company profile
australia
encounter resources
Copper Shines
in the Desert
Western Australia-focused exploration company Encounter Resources has a history of
seeing potential where others don’t.
I
n its pre-AustraliaN
Securities Exchange listing
days Encounter Resources was
an early mover into the WA
uranium sector.
In 2004 it established an
extensive project portfolio targeting
calcrete uranium deposits in the
state’s Yilgarn province.
By 2007 Encounter had made
considerable progress, along
with joint venture partner Avoca
Resources, by establishing inferred
resources on three of the uranium
projects in the Yilgarn District
tenements.
This resulted in the reporting
of JORC-compliant resources at
the Hillview, Bellah Bore East and
Centipede Extension projects totalling
11 million pounds of near surface
U3O8 (uranium oxide).
Encounter is running a strategic
review of the Yilgarn calcrete
uranium resource to consider
their potential development and
commercial alternatives in terms of
advancement.
Although the Yilgarn District
uranium projects offer plenty of
upside for the company, it is currently
focusing the bulk of its attention on
the prospective Yeneena project.
The 1300 square kilometre
Yeneena project is located on highly
strategic multi-element ground
position in the Paterson province of
WA on the edge of the Great Sandy
Desert.
The large landholding sits in the
shadows of some of Australia’s most
significant mineral deposits. The
Yeneena project is located 40km
southeast of the Nifty copper mine,
30km northwest of the Kintyre
uranium deposit and 70km southeast
of the Woodie Woodie manganese
mine.
This region also hosts Newcrest’s
giant Telfer gold-copper mine 50km
northeast of the project.
Not surprisingly, the project
area is considered to be highly
prospective for Nifty/Mt Isa-style
copper mineralisation, silver-leadzinc mineralisation, Woodie Woodiestyle manganese mineralisation,
and unconformity-related uranium
mineralisation.
Encounter recently acquired the
remaining 25% interest to achieve
100% ownership of the Yeneena
project from Barrick Australia Pacific.
“Owning the Yeneena project one
hundred per cent outright is a good
outcome for us,” Encounter Resources
managing director Will Robinson told
RESOURCESTOCKS.
“Basically it gives us more
possibilities. What we are looking at
is multi-commodities, but having full
ownership of the project gives us the
“It’s still early days, but given the footprint
of copper, we could be seeing the beginning
of a major copper discovery at BM1.”
Will Robinson
encounter resources
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flexibility to do things differently with
each commodity.”
The company is in the middle of
its second field season at the Yeneena
project, and exploration activities
carried out so far at Yeneena have
yielded encouraging results including
high-grade drill intersections of
manganese, zinc and copper.
In May 2010, Encounter
announced the discovery of highgrade copper at the BM1 target at the
Yeneena project. This represents a
new greenfields copper discovery in
this highly prospective province.
Broad spaced aircore drilling
at BM1 identified an extensive
coherent zone of near surface copper
mineralisation which includes
numerous intersections above 0.5%
copper.
The copper enrichment extends
over 3km and the intersections are
generally at a depth of 20-70m.
Intersections to date include 4m
at 5.45% copper from 66m and 6m at
1.41% copper from 54m to the bottom
of the hole.
Encounter Resources is highly
confident that there is considerable
potential at BM1 for the discovery of
a sizeable primary copper source and
also for additional near surface copper
oxide mineralisation.
The copper mineralisation at
BM1 is hosted within black shale
of the Broadhurst Formation. The
exploration target at this prospect
is for a Zambian Copper Belt-style,
sediment-hosted copper deposit.
While the mineralisation remains
open in three directions, the BM1
prospect already has a world-class
copper regolith footprint and is
situated in an ideal structural location
adjacent to the regionally significant
McKay Fault which hosts the large
JULY/AUGUST 2010 RESOURCESTOCKS
Nifty copper mine operation 60km
north.
“It’s still early days, but given
the footprint of copper, we could
be seeing the beginning of a major
copper discovery at BM1,” Robinson
said.
Although the BM1 prospect is
coming along nicely at the moment
there are still a couple more prospects
standing in the Encounter stable that
could be worth keeping an eye on.
Located 20km north of the BM1
copper discovery, but still within the
large Yeneena tenement holdings, is
the MN1 manganese prospect.
Re-analysis of samples from
aircore drilling previously carried out
by Barrick at the MN1 prospect at
Yeneena yielded a pleasant surprise
by identifying potentially significant
manganese mineralisation.
High-grade, near surface
manganese intersections were
identified at the southern end of
a 14km gravity anomaly that sits
west and parallel to the regionally
extensive McKay Fault. This
significant gravity feature hosts
the prospective geology to form
Woodie Woodie-style hydrothermal
manganese deposits.
Intersections at the MN1 prospect
include 2m at 20% manganese from
25m, including 1m at 28% manganese
from 26m, and 3m at 16% manganese
from 21m. The recent drilling has
extended the area of known highgrade manganese to over 2.5km and it
remains open.
To complete the trifecta the
company has also recently discovered
high-grade zinc at the Yeneena project.
A round of diamond drilling at
the BM5 prospect in October 2009
intersected a vein of massive sulfide
returning 0.1m at 28.5% zinc, 2.3%
lead, and 33.9% silver.
“It is highly encouraging to
intersect high-grade massive sulfide
mineralisation in the first diamond
drillhole at the BM5 prospect,”
Robinson said.
“We’re very excited about what we
are seeing at the moment on a number
of fronts. In 2009, in a first round drill
program, we were pretty thrilled to
see what we got.
“Particularly going out in a
greenfields environment, under sand
cover and intersecting high-grade
copper and zinc at two separate
targets.
“It demonstrates that our targeting
models are working.”
These results encouraged
Encounter to quickly follow up with
another round of drilling, which it
commenced in April with an aircore
JULY/AUGUST 2010 RESOURCESTOCKS
rig and a diamond rig operating in
tandem. While many of the results
of the aircore drill program are still
pending, the initial results have
included additional high-grade
copper hits at BM1 and new areas of
manganese at MN1.
As it is on such a good run, the
company is already planning followup drill programs scheduled for
August-September 2010.
The recent drilling results for
copper and manganese have combined
to give Encounter Resources much
confidence in the Yeneena
project.
“This is one of the few places
that you could say, with your hand on
your heart, to have the real potential
to host a giant ore body,” Robinson
modestly proclaimed.
“It has already shown the ability
to do that and the vast majority of the
project hasn’t been explored because
of the extensive sand cover.
“All the mines that have been
found in the region so far have been
found by traditional prospecting
type geology where they have found
a bit of outcrop, which only makes
up around 5-10 per cent of this area,
and drilled underneath it.
“We’re not here looking at an
outcrop.
“We know that the respective
geological units that host the deposits
in this region extend under sand
cover and our targeting is getting us
into mineralised areas.
“There is no reason why our
areas should be any less prospective
that those areas of outcrop.”
– Wally Graham
Encounter has
intersected
high-grade copper
and zinc at two
separate drill
targets
encounter
resources
at a glance
Head Office
Level 7
600 Murray Street
West Perth WA 6005
Australia
Ph: +61 8 9486 9455
Fax: +61 8 6210 1578
Email: [email protected]
Web: www.enrl.com.au
Directors
Paul Chapman, Will Robinson,
Peter Bewick, Jon Hronsky
Market Capitalisation
$A19 million (at press time)
Quoted shares on issue
79,161,435
Major Shareholders
Directors and management 39.3%
HSBC Custody Nominees 13.9%
J Bernhard 2.6%
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