Helix mining in Cobar

Helix Resources using capital and composure to capitalise on the Cobar region

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

Emerging copper mining company Helix Resources (ASX:HLX) has a strategy very much borne out of its own name.

Like an auger drill rig, in which the helix spiral angle of a twist drill bit (measured between the centre shaft and helix edge) has a singular focus, so too does the Perth-based company that bears the same name.

Helix Resources has a singular focus on the greater Cobar region of New South Wales where it is evaluating numerous historical and early-stage targets to identify and advance new copper prospects.

While copper was discovered at Cobar in circa 1869, many junior exploration companies have tried to drill their way across deposits hosted in Early Devonian rocks over the years, yet not all have been successful.

As Managing Director Mike Rosenstreich explains, Helix Resources has an advantage where it can strategically and methodically undertake due diligence on the region to fully understand the geology.

The company secured a strong funding position in May 2022 and is well-capitalised to execute its strategy to add to existing Mineral Resource inventory through a systematic, methodised, and expansive works program.

With an established, Orange-based exploration team of about 8, Helix is aggressively widening its regional scale exploration activities to maximise potential for a major copper discovery.

As Rosenstreich notes: “We are planning and investing for discoveries, it’s not going to be an overnight success.”

Helix tenements Cobar

Leverage to exploration success

For a junior explorer, Helix is in an enviable position with $12m cash at hand, most of which will be spent in the coming 12 months. This means Helix can take a wider front in terms of its exploration activities to get more regional exposure for new targets.

For its FY2023 budget, the majority of cash will go into exploration activities of which more than half is directly related to drilling and geophysics, while about 15% will be used for corporate, investor relations, and business development.

As Rosenstreich notes, the $12 million in the bank allows Helix to acquire large-scale regional data sets, which are generally expensive to acquire. The company is afforded the luxury of being able to be more patient and therefore methodical in generating regional targets, as there is no near-term need to tap the market again for more capital.

Also, as the MD notes, being cashed up in the current environment puts shareholders at ease that Helix can focus on its expansive exploration program.

We can take more risks, test more targets, fail more on our way to a discovery because again, we are not raising funds ‘tomorrow’.

For investors, it means no upcoming capital raises and immediate leverage to exploration success by a company that is focusing a large exploration budget into one area which is mainly copper in Cobar.

“We can support a larger team and more activities at one time to do work on both advanced targets”

We can support a larger team and more activities at one time to do work on both advanced targets, which does generate ‘news’, such as drill intercepts and copper assays, as well as allowing us to focus on the less newsworthy regional target generation work.”

Having the team of geologists based in Orange in New South Wales is also less of a burden on the company as it does not need to employ a FIFO workforce.

We have a locally based, permanent exploration team, so a real commitment and focus on the exploration work. No FIFO or an assortment of contract geologists floating in and out – we create and retain our IP and innovative culture.”

Confident in the Cobar region

In early August, Helix announced a regional scale auger geochemical sampling program to rapidly evaluate historical and early-stage targets to identify and advance new copper prospects to add to existing Mineral Resource inventory at its assets in the greater Cobar region. 

The regional scale, 13,000-hole geochemical sampling program is being complemented by geological mapping and new geophysical surveys such as Versatile Time Domain Electromagnetic (VTEM) – a successful ‘discovery tool’ in the district.

The company has over 240km strike of prospective copper trends with numerous ‘poorly tested’ historical workings, anomalous drill intercepts and geophysical targets. 

Helix’s regional scale exploration activities also includes additional airborne geophysical surveys and reprocessing existing large data sets,  as well as regional structural mapping, and interpretation. 

Concurrently, the company will continue its active reverse circulation (RC) and diamond drilling programs on its more advanced targets. 

Furthermore, Helix has the financial and personnel capacity to rapidly follow up to tighten up sample spacing to define copper targets for drill testing with either a combination of geophysics, infill auger, or scout RC drilling.

Rosenstreich notes that these regional scale exploration initiatives have been designed to generate additional advanced targets to increase the level of drilling activity to deliver significant growth of the existing copper resource base.

Drilling down and buckling up

We are going out regionally, and basically doing works that juniors often don’t do as they can’t take the risk as they are not well-enough funded to undertake regional-scale types of work.

“We are going out regionally, and basically doing works that juniors often don’t do as they can’t take the risk as they are not well-enough funded”

So, we’re buckling up to stay focused on the region and use our position with $12 million to focus on a wide range of works, not just focused on drilling.”

Rosenstreich explains, from his perspective the Cobar region is particularly of interest to a cashed-up junior explorer such as Helix to have exposure to for a plethora of reasons.

It’s a well-endowed region – to the north, Aeris’s (ASX:AIS) Tritton operations have been going at about 25,000tpa copper for the past 30 years and continue to make new discoveries such as in 2019, with the Constellation deposit.”

In addition, to the northwest the region also hosts Glencore’s (LSE:GLEN) CSA Mine – one of Australia’s highest grade copper projects. At well over 100 years old, CSA has been operating at about 50,000tpa Cu for the past 25 years. Glencore reportedly signed a $US1.1 billion deal to sell the CSA mine to NYSE-listed Metals Acquisition Corp in March, which would see it issued a $US50 million stake in the company, however the transaction has not yet been inked.

Also, the MD notes that to the south, there are gold and base metal operations, as well as “emerging mines” including Aurelia’s (ASX:AMI) Federation copper-gold deposit under feasibility study, and Peel Mining’s (ASX:PEX) copper-gold and base metal deposits.

The Cobar region remains underexplored. I know it’s a cliché but it has been held by juniors for the past 10-20 years. This often means a lack of funds or financial commitment to undertake large-scale regional surveys like geophysical, geochemical surveys to provide the essential, underlying data layers to find and then rank for follow-up new targets. 

Previous work often concentrated around historical mines or mineral occurrences. With the $12 million funds we have we can afford to acquire these larger data sets to optimise and target our exploration.

Again, we can be more patient and take more risks – not every activity or drillhole needs to generate a headline as we test more earlier stage targets.”

Ready to overcome any hurdles

For Helix, an additional benefit of focusing on the greater Cobar region is that it is close to infrastructure such as existing copper processing facilities, is near the towns Nyngan and Cobar, and has excellent regional road and rail networks.

Helix drilling Cobar

Yet Rosenstreich has been in the mining game long enough to know that while it does have an advantage few juniors get to enjoy, there will be some challenges Helix will need to overcome.

A key hurdle Helix is actively working to jump is regarding land access, particularly in its eastern tenement group where the land use is largely cropping. 

So, especially now with abundant rainfall, the farmers are trying to get 2 crops in a year and we are having to work around their sowing – growing and harvesting cycles which can create quite small windows to get on the ground with drill rigs.  

This is not so much of an issue on our western tenements ,which is generally grazing lands country. My colleagues working in the Mt Isa areas (Queensland), or the Patterson (WA) don’t appear to have these land-use conflicts to the same extent.”

As the MD adds, this is why having the exploration team based locally in Orange is so important.

Another feature of the Cobar region is that technically, much of the terrain is covered which means orebodies are not detectable by more traditional exploration methods. It requires more modern geophysics and geochemistry. For example, the detailed regolith maps Helix created ahead of planning its large 13,000 sample auger geochemical program.

However, as mentioned earlier, a cashed-up Helix is in it for the long haul and does not expect to be an ‘overnight success’ in the Cobar region.

The upside it sees is underpinned by generating large-scale regional data sets utilising effective modern scientific techniques, as well as having a dedicated, skilled, and locally based team, taking a district-scale perspective. 

This in turn will enable Helix to understand the large, regional scale controls of mineralisation so it is able to prioritise its work and also target new areas for possible consolidation.  

Rosenstreich adds: “We’re not aiming to get one-hit wonders. We’re creating and using big data sets to understand the geology and that requires patience.”

As the MD mentioned earlier, ‘it’s not going to be an overnight success but essential to achieve discovery success’.

Write to Adam Orlando at Mining.com.au

Images: Helix Resources Ltd
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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.