Carbonatite mineralisation hit in drilling

Paul Howard | Analyst | Canaccord Genuity (Australia) Ltd.


C3 and C4 targets return mineralisation: Dreadnought Resources (DRE-ASX) has hit mineralised carbonatites in initial drilling of the C3 and C4 targets within the Mangaroon Project in WA. The first 14 holes at C3 and C4 have been drilled on two fence lines and hit numerous intrusions.

Thirteen of the 14 holes have intercepted rare earth mineralisation. Mineralised thicknesses average 4m and include a 38m weathered carbonatite and a 54m amphibole magnesio-carbonatite interval. The initial drilling reported is very much in line with expectation and importantly, validates the exploration model and concept that the ovoid shaped interpretations from geophysics are indeed carbonatites, and that they are continuous at depth beneath thin cover.

As well as REE mineralisation, DRE is also seeing phosphate, titanium, graphite and niobium mineralisation, which is said to be common in carbonatites like Mt Weld. The first pass RC program to test the carbonatite targets is continuing with 69 further holes designed on a wide-spaced, 160m x 160m pattern across the broader C1-C5 target area. Initial assays for C3 and C4 are expected next month.

Yin continues to return high-grade intercepts: Last week, DRE announced assays from a further 43 completed RC holes over Yin. Total reported assays for Yin is now 84 holes out of 120 completed.

The latest results confirm thick, high-grade mineralisation within ironstones and include:

  • 24m @ 2.57% TREO from surface (incl. 11m @ 4.5% TREO)
  • 31m @ 1.64% TREO from 62m (incl. 6m @ 6.73% TREO)

Valuation and recommendation: We maintain our SPECULATIVE BUY recommendation and price target of $0.24. We recently initiated coverage of DRE, where we modelled an initial offering of 15-20Mt from the 3km strike already drilled at Yin.

Given Yin has been traced for over 16km and DRE also has compelling targets further afield, a 40Mt resource would appear to be achievable over time, in our view, and forms the basis of our valuation. Today’s confirmation of carbonatite mineralisation as well as the ongoing success at Yin compounds our notation that DRE is one of the more exciting rare earth explorers in the market, with genuine exploration upside and plenty of news flow to come towards years’ end, including a maiden resource over Yin.

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