Strategic Minerals Corporation (ASX: SMC) has racked up strong share price gains as drilling at the Woolgar project, in central north Queensland, returns high grade gold intersections.
While not as well-known as some of its small cap explorer peers, some investors have twigged to Strategic Minerals as drilling in 2012 unfolds.
The project is located 120 kilometres north of Richmond in north Queensland and covers an extensive 700 square kilometres, with all mining titles and exploration permits are 100% owned and managed by the company.
For starters, in the current campaign, one hole intersected 17 metres at 3.33g/t gold from 10 metres, including 4 metres at 11.9g/t gold.
While another intersected 25 metres at 6.69g/t gold from 22 metres, including 3 metres at 36.6g/t gold.
The 2012 drilling program at Woolgar stepped up a gear in the quarter, with a total of 71 RC percussion drill holes for 4,054 metres of drilling carried out.
The significant ounce gold grade intersections at the Big Vein South and Big Vein 2 prospects have added to the previous evidence that the old Woolgar goldfield may contain significant gold mineralised 'shoot type' zones.
The drill program in 2012 has targeted areas within the historic Woolgar mine workings in the mesothermal gold mineralisation, along and adjacent to the Woolgar fault zone.
Drilling for the entire year will cover an extensive 10,000 metres.
The company is aiming to delineate sufficient near surface resource potential within the mesothermal zones, that together with existing resources, can allow the company to proceed to conducting a Scoping Study for mine development.
The current total Woolga project global resource is 10.8 million tonnes at 1.42g/t for 474,900 ounces of gold using a high cut-off (0.8 - 1.0g/t. The majority of resources estimated at a 0.8 g/t gold cut-off grade; Explorer estimated at a 1.0 g/t cut-off grade).
Drilling consists of infill and extension drilling in the prospect areas drilled in 2010/2011, as well as the targeting of new areas for exploration drilling.
Other best results included:
- 27 metres at 4.85g/t gold from 48, including 8 metres at 11.3g/t gold;
- 10 metres at 14.3g/t gold from 14 metres, including 3 metres at 42.5g/t gold; and
- 5 metres at 6.18g/t gold from 35 metres, including 1 metres at 28.7g/t gold.
The drilling was carried out within the Lower Camp area associated with the Woolgar fault zone.
Highlighting the potential of the company's project, it is located in an area of high gold endowment and surrounded by multi-million ounce mines.
The regional gold deposits are significant including Kidston (4.1 million ounces), Charters Towers (7.1 million ounces), Mt Leyshon (3.2 million ounces) and Pajingo-Vera Nancy (3.2 million ounces).
IDENTIFYING EPITHERMAL GOLD VEINS
High grade epithermal gold veins were first recognised by Strategic at Woolgar in 2002, in the Sandy Creek area, expanding the potential of the field to host a major gold deposit.
The epithermal veins at Woolgar are believed to have many geological similarities to those at Pajingo, one of Australia's largest and most profitable gold mines.
WOOLGAR PROSPECT REVIEW
Big Vein South (Southern) Prospect
The 2012 drilling at the Big Vein South prospect (southern zone) has shown that this gold mineralisation extends significantly further to the south of the previous drilling in 2010/2011.
Additional drilling will be carried out shortly to infill some of these areas, and will extend the drilling even further southwards in an attempt to locate even more gold mineralised strike length. The additional drilling at the Big Vein South prospect will mean that new prospect areas planned to be drilled in 2012, will now be delayed until 2013.
Big Vein South (Central) Prospect
The 2012 drilling at the Big Vein South prospect (central zone) has shown there is also potential for significant gold mineralisation discoveries in the hangingwall portion of the large zone of alteration extending through the Big Vein South prospect.
Big Vein #2 Prospect
The 2012 drilling at the Big Vein #2 prospect has surpassed the aim of linking the gold mineralisation occurrences at several of the previous drill hole locations (2009/2011). The drilling has also shown the potential for ounce plus gold grade intersections in this prospect.
QUEENSLAND URANIUM EXPOSURE
Strategic Minerals is positioned to potential benefit after the Queensland Premier, Campbell Newman, supported the recommencement of the mining of uranium in the state.
The importance of this decision for the company is that it has opened the way to examine alternative mechanisms for exploring the prospective uranium targets at Woolgar.
Targets have already been identified - with established drill targets including partially drilled outcropping uranium occurrences at the Perseverance-Shamrock prospect.
Drilling in the 1970's defined zones of mineralisation with high grade drill intersections up to; 6 metres at 0.25% eU3O8; and, at the Middle Park prospect where mineralised rock chips samples returned values up to 0.67% U3O8.
The primary uranium targets in the district are numerous untested airborne radiometric (uranium channel) anomalies associated with a regionally extensive unexplored unconformity.
Strategic Minerals had over $1.6 million in cash at the end of September 2012.
Strategic Minerals is trading near 12 month highs after a recent re-rating in the stock following high grade gold intersections from drilling results and also the company's uranium exposure in Queensland.
Managing director, Wally Martin likes to play a conservative "bat" as he continues to call the shots drilling at Woolgar, eschewing all the trappings to put money into the ground.
Still lightly valued at around $27 million, at a share price of $0.05 with its current resource, potential is good to lift resource ounces near surface.
Proactive Investors considers that the re-rating in the stock may have only begun, with the company's extensive gold drilling campaign (10,000 metres in 2012) at the Woolgar having the potential to increase the resource base which is currently 10.8 million tonnes at 1.42g/t for 474,900 ounces of gold using a high cut-off (0.8 - 1.0g/t).
Strategic Minerals aims to define sufficient near surface resource potential within the mesothermal zones. Together with existing resources, this would allow the company to proceed to conducting a scoping study for mine development, another milestone and potential catalyst for uplift in valuation of the company.
Drilling consists of infill and extension drilling in the prospect areas, and highlighting the potential of the region, it hosts many multi-million ounce mines.
Adding further interest, the epithermal veins at Woolgar are believed to have many geological similarities to those at Pajingo, one of Australia's largest and most profitable gold mines.