Cohiba Minerals has clear path and understanding of growth strategy moving into 2023

This is the second in a two-part feature series.

This article is a sponsored feature from Mining.com.au partner Cohiba Minerals Ltd. It is not financial advice. Talk to a registered financial expert before making investment decisions.

In part one of this series, Cohiba Minerals (ASX:CHK) Chief Executive Officer (CEO) Andrew Graham detailed the questions and interesting opportunity the company is assessing within its ‘highly strategic’ tenement package in the world-class Gawler Craton.

For Cohiba, which has assets located in South Australia, Western Australia, and Queensland with a key focus on its Olympic Domain tenements in South Australia, the junior explorer is pondering a profound question over one tenement in particular – Pernatty C.

As the CEO explained in part one, at Pernatty C, the company was in a pursuit of a potential Zambian‐style deposit and had been caught off guard when it encountered substantial intersections of zinc, lead, and silver. 

Graham was initially ‘surprised’ by the assay results as its original intent was to look for Zambian Copper Belt (ZCB) style mineralisation, as there was no indication this area may be prospective for zinc, lead, and silver. As he explains in part-two of this series, it appears to be worth investigating further.

“To this end any zinc-lead-silver discovery is worthwhile pursuing”

“To this end any zinc-lead-silver discovery is worthwhile pursuing but with the understanding that we have encountered mineralisation at depth (>700m) and as such the grades and tonnage would need to support ongoing investigations at these depths.”

Cohiba looking to dominate in Olympic Domain

Graham reiterates that as questions over Zambian-style deposits are being pondered, what is already known is that Cohiba’s Olympic Domain tenements are in a neighbourhood proven to host IOCG mineralisation.

IOCG deposits typically form within ‘provinces’ where several deposits of similar style, timing, and similar genesis form within similar geologic settings. As such, these are attractive to exploration companies like Cohiba from both a mining and investment perspective.

The CEO explains: “The Gawler Craton, the largest geological province in South Australia, covers an area of 440,000km-square and despite hosting mega IOCG deposits such as Olympic Dam as well as Carrapateena, Prominent Hill, and Oak Dam, IOCG exploration remains an exercise of looking for a ‘needle in a haystack’. 

There is significant information in the public domain on IOCG deposits and in particular the stellar work undertaken by Kathy Ehrig of BHP over many years has greatly aided the junior companies in their exploration efforts. 

while there are numerous variables …that need to align to form an economic IOCG deposit the attraction remains that a single significant discovery is enough to catapult a junior company into prominence” 

So, while there are numerous variables, such as fluid types, geothermal gradients, regional and local structures, host materials, metal sources and alteration styles that need to align to form an economic IOCG deposit the attraction remains that a single significant discovery is enough to catapult a junior company into prominence.” 

Graham says IOCG mineralisation styles in the Olympic Domain have largely followed the massive breccia pipe model, the exception being Prominent Hill for which the mineralisation is strata-bound. Elsewhere in the world, IOCG deposition style is more varied, with fault-shear hosted deposits in South America, such as Cristalina IOCG, Sossego, the Saloba 3 Alpha, Mantoverde, and Candelaria. 

In the Cloncurry IOCG province of Queensland, IOCG deposits directly associated with faulting-shearing occur at Ernest Henry, Starra-Selwyn, and Great Australia. The bias in South Australia likely has a lot to do with the difficulties in exploring under 100s to 1000s of metres of cover, which limit the deposit styles to those that will present a well-defined geophysical anomaly. 

The CEO adds, this limitation in the initial conditions of drill planning, should not also preclude exploration for other structural styles if the geology from drilling suggests their presence.

Galloping ahead with Horse Well

Meanwhile, on 28 November, Cohiba updated the market on its exploration activities and a technical report on hole HWDD07 at the Horse Well prospect. Following a 3-week delay due to flooding and the subsequent inability to access the drill rig; hole HWDD08 was completed to a depth of 1,509.9m with samples being prepared for assaying. Assay results for HWDD01 and HWDD02 (Horse Well) are on their way, along with the in-fill assay results for PSDDH01 (Pernatty C).

At Horse Well, HWDD07 was completed to a depth of 1,519m and was targeting the extension of the Bluebush Fault and associated copper mineralisation. The CEO says drilling intersected the Bluebush Fault near the expected location, giving more confidence in the orientation of the fault for step-out drilling. Low-level veining with chalcopyrite mineralisation was encountered through much of the hole, associated with quartz veins and siderite matrix breccias.

Bleaching and oxidation of mafic intrusion in the footwall of the upper Bluebush Fault associated with siderite veining, and vein and disseminated chalcopyrite, are indicative that the Bluebush fault has been used as a fluid conduit for mineralising fluids with increased oxidation compared to the 3 northernmost holes.

Brecciation, mostly with siderite and low level disseminated chalcopyrite matrix, is prominently associated with the Bluebush Fault and persistent breccia veining in the basement rocks throughout the hole.

Cohiba also reported that drillhole HWDD06 / HWDD06W1 was completed in July 2022.

HWDD06 had to be abandoned as the hole reached basement due to drilling conditions but was successfully completed via wedge hole HWDD06W1.

HWDD06 was targeting a coincident magnetic and gravity anomaly sited 5km west of BHP’s (ASX:BHP) up-and-coming Oak Dam deposit.

Graham notes Cohiba had previously tested the magnetic portion of this anomaly with  drillhole HWDD03, which had intersected some strongly altered quartz-earthy hematite-K-feldspar-epidote-chlorite-(muscovite) rock, which left open the potential for a ‘near-miss’ of an IOCG (iron oxide-copper-gold) system, and hence the design of HWDD06 to test the gravity portion of the anomaly.

HWDD06W1 intersected mafic intrusives, Donington Granite, and a pre-Donington gneiss. The Donington Granite is the host rock to the Oak Dam and Carrapateena IOCG deposits. The CEO says the gain in geological understanding from HWDD06W1 and HWDD03 can be used to refine the geophysical model in the search for unexplained anomalies that may be indicators for IOCG-style mineralisation.

He explains that the Horse Well prospect represents a key IOCG target zone within the  Gawler Craton and Cohiba remains committed to investigating it to the fullest extent possible. 

“HWDD06 is considered to have great potential and was earmarked for investigation following encouraging results from HWDD03, HWDD04, HWDD05 and HWDD05W. Given the considerable target depth, we have ensured that all technical information at our disposal has been scrutinised in detail to maximise our potential for exploration success.”

“HWDD06 is considered to have great potential and was earmarked for investigation”

Meanwhile, at Warriner Creek, Cohiba recently announced that given the lack of significant copper, gold, and rare earth element (REE) results from the initial drilling program, the company decided not to continue with the farm-in agreement having already met its obligations for the initial stage. Cohiba sent a formal letter to Tigers Dominion Group outlining its decision not to progress with the farm-in.

The Warriner Creek West prospect is in close proximity to Oz Minerals’ Prominent Hill IOCG copper-gold mine, and Peak Iron’s Peculiar Knob mine, which also has IOCG affinities. The target was delineated as a magnetic high in what is otherwise an area characterised by low magnetic responses. Magnetite is associated with IOCG end member style mineralisation, such as seen in the nearby Peculiar Knob and Cairn Hill deposits. 

While historical drilling in the area indicated the potential for REEs associated with sericite alteration, while these were fully investigated along with the potential for gold  mineralisation there was a lack of these minerals to be found, Graham adds.

Well-placed heading into New Year

As Cohiba seeks answers to the ‘what if’ and ‘what is it’ questions over its Pernatty C tenement, the company looks to be well-financed to continue its works programs moving into 2023.

On 30 November, the company reported its intention to offer eligible shareholders the opportunity to participate in a Share Purchase Plan (SPP) to subscribe for additional shares in the company.

The SPP is targeting $2 million before costs (with capacity to accept oversubscriptions as described below) with an issue price of $0.006 per share. Every 2 shares under the SPP are to be accompanied by 1 free attaching options, with an exercise price of $0.01 and expiry date of 2 years from issue. 

The SPP offer is not underwritten.

Funds raised under the SPP will be used for additional exploration activities at the company’s exploration assets located in South Australia, Western Australia, and Queensland and for working capital requirements.

The SPP offer is scheduled to close on 16 December 2022 at 5pm AEDT. 

Looking ahead into 2023, Cohiba looks more comfortable answering some of the questions it has around the mineralisation of some of its unique deposits.

Yet there is no question that shareholders and the market alike will be keen to hear what the company has to say early in the New Year.

Write to Adam Orlando at Mining.com.au

Images: Cohiba Minerals Ltd & iStock
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Written By Adam Orlando
Mining.com.au Editor-in-Chief Adam Orlando has more than 20 years’ experience in the media having held senior roles at various publications, including as Asia-Pacific Sector Head (Mining) at global newswire Acuris (formerly Mergermarket). Orlando has worked in newsrooms around the world including Hong Kong, Singapore, London, and Sydney.