Thundelarra's (ASX:THX) CEO, Tony Lofthouse, has joined Proactive Q&A Sessions™ exclusively to discuss the company's intentions and commitment to its 90%-owned Red Bore prospect (M52/597) in Western Australia's Doolgunna region.
Exploration at the project recommenced in April 2014 following the resolution of an ownership dispute.
In the following year and a half, work has significantly advanced the understanding of the geological and structural setting of the project and identified exciting potential targets in a region of very active exploration.
PROACTIVE INVESTORS: Welcome Tony.
First of all Tony, can you please provide an update on Thundelarra's commitment to Red Bore?
Tony Lofthouse: We are absolutely committed at Red Bore. We consider it our prime exploration project, and continue to be very excited by its potential. Its prospectivity has only been enhanced by the recent discovery and current activity at Monty nearby.
All our board, management and staff are Thundelarra shareholders too - shares bought with hard cash, not "freebies" - so of course we want to discover something just as much as all our other shareholders.
It would always be nice for things to happen quicker, but we are not going to sacrifice rigour for speed. And the regulatory processes quite simply take time.
Can you outline progress made to date at Red Bore?
Tony Lofthouse: I for one think we have come a very long way in the 20 months since we re-started work in April 2014.
I came on board in April 2012 and at that stage we had not yet earned an interest.
We were in the process of earning our 60%, but needed to declare a JORC resource to satisfy that earn-in.
We did that in early May 2012, submitted the earn-in notice that our JV partner declined to accept, ended up in the Supreme Court and in October 2013 the Court found in our favour and awarded us the 60% earn-in interest plus costs.
We then negotiated a way to get past the matter of costs and all other outstanding issues and get back to exploration, resulting in us ending up with 90% of Red Bore and 90% of Curara Well.
We stopped exploration spending during the dispute, as there was no point in using shareholder funds until we had certainty about our equity in the project.
So that two year hiatus, although frustrating, resulted in us having 90% of Red Bore and most importantly it resulted in new clean Joint Venture agreements.
We rate that a pretty satisfactory outcome, especially as it meant we could get exploration underway again in earnest.
And that exploration has hit 28% copper intersections, unlocked the key to the Gossan mineralisation, and identified new targets at Impaler and other locations.
We have still only scratched the surface, but rushing into deep and expensive drilling without clear targets to test would be the quickest way to waste our shareholders' money.
We still have plenty to do and plenty of enthusiasm to do it. We remain convinced that the big one is down there and persistence and patience will help us find it.
What are the next exploration steps at Red Bore, and what is this looking to achieve?
Tony Lofthouse: We have received approval for the next PoW (Program of Work) and are currently in the process of appointing drillers, preparing drill pads, organising field crews - all the usual preparations for the program, which will involve a combination of reverse circulation and diamond drilling.
The main objectives are:
- To continue to follow the mineralisation at Gossan down deeper. Our main target here is to test down plunge. We previously announced an off-hole DHEM conductor that appears to coincide with a downhole magnetic anomaly. The results of this will guide the exact targets for the subsequent holes at Gossan in the programme.
- At Impaler, the Ground Magnetic (GMAG) survey clarified the structure that we believe controls the copper-silver-gold mineralisation we have hit there. We need to drill test this new interpretation which suggests the mineralisation could be slightly further north than previously thought.
- To re-test an as yet unnamed magnetic anomaly east of Gossan. Earlier drill testing found jaspilite with disseminated magnetite, which explained the anomaly. However, the rock associations found at Monty, where jaspilites and exhalites are being found close to the VMS mineralisation, mean we need to revisit this target.
Moving on to Thundelarra's other assets, can you please update investors with an exploration plan for 2016?
Tony Lofthouse: Further follow-up at Red Bore, on the back of the results of the current program, will lead the way.
Curara Well is still very much alive and in 2016 we will decide the best way forward to test the model further for both copper and gold potential.
We have EM conductors to test at Ox-Eyed Herring in our Allamber, NT project, which is mainly a copper target. We won't be able to get in there again until the end of the wet season.
Results of the recent drilling at Sophie Downs (zinc and graphite targets) in the East Kimberley are imminent and we will need to decide appropriate next steps there when the results are in.
If shareholders approve the acquisition of the Red Dragon gold exploration assets at the General Meeting on 11 December, then we want to drill walk-up targets in the first and second quarters.
These projects are in geologically prospective areas around Meekatharra, right next door to the Andy Well and Bluebird operating gold plants.
There is a growing amount of exploration activity in the area and we want to be an integral part of that activity. Any sort of good drilling result is likely to benefit shareholders.
And don't forget our 20% free-carried interest in the Keller Creek tenement in the East Kimberley. Panoramic announced in late August that the Savannah North Upper Zone mineralisation extends an estimated 2 kilometres to the west under Keller Creek.
Read Panoramic's announcements of 25 August and 01 October, particularly the results of hole SMD164, and you'll see why we are so excited by the potential value our 20% fci represents. We do not believe that our current share price ascribes any value to this interest.
We're still seeking partners for the Ngalia Basin uranium project, so we're keeping our expenditure there at a bare minimum as the search continues.
What is Thundelarra's current funding position?
Tony Lofthouse: We had just over $4 million in the bank at the end of September. Our cash burn rate is currently about $1 million per quarter, with a minimum 66% going in the ground and 33% on admin.
Last quarter the split was 76%/24%. We are absolutely serious about maintaining this ratio and ensuring that shareholder money goes into the ground through rigorous exploration to test all our projects.
Finally, why should an investor consider adding Thundelarra to their portfolio?
Tony Lofthouse: There are several reasons:
- We have active exploration projects that will deliver consistent newsflow over the next few quarters.
- Our projects all have real, solid, geological targets with real potential of a successful discovery.
- We don't have all our exploration eggs in one basket so THX offers shareholders multiple "bites of the cherry".
- We put money into the ground and don't sit on our cash, but also the money is not wasted. We are very careful to ensure our spend delivers best possible value for each dollar spent.
- We are liquid. In the past 18 months about $65 million worth of THX shares has traded - that equates to two times the company's free float.
- Average shares per day over that period is just under 1 million, for about $150,000 worth per day. Recent activity has been quieter, but we are still amongst the most active of the exploration stocks.
- All the company's employees own shares so we have the same desire for exploration success as every other shareholder.
PROACTIVE INVESTORS: Thank-you Tony.
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