Exploration by Rio Tinto at one of its sites in a part of Western Australia that has been touted as potentially rich in copper has so far failed to find any economically viable veins of ore, the miner’s partner in the project said on Tuesday.

Antipa Minerals lodged a series of exploration updates with the Australian Securities Exchange on Tuesday including one covering its Citadel project with Rio in the state’s Paterson province.

Antipa noted “weak mineralization” in the Folly target area that is part of that project, adding that at this stage there was “no follow-up envisaged”. It said that no follow-up was warranted at the MB1 target area either.

However, it said it was still exploring around the Calibre deposit, with the results of an aerial electro-magnetic survey still pending.

Rio, which declined to comment, is exploring on Antipa’s holdings under a farm-in deal which gives it rights to buy into a joint venture with Antipa. It holds a separate set of exploration rights in the region where it is building an airport and setting up a mining camp, stirring speculation of a major find as explorers have flocked to the area.

“The grades are low - they didn’t come up with any really high-grade intersections,” said Warren Edney at broker Ballieu Holst in Melbourne.

“It doesn’t kill the story...this is not all of Rio’s ground. It means that Rio would be prioritizing their own work program.”

In the past year, Rio has boosted its exploration holdings tenfold in the Paterson, beyond its shared ground with Antipa as miners step up exploration to secure growth.

Rio’s interest in the area, which already hosts one of Australia’s largest copper and gold mines - Newcrest’s Telfur, has sparked a stampede into adjacent lots by other explorers, who see Rio’s aggressive activity as an indicator of a highly-promising find.

Under the terms of its deal with Antipa, Rio Tinto will make escalating payments to the explorer of up to A$60 million ($43.19 million) to reach a stake of up to 75 percent in the joint venture. If it completes the current stage to April 2020, Rio would have a 51-percent joint venture interest.

“At a quick glance, the drill results show that the grade isn’t high enough to be economic,” said a mining engineer, declining to be identified due to the sensitivity of the topic.

“It’s still early days, but if this is where they are focusing and those are the kind of results they are getting, it’s nothing to write home about. Particularly if you’re Rio.”

 

Source: reuters.com

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