Exco Resources (ASX: EXS) has released an upgraded Resource of 1.26 million tonnes at 1.29% copper and 0.63 grams per tonne (g/t) gold for 16,220 tonnes of copper and 25,700 ounces of gold for the Kangaroo Rat Deposit in northwest Queensland.
The company has increased Cloncurry Mining's previous Resource of 875,000 tonnes at 1.65% through additional infill and extensional drilling since it acquired the project.
Importantly, the mineralisation is open along strike to the west and at depth, offering the potential to increase the Resource further.
Also, limited core drilling is required to potentially allow conversion of the Resource into the higher confidence Indicated category.
To calculate the Resource estimate, a total of 56 reverse circulation and diamond drill holes were analysed.
The western-most hole drilled to date by Exco at Kangaroo Rat intersected 10 metres at 1.35% copper and 1.13g/t gold from 17 metres.
A historical reverse circulation hole drilled 50 metres to the southwest of the intersection is believed to have drilled over the main mineralised envelope.
As a result, Exco has planned a drilling program to test for western extensions to the Kangaroo Rat Resource.
A 3 kilometre long untested magnetic anomaly at Elder Creek, located beneath shallow cover, has been identified by a recently completed detailed airborne magnetics survey over the Kangaroo Rat Deposit and surrounding area.
A review of historic exploration reports suggests that the source does not appear to have been tested by a single historic drill hole.
Shallow rotary air blast drilling proximal to the margins of the anomaly indicate that the anomaly is fertile with highly anomalous copper to greater than 1000 parts per million.
A detailed gravity survey has also been completed over the Elder Creek magnetic anomaly, and initial processing of this data has highlighted several coincident gravity anomalies.
Mining Lease Application
Exco intends to lodge a mining lease application for Kangaroo Rat during 2012 encompassing the entire Kangaroo Rat deposit.
The company has engaged an environmental consulting group to soon begin field surveys in preparation for environmental approvals to be lodged during the year.
Field surveys will also be completed for the Wallace South deposit, located 1.5 kilometres south of Kangaroo Rat, which a mining lease application is currently being considered for.
The Cloncurry Project, which covers more than 1,920 square kilometres, now hosts a total Resource of 8.05 million tonnes at 1.62% copper and 0.49g/t gold.
At the end of the December quarter, Exco Resources had A$58.6 million cash in the bank, equivalent to about $0.164 per share.
The company netted $9.5 million in revenue at an average price of A$1,612 per ounce from its White Dam Gold Project for the quarter.
The company recently paid $135 million, or $0.38 per share, back to shareholders, following the sale of its Cloncurry Project to Xstrata for $175 million.