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Cassini Resources Ltd's Richard Bevan in Proactive Q&A Sessions™

Cassini Resources Ltd (ASX:CZI) is looking to add another premier deposit to its portfolio alongside Nebo-Babel, with drilling now under way at the wholly-owned West Arunta zinc-lead project in the Gibson Desert region Western Australia.

The program will be initially testing two Mt Isa-style, large-scale sedimentary zinc-lead targets, the Enceladus and Iapetus prospects.

To find out more, we are joined exclusively by Richard Bevan, managing director for Cassini Resources, in Proactive Q&A Sessions™.

PROACTIVE INVESTORS: Welcome Richard.

With drilling targeting Mt Isa-style style mineralisation, what initial indicators were used to define these targets, and what will the program comprise?

Richard Bevan:

Cassini has been progressing its West Arunta project since early 2014.

Geochemical surveys initially identified the presence of anomalous zinc and other pathfinder elements that are associated with sedimentary zinc deposits, most notably cadmium.

The Enceladus and Iapetus Prospects are the first drill-ready targets to be tested in the 2016 exploration program at the project.

These prospects have been prioritised due to observable outcropping mineralisation (gossans) occurring in-situ over a significant strike length.

Other targets will have further geochemical survey work done to identify the most prospective parts for future drill programs.

This program will be conducted over several campaigns throughout 2016, with the maiden drilling program currently underway.

The program will consist of 1,600 - 2,000 metres of reverse circulation drilling, with an average depth of about 100 metres.

The aim is to assess if there is zinc enrichment in the zones beneath the outcrop.

Can you take investors though what could be a modern day analogue of West Arunta?

Richard Bevan: A modern day analogue to our exploration model is the Century Deposit mined by MMG, with a pre-production resource of 167 million tonnes at 8.1% zinc, 1.2% lead and 33g/t silver.

Century produced a prominent zinc-lead soil anomaly centred on a siltstone outcrop.

Rock chip samples from this outcrop returned only 1-2% lead and zinc.

The outcrop was later recognised as part of the orebody, which produced a very subtle geochemical and visual expression of the mineralisation due to strong leaching and a lack of iron oxides.

These types of deposits tend to be of modest grade (7-12%) but are shallow and of significant scale.

What grades or widths would Cassini need to intercept to extend the drilling program?

Richard Bevan: The primary goal of the drill program is to find and test the primary zones of mineralisation.

Zinc is highly mobile in the weathered rock, that is the outcrop, so any indication of primary mineralisation and zinc enrichment would be highly encouraging at this early stage.

These are the first holes to be drilled into the project area so they will also be invaluable in improving our understanding of the controls and structural geology.

How have drilling costs and rig availability changed in the past year, and what is the company's forecast cash position after the program?

Richard Bevan: Drilling costs and rig availability is still very favourable.

We have sourced drillers who have worked in the region and this also keeps mobilisation costs to a minimum.

The budget for the program is about $400,000, which is well within our current capacity to fund.

We had $1.7 million in cash at the end of March, with an additional $500,000 due in May from an AusIndustry R&D refund.

Moving on to the company's Nebo-Babel deposits, what are the next steps?

Richard Bevan: We believe Nebo-Babel is Australia's premier undeveloped nickel and copper sulphide project.

The work we have done to date, including the Scoping Study and more recent optimisations, show that it will be a low operating cost, long mine life project.

Current market conditions are not favourable for the development of any new nickel projects, but we believe that when market sentiment improves, Nebo-Babel is well positioned to be one of the first projects to progress.

The forecast C1 cost is estimated at US$3.40/lb (on a payable nickel basis), comfortably below the current spot price, which is trading near 13-year lows.

This gives the company confidence that once in production, the project has the ability to remain viable during periods of significant commodity price volatility.

The project also has long initial mine life of 12 years with opportunity to increase this significantly, means that it is likely to have exposure to high nickel price periods of the commodity cycle.

Finally, should an investor consider adding Cassini Resources to their portfolio?

Richard Bevan: Our strategy has been to have some near-term opportunities that come through our active exploration programs that targets potential large scale opportunities.

The current West Arunta program is an example of this and we will have exploration news flow over coming months.

We also have a significant asset in Nebo-Babel that is currently undervalued by the market.

We are confident we will see this increase in value over the medium to longer term as the sentiment around base metals, particularly nickel and copper, improves.

The company with a market cap of just circa $10 million is leveraged to exploration success, and an increase in base metals prices.

PROACTIVE INVESTORS: Thank-you Richard.

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