This is the second in a two-part feature series.
This article is a sponsored feature from Mining.com.au partner Magmatic Resources Ltd. It is not financial advice. Talk to a registered financial expert before making investment decisions.
Magmatic Resources (ASX:MAG) is a junior exploration company on the verge of erupting into something magnificent with an advanced copper-gold target portfolio in the East Lachlan Gold-Copper Province in New South Wales.
As Managing Director Dr Adam McKinnon details in the first part of this feature series, Magmatic has cemented itself as an emerging copper play following a counter cyclical acquisition of an advanced portfolio in 2014.
What has built up since then is some impressive drilling results at its 100% owned Myall Copper-Gold Project that indicates the company is on the cusp of discovering a large porphyry system.
Driving the company’s growth strategy now in 2023 is the Corvette prospect area within the Myall Project.
Corvette prospect racing ahead
Magmatic started its high impact 2022 drilling program at Myall early in the September quarter, initially targeting the Corvette prospect area. Previous drilling completed in 2003 had established the presence of porphyry-associated copper/gold mineralisation and alteration at the prospect, which included historic intercepts of +1% copper in ACNMD090.
The MD says, based on recent results, the company has now accelerated its drilling and rate of exploration, particularly as there are now fewer disruptions from inclement weather.
McKinnon notes, as the company’s quarterly results were released on 31 January, it was ‘an incredible way to begin 2023’ with Magmatic’s first hole for the year intersecting visible sulphide mineralisation over an interval approaching 1km in length. The MD says this represents Magmatic’s largest step-out on the Corvette trend to date, and what has been observed is a clear indication of the potentially massive scale of the Corvette system.
McKinnon notes that it’s also pleasing to have intersected intense porphyry-style quartz-sulphide veining for the first time at the bottom of hole 421, with this zone now producing the best gold results seen at Corvette so far.
Further strong copper results to the south of Corvette have also seen the mineralised footprint expand rapidly to nearly 350m along a north-south trend.
He adds: “Corvette is open and poorly tested in every direction. Our whole story has been Corvette so far. Why Corvette has been so spectacular is that every single hole so far has returned strong copper mineralisation. And it’s immediately undercover and you rarely ever get that where every hole has mineralisation.
We’re very, very bullish about the potential of the whole area and just how underexplored it is.
Given that we know the Kingswood-Corvette mineralised corridor already extends to at least 1.1km in length and has only been sparsely drilled, I’m as excited as ever by the enormous potential that Corvette and the broader region may unlock as we continue our high impact exploration into 2023.”
“We’re very, very bullish about the potential of the whole area and just how underexplored it is”
Drilling has started around 300m southwest of Corvette at the Kingswood Prospect, with an oblique diamond hole set to test for extensions to a zone of previously defined copper mineralisation. The new drilling will test immediately below hole 21MYDD412, drilled by Magmatic in early 2021, that included 382m @ 0.20% Cu and historic hole MYACD001 with 70m metres @ 0.54% Cu & 0.15g/t Au. Completion of the current hole at Kingswood will see a total of 10 holes for 8,000m drilled for the initial phase of exploration at Myall.
In its quarterly report, Magmatic reports ‘strong prospectivity’ of the broader Corvette-Kingswood system has also been highlighted by encouraging new results from 22MYDD419, drilled several hundred metres northwest of Corvette. (Hole 22MYDD419 – 172m @ 0.18% Cu, 0.04g/t Au, 0.5g/t Ag & 9ppm Mo from 289m including 11m @ 0.44% Cu, 0.14g/t Au, 0.80g/t & 9ppm Mo from 299m; and 19.3m at 0.32% Cu, 0.16g/t Au, 1.10g/t Ag & 2ppm Mo from 401m; and 14m at 0.31% Cu, 0.03g/t Au, 0.8g/t Ag & 2ppm Mo from 466m.)
The results from 22MYDD419 are comparable to a number of the intervals in the historic drill holes at Corvette, suggesting the alteration and mineralisation system at Myall is potentially very large in scale.
For a cashed-up junior, the MD simply says these results are ‘very, very exciting’.
Magmatic solidifying its financial position
Magmatic ended Q4 2022 with $5.316 million cash at hand after a placement in late 2022.
In November the company obtained binding commitments from institutional and professional investors for a placement of some $3 million (before costs). The placement was strongly supported by both new and existing investors.
Funds raised via the placement are being applied to the expansion and acceleration of the high impact drilling program at Myall following the aforementioned strong initial results at Corvette, in addition to continued exploration of other high priority targets in Magmatic’s portfolio and for general working capital.
McKinnon says the company is ‘exceptionally excited’ by the opportunity the capital raise provides Magmatic towards defining a potential Tier 1 porphyry copper-gold deposit.
This access to capital also places Magmatic in a strong position to continue on from its successes last year.
As reported in Magmatic’s quarterly activities report released 31 January, drilling at Myall included 9 diamond holes totalling more than 7,200m have now been completed. The company notes that ‘exceptionally’ wide intervals with copper-gold-molybdenum mineralisation were returned throughout the quarter from Corvette.
McKinnon says Corvette looks to be placing Magmatic in pole position to become the next major copper player in New South Wales, right next to Northparkes.
And its timing could not be better as the world needs Myall to come online. Why?
Global supply strains
Copper production over 2020-2023 is expected to have grown at a CAGR of 5.4%, to reach about 25Mt this year, with Chile, Peru, DRC, the US, and Indonesia, (the 5 largest suppliers), expected to collectively increase output from 11.2Mt in 2020 to 13.1Mt in 2023.
However, S&P Global suggests that the global copper market supply could fall far short of historic levels of demand by 2035. The ratings and data research firm says the severity of the deficit will largely depend on the mining industry’s ability to expand capacity as green energy transition-related applications are expected to boost overall copper demand to about 50Mt in that timeframe from the current 25Mt.
According to the S&P Global report, the copper market in 2035 could see a deficit of up to about 1.5Mt in the ‘high-ambition supply scenario’ and up to a 9.9Mt deficit in the ‘rocky-road supply scenario’.
“Of course, with decarbonisation and moving towards net zero, the demand for copper globally is only going to increase”
McKinnon says: “Of course, with decarbonisation and moving towards net zero, the demand for copper globally is only going to increase. The world needs to make 5-6 Tier 1 discoveries a year to make up the increasing demand for copper.
The past year was challenging for a lot of companies in mining but I think the consensus is that demand will continue for copper for some years to come. So, it’s a great position to find ourselves in. We have this fantastic deposit and we’re in a well-known and friendly mining jurisdiction. Sovereign risk in Australia and where we are in New South Wales is also very, very low.”
A great position to be in indeed.
Magmatic Resources erupted onto the New South Wales copper-gold scene with a strategic acquisition of assets in 2014. In less than a decade, the company has been able to position itself on the brink of discovering a large porphyry system.
In a mining jurisdiction in which the ‘world-class’ Northparkes mine is just down the road from Magmatic’s Myall Project, the company appears to be just a few drill results away from a seismic shift in its value proposition.
As McKinnon notes: “In the near-term we’re going to really explore the Corvette prospect and grow it and we also want to piggy-back off that to explore the broader Myall region. Each of our holes have hit some high-grade mineralisation, with a similar grade profile to Northparkes, and that’s the exciting thing for me.”
Write to Adam Orlando at Mining.com.au
Images: Magmatic Resources Ltd