Exco Resources (ASX: EXS) is set to expand exploration at the company's Northwest Queensland package following results from drilling at the Salebury prospect.
Exco's principal target in the eastern succession of the Mt Isa Inlier is iron oxide-copper-gold (IOCG) mineralisation.
This mineralisation bears similarities to Xstrata's Ernest Henry underground mine, also in North Queensland, and is typified by the coincidence of strongly anomalous magnetic and gravity highs.
In 2011, the company identified three new priority one IOCG targets at Salebury South, Elder Creek and Canteen.
Diamond drilling carried out in January at Salebury intersected copper gold mineralisation, with an intercept of 16 metres at 1.86% copper and 1.22 grams per tonne (g/t) gold from 133 metres, including 3 metres at 4.89% copper and 1.32g/t gold.
A follow up program comprising 2000 metres of reverse circulation and diamond drilling will commence soon, aimed at quantifying the Salebury prospect's tonnage potential.
It will also identify the best positions for deeper drilling to determine the overall size of the IOCG target area.
The Salebury prospect occurs on the southern limb of the Pumpkin Gully Syncline, which is characterised by numerous prospects with surface copper mineralisation.
In 2012, Exco is cashed up and focussed on the identification and growth of resources in Northwest Queensland.
The company finished the December quarter with $58.6 million cash in the bank, and recently paid $135 million, or $0.38 per share, back to shareholders, following the sale of its Cloncurry project to Xstrata for $175 million.