Rods are turning for Norfolk as big Chilean copper targets loom large

Norfolk Metals is about to hit its stride in Chile with the rods now turning at its Carmen copper project where Norfolk is going after a grab bag of tantalizing targets in a very shallow oxide zone that is littered with historic drill holes that look like they have been begging for follow up for years.

Below the oxide zone is an equally tantalizing sulphide zone that has historically thrown up some serious drill numbers like 69m at 1.37% copper from just 43m and contained within that old hit was a 24m intersection grading a respectable 2.15 per cent copper.

More on the sulphide zone later, but for now, it’s all about the shallow oxide zone that kicks off from surface and Norfolk’s vision to twin some of the old holes, drill it out further and then mine it cost effectively via a heap leaching operation – a strategy that has proven to be lucrative elsewhere in Chile.

Norfolk did a deal to farm into 70% of the Carmen copper project back in March and now has the rods turning on site. That deal was done with private operators Jason Greive and David Fowler whose company Transcendence Mining holds an option over the project.

Carmen sits in Chile’s copper‑rich Huasco Province, in the Atacama region, a jurisdiction that has delivered some of the biggest porphyry copper mines on the planet. Notably, it is just 16 kilometres from Teck–Newmont’s Relincho and Fortuna deposits — a geological postcode that oozes credibility.

The combined Relincho and Fortuna porphyry deposits weigh in with a stunning proven and probable mineral reserve totalling approximately 16.6 billion pounds of copper, 8.9 million ounces of gold,and 464 million pounds of molybdenum.

Historically, different players put almost 150 holes into Carmen for about 10,000 meters, some as far back as the late 1800’s. Small scale high grade artisanal mining is also evident at the project – generally a sure sign of mineralisation.

By 2002 more modern geophysics had sniffed out an elongated chargeability anomaly 100 - 300 meters wide and 2,400 meters long and later in 2004, mapping and additional soil sampling confirmed the extent of the copper oxide zone – the key focus of Norfolk’s attention.

And the historic oxide zone drill numbers clearly warrant more attention too with numbers like 27.5m going 1.12 per cent copper from just 1.5m including an 11.5m stretch that came in at 1.88% copper. Another 19m intersection showed .93 per cent copper from only 9m and another 2m hit was replete with a grade over 7 per cent.

By 2007, SRK had wrapped a starter (Non-JORC) 43-101 resource around the project of 5.6Mt at 0.6% Cu.

Norfolk says that resource is still open in all directions and notably, does not include some stellar hits that were never worked into the resource at the time. Numbers like 41m at 2.46% copper – and that was from surface – and included 4m going a whopping 17.37 per cent copper.

Another 39m intersection in the oxide zone grading 1.48% copper from surface is also yet to be worked into that resource along with 29m at 1.25% copper from surface and 14.9m at 1.82% copper from just 8.9m.

Norfolk is now planning to twin some of those holes to prove they were real and drill out the oxide zone resource ahead of building a low-cost, high-margin “heap leach” operation producing copper cathode. This strategy is not a shot in the dark either; Chile and its surrounding neighbours have a deep track record of successful heap leach operations, where favourable metallurgy, low stripping ratios and established infrastructure are able to create projects with rapid paybacks and robust margins. Norfolk says Carmen has all of these advantages and the geology gives Norfolk multiple shots at goal.

The oxide cap is highly soluble and amenable to heap leaching — historical column testwork recorded 72–82% copper recoveries with only moderate acid consumption and the consistent, at surface nature of the oxide blanket points to a scenario where the stripping ratio may end up being almost embarrassingly low.

Curiously, Norfolk looks to have put together a cast of people to develop Carmen that have some serious horsepower too, including Transcendence’s two directors Jason Grieve and David Fowler – both of whom will sit on the operational oversight committee at the project – and both of whom have been buying shares in Norfolk.

When it comes to heap leaching operations Fowler has been there and done it before, formally playing a leadership role at Finders Resources which operated the 20,000-tonne per annum Wetar copper heap leach project.

He is also pretty handy with the cap too having previously put away $400m in equity raises and a whopping $4b in debt as CFO of the $9b Merdeka Copper Gold. Greive was the CEO recently at Merdeka and has a calling card of mining majors that he has worked with over three decades or so including Barrick Gold, Placer Dome, Rio Tinto, North Ltd and Evolution Mining where he was the General Manager of the Cowal gold mine in NSW. He was also the COO of Red 5’s King of The Hill operation and was instrumental in the greenfield development of both Cowal and King of the Hills.

Both Greive and Fowler appear to be taking more than just a passing interest in Norfolk too – both hit their kick in the oversubscribed July $3.5m capital raise for Norfolk and Transcendence may even end up hanging around at the top of Norfolk’s share register given Norfolk has an option to take out Transcendence’s final 30 per cent of Carmen using Norfolk stock as payment. Trancendence will also appoint a director to the board of Norfolk.

Norfolk and Trancendence have also pulled on a General Manager for the project, Alex Raab, who is also not lacking in grunt. Raab, is well placed to be overseeing drilling operations at Carmen given he was intimately involved in eking out more than 8 million ounces at the Challenger gold mine. He also has an arms length resume working in and around some of the most successful mining projects in Chile.

Raab, Fowler, Greive and well known Perth Executive Chairman of Norfolk, Ben Phillips, in combination, appear well placed to realise Norfolk’s vision of a high margin low capex heap leaching operation Carmen.

And Phillips has another lucrative looking plan too that he says is only taking up partial focus - for now. Under the oxide zone at Carmen are a handful of potentially company making copper hits that were drilled historically. They are 69m at 1.37% copper from 43m, including 24m @ 2.15% copper, 14m at 1.77% copper and a 52m hit going 0.92% copper from 66m.

The maiden campaign will see 4 wildcat holes sunk into the sulphide zone and these holes might just provide a step change in excitement. All of which round out Norfolk’s strategy nicely.

Drill out the oxide zone, build a low cost heap leaching operation and start printing cash. Drill out the sulphide zone and use the cash from the heap leach operation to build a potentially stand alone mine if the sulphide numbers end up being real.

And unlike most maiden drill programs, with so much historic copper already discovered at this project it is hard to think there will be many or even any dusters in this campaign.

Norfolk is something of a freak structurally too with only 65m shares on issue, about half of which are held tightly by the top 20. It only has a very modest $10m market cap too– and about half that amount in cash at bank!

It is starting to make a bit of sense now as to why Norfolk’s July capital raise was oversubscribed and why both Greive and Fowler are hitting their own wallet’s to buy up Norfolk shares. This could get interesting – and with the copper price starting to test recent highs in the last couple of months - it could get interesting quickly.

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