Cazaly set to wheel in rig for WA copper campaign

Eighteen-year veteran of the ASX-listed mining space and Perth-based explorer Cazaly Resources is set for a busy season of drilling with the completion of earthworks at its flagship Halls Creek copper-zinc-silver project in WA’s Kimberley region. Having listed back in 2003, the company has been around long enough to accrue a remarkable stream of royalties that will provide the fuel for its exploration campaigns.

With a drilling contractor already secured and a heritage survey concluded, Cazaly aims to start RC drilling in mid-June with the program designed to test one electromagnetic and another geochemical anomaly.

I’d like to thank the Jaru Traditional Owners and the Kimberley Land Council for effecting the survey during these logistically challenging times. Cazaly can now proceed with their intended RC drilling programmes as planned.

Notably, past exploration at the flagship project has yielded a serious calibre of drill intercepts including 57m going a 5.04 per cent copper and 117m in a different hole running 0.32 per cent copper.

In its upcoming drilling program, Cazaly is going after porphyry copper mineralisation with its priority geochemical target at the project’s Bommie prospect, located 2.5km southwest of Halls Creek’s premier deposit, Mt Angelo North.

The extensive surface geochemical signature in combination with previous and broad intercepts grading up to 1.3 per cent copper inspired the explorer to allocate about 2000m worth of drilling to the prospect.

The company is also searching for massive sulphide mineralisation with its second target, an electromagnetic anomaly, found 5km southwest of Mount Angelo North at a prospect labelled Moses Rock.

Notably, the company modelled electromagnetic conductor plates at its premier deposit and at Moses Rock and found Moses Rock to be the larger conductor of the two – a finding soon to net the prospect some attention with the drill bit.

On other fronts, infill sampling is underway at the company’s Yabby nickel-gold project located 10km west of Laverton in WA’s north-eastern Goldfields and geophysical modelling is being performed at its Kaoko cobalt project in Namibia.

Cazaly acquired a 20 per cent interest in Halls Creek in 2013 for $100,000 in cash along with 1.25 million of its shares. In 2021, the junior was happy to shell out an additional $250,000 in cash for the remaining 80 per cent of Halls Creek, with a further $250,000 to follow upon first production.

Late last year Cazaly released an updated resource estimate of 1.7 million tonnes at 1.4 per cent copper, 1.4 per cent zinc and 12 grams per tonne silver for Mt Angelo North.

Cazaly’s portfolio spans three wholly-owned projects, three joint venture interests and two iron ore royalties. Whilst its list of projects is long, the March quarterly report suggests it has plenty of exploration capacity with $7.6m in the bank at the end of the quarter.

The company has been around long enough to experience the ups and downs of the junior exploration game and has the scars to prove it. In 2005 Cazaly boldly picked a fight with Rio Tinto over a lucrative iron ore tenement and eventually lost that fight– before going on to discover the Hamersley iron ore deposit 60km north of Tom Price.

By spinning off its 30 per cent interest in the Hamersley deposit in 2021, Cazaly picked up a 15.7 per cent interest in the holding vehicle – Equinox Resources – and a remarkable royalty of US$0.30 per tonne produced from the project. If the project ran flawlessly at full capacity the royalty would be worth a cool US$56.1m to Cazaly.

Importantly, the iron ore deposit is not the explorer’s only success in which it retains a financial slice of the pie. In 2019, Cazaly sold its Parker Range iron ore project to ASX-listed Mineral Resources for a total cash consideration of $20m and a royalty of $0.50 per tonne of iron ore produced from the tenements after the first 10-million-tonne milestone is passed.

A royalty stream is not a luxury every explorer enjoys, let alone two. Whilst it continues exploring with the drill bit, Cazaly says it will also keep one eye on the horizon for new projects of potential value.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au