Junior explorer Sultan Resources (ASX:SRZ) is gearing up to begin drilling a new electromagnetic (EM) anomaly at its E70/5082 tenement in Western Australia alongside Rio Tinto Exploration (RTX).
The drilling plans follow a heli-borne EM survey across the tenement — which forms part of Sultan’s Kondinin-Lake Grace exploration project near the town of Kunin — that highlighted a ‘significant’ geophysical anomaly potentially prospective for nickel mineralisation. RTX, a subsidiary of Rio Tinto (ASX:RIO), funded the EM survey as part of an option and farm-in deal over the WA tenement.
Under this deal, signed in June, RTX has the right to complete some preliminary exploration work across E70/5082 before choosing whether or not to earn up to 80% of the tenement by funding $2 million worth of exploration over 5 years.
This heli-borne EM survey forms part of RTX’s preliminary exploration work, and Sultan says the Rio Tinto subsidiary has confirmed its intent to exercise its farm-in option to begin earning its interest in the tenement. The planned drilling program in the area, for which Sultan is working to secure regulatory approval, will be funded by RTX as part of this farm-in arrangement.
Meanwhile, Sultan has recently applied for new open ground contiguous to E70/5082 around its current area of interest, with 3 tenements totalling 17 blocks having since been granted.
The heli-borne survey flown across E70/5082 outlined an area of ‘significant’ EM conductivity response over 750m in length and 230m in width, according to Sultan. This anomaly may resolve into two targets.
Sultan says the EM response is highlighted by a ‘strong’ late-time signal and sits within a circular regional magnetic feature. The geological setting and geophysical response are suggestive of the potential for magmatic nickel sulphide mineralisation.
RTX consultants have completed preliminary modelling of the target, with target depths for modelled plates starting at around 70m.
Sultan’s portfolio of exploration tenements includes targets prospective for copper-gold, structurally-hosted gold, nickel, cobalt, and base metal mineralisation across central New South Wales and south and southeast WA.
The company had $1.35 million cash at hand as of 30 June, according to its latest quarterly report. Sultan has a $3.11 million market capitalisation.
Write to Joshua Smith at Mining.com.au
Images: Sultan Resources