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28/09 - Cortona plans to revive old gold camp

Cortona plans to revive old gold camp
BARRY FITZGERALD
September 28, 2009

GARIMPEIRO

Peter van der Borgh, the managing director of Cortona Resources (ASX:CRC), was once part of a research team at the University of Western Australia that conducted the so-called Giant Ore Deposits or GODS project.

GODS was all about studying the geological controls behind the formation and settings of the world's biggest mineral deposits.

Perth-based Cortona does not have a GOD project in its portfolio, but for a company with a market cap of $18 million (18c a share), it has the next best thing with its Majors Creek gold project, 60 kilometres east of Canberra.

Van der Borgh reckons Majors Creek is about to re-emerge as a gold camp. He can say re-emerge, as back in 1870-1891 and 1914-1916, more than 1.25 million ounces of gold was plucked by old-timers from alluvial workings and hard-rock operations.

In its revival plan for the little-known old goldfield, Cortona's initial focus has been on Dargues Reef, where it has proved up a ''starter'' high-grade (6.2 grams of gold a tonne) resource of 286,000 ounces.

It can be called a starter resource because nothing below 450 metres depth has been included, even though the granite that hosts the mineralisation probably plunges at least another five kilometres or so.

A scoping study into Dargues Reef released last week gave the sort of encouragement Cortona was looking for before committing to a feasibility study. It found an initial $30 million underground development would pull in 188,000 ounces of gold over 4› years at a cash operating cost of $470 an ounce.

Using a gold price of $1150, the starter project would produce a $68.4 million pre-tax profit over the period. The projected internal rate of return at 68 per cent is as good as gets in the sector.

SANDFIRE FIRES

It was another big week for Sandfire Resources (ASX:SFR) on the strength of exploration results from its high-grade Doolgunna copper/gold discovery to the north of Meekatharra in Western Australia.

The stock marched from $2.72 a share to $3.31, up 22 per cent for the week. It was little wonder the Sandfire boss Karl Simich was more pumped than the Geelong and St Kilda footy teams combined on Friday.

At the Resources Rising Stars conference on the Gold Coast, Simich told the 450 punters there that Sandfire was now proceeding on the basis that Doolgunna would be a mine.

Simich said the only question now was how big it would be. To find out, a fourth drill rig is being brought onto the site so an initial resource estimate can be made before year end.

After 24 holes, the mineralisation is getting wider and deeper, Simich said. Much of the excitement is based on Doolgunna being of the volcanogenic massive sulphide (VMS) type.

Where they occur elsewhere in the world, they tend to do so in clusters. Simich told the punters that Doolgunna was one of 18 bullseye magnetic targets identified from an airborne survey and, before it came to drilling any of them, Doolgunna was actually ranked the fourth most important by the group's geologists.

THUNDER ROARS

Thundelarra Exploration (ASX:THX) has been getting plenty of support in the rising resources market of late on the strength of its appeal as an asset play. Its 40 per cent share of the mothballed Copernicus nickel mine and its $19 million stake in the iron ore junior UMC have made sure of that.

Now the group's other focus, uranium exploration in the Northern Territory's Pine Creek region, is adding to its appeal. Another super high-grade uranium hit at the Thunderball prospect put a rocket under the group's share price on Friday, when it finished 10c or 29 per cent stronger at 44c a share.

The hits were high-grade all right. Best results included 15 metres grading 1.5 per cent uranium - including 1 metre at 20.3 per cent uranium - and 4.5 metres at 11 per cent uranium (visual estimate only) in another hole. In the uranium exploration game, mineralisation is usually reported in parts per million. Anything above 500 parts per million (0.05 per cent) is considered interesting.

No wonder then that the stock went for a bit of a trot on Friday. But it is very early days at Thunderball and way too early to say anything more than the results are interesting.

Garimpeiro attended the Resources Rising Stars conference as a guest of Read Corporate.

Source: The Sydney Morning Herald

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