong in country team in place.

The company has a market capitalisation of $9.8 million ($0.23 share price) and, with $5.3 million in cash at the end of December 2012, has an enterprise value of $4.5 million.

This has the stock trading on an extremely low EV/Resource of less than $2 per ounce which is low relative to peers.

Exploration success will likely act as a catalyst for re-rating, with the recent market retracement providing an opportunity.

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