Encouraging new drilling at Segue Resources' (ASX:SEG) Salt Creek Nickel Project in Western Australia has confirmed the company's potential for discovering metallic sulphides on a geological complex known to host mineralisation similar to that found at Independence Group's (ASX:IGO) massive Nova nickel properties.
The latest exploration at Salt Creek - which included two traverses of aircore drilling to follow up detailed survey work at two coincident gravity and magnetic features - intersected three zones of mafic intrusive rocks that appear to be largely coincident with the targeted gravity highs.
The program comprised 20 holes (842 metres) reached an average depth of 42 metres and in all cases intersected and sampled fresh bedrock material.
Traces of sulphides have been identified in both hand specimen and in petrographic analysis.
These sulphides, including chalcopyrite, are interpreted as being of an igneous (magmatic) origin indicating that critical sulphur saturation has been reached as the magma crystallised, and thus confirming the potential of these rocks to form magmatic sulphide deposits.
A younger sequence of sediments averaging 15-20 metres overlies the basement rock.
This initial geological and geochemical information is expected to assist with the identification of potentially "fertile" intrusions that will form the basis for further exploration efforts by Segue in 2016.
The Salt Creek Complex (NYSEARCA:SCC) is a 150-kilometre-long belt of intermediate-mafic intrusions that are inferred to have formed along an Archaean-Proterozoic suture.
The intrusions are considered prospective for nickel, copper and PGE's, similar to those found at the Nova Bollinger and Nebo Babel nickel-copper deposits.
The intrusions do not outcrop and are concealed below recent sedimentary sequences, but, they are clearly visible within processed magnetic imagery.
The SCC is currently a focus of exploration by Independence after the discovery of significant mineralisation in 2013 at the Beetlejuice Prospect, 60 kilometres north of Segue's Plumridge Project.
An aircore hole at this site intersected 4 metres at 5.1% nickel, 2.5% copper, 3.5 g/t platinum, 4.7 g/t palladium, 1.6 g/t gold and 97 g/t silver.
Segue's Salt Creek holdings are proximal to AngloGold's Tropicana operation, which boasts 7.7 million ounces of gold.
Salt Creek is adjacent to Segue's Plumridge nickel project, where recent exploration by JV partner MMG (HKG:1208) is seeking to define specific targets for nickel and copper mineralisation that can be assessed with more focussed geophysical methods such as low frequency ground EM.
The China controlled international resources house will manage exploration and is required to spend a minimum of $1.5 million by 31 December 2016 and a further $5.0 million by 31 December 2019 to earn an initial 51% interest in the JV.
Plumridge is highly prospective for nickel-copper deposits similar to Nova-Bollinger, which lies about 120 kilometres southwest along the Fraser Range Belt.
Further north in the Pilbara region, Segue also maintains the Pardoo Nickel Project nickel and copper mineralisation is believed to be derived from a large-scale mafic-ultramafic intrusive complex located immediately north of the Highway nickel-copper deposit.
Detailed assessment of this large intrusion to define high priority nickel-copper PGE exploration targets will form the core focus of exploration initiatives in the short to medium term including detailed aeromagnetic and ground based gravity surveys prior to the onset of the wet season.
The results of the latest aircore drilling at Salt Creek provide a basis for ongoing programs of exploration, setting Segue up for continued newsflow which could stimulate positive share price movement.
This positive outlook is supported by the high prospectivity of the jurisdiction, which hosts the massive Tropicana mine and is now confirmed to bear geology similar to the Nova nickel deposits.
The new results also demonstrate that the gravity anomalies provide a robust targeting tool and that aircore is an effective method to delineate the size and extent of the intrusions beneath the transported cover.
Armed with this better understanding of how to efficiently explore the area, Segue is in a good position to continue improving the potential of Salt Creek and thereby maximise shareholder value.
Meanwhile, MMG's exploration work at Plumridge provides Segue a faster path and a higher probability of exploration success at that project.
Participation by a major player such as MMG is inherently encouraging for Plumridge and reflects well on the depth of Segue's portfolio across WA.
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