Broad, thick mineralised carbonatite confirmed at C3

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

The C3 carbonatite returns very thick intercepts: Dreadnought Resources (DRE:ASX) has received the remaining assays from 66 (of 89) wide-spaced, first-pass drill holes initially completed over the C1-C5 carbonatite targets within the Mangaroon Project (Gascoyne Region, WA). The first 23 holes of this program were released in January, when DRE discovered mineralised carbonatites at C3.

During the initial reconnaissance program, DRE also drilled 7 closer spaced holes (of a planned 23) to immediately follow up the initial success at C3. Five of these seven holes are presented as headliners in today’s results, given their large thickness, good grade and the fact that many holes end in mineralisation. This first pass drilling (a further 170 holes still to be drilled) has recommenced over the C1-C5 target areas and will also expand to the untested C6.

Drilling is expected to run through to August 2023:

  • 195m @ 0.57% TREO from 6m (incl. 24m @ 1.26% TREO (22% NdPr:TREO), 4.4% P2O5, 0.24% Nb2O5, 4.4% TiO2 and 100ppm Sc) at C3
  • 128m @ 0.74% TREO from 8m, (incl. 34m @ 1.31% TREO (21% NdPr:TREO), 4.4% P2O5, 0.16% Nb2O5, 4.4% TiO2 and 80ppm Sc) and 12m @ 1.09% TREO (20% NdPr:TREO), 2.5% P2O5, 1.1% TiO2 and 58ppm Sc) at C3
  • 195m @ 0.55% TREO from 6m (incl. 33m @ 1.10% TREO (21% NdPr:TREO), 3.7 P2O5, 0.17% Nb2O5, 5.5% TiO2 and 82ppm Sc) at C3
  • We also outline the early stage result from C4: 44m @ 1% TREO from 13m (22% NdPr:TREO).

Significant niobium mineralisation: We highlight the 15m @ 1.16% Nb2O5 in hole CBRC085, and 30m@ 0.97% Nb2O5 in hole CBRC086 as being highly significant niobium intercepts and of great interest. Niobium, used traditionally as a hardener in steal and more recently in EV batteries, is rare with ~90% of the 79kt global production (2022) sourced from a handful of mines in Brazil. The Araxá apatite-niobium deposit is a world leader with a resource said to be in excess of 450Mt @ 2.5% Nb2O5.

Keeping to a plan: We note that carbonatite intrusions are known globally to host several commodities including rare earths, niobium, titanium, phosphate and scandium often as different mineralised bodies within the same intrusion, so DRE will continue to follow up and expand on initial drilling in an attempt to uncover a high-grade core as seen at Mt Weld and Mountain Pass. We highlight that Mountain Pass also has a relatively small footprint of 700m x 150m versus the 600m x 550m zone now uncovered by DRE at C3.

Excitement mounting for the C6 target: As well as infill drilling at C3, completion of first pass drill at C2, C4, C5 & C7 and further work on the regional ironstone prospects, DRE will also test the compelling 900m x 600m magnetic feature that defines the outcropping portion of the C6 target, which DRE interprets to be a potential conduit for carbonatite intrusions. Like most of the carbonatite targets at Mangaroon, C6 is also under shallow cover, so it may take a number of attempts to snag mineralisation.

Three rigs active across Mangaroon chasing REEs: DRE has an RC rig drilling ironstones around Yin, a second RC rig is undertaking first-pass carbonatite drilling as mentioned above, and a diamond drill rig has commenced metallurgical and QAQC drilling at the Yin resource and the C3-C4 carbonatites.

Valuation and recommendation: Our valuation remains underpinned by an EV/Resource multiple centring around a 60Mt @ 1% TREO ironstone resource defined at Mangaroon. We justify this given DRE has already defined 14Mt of resource and has a further 50-100Mt defined in a JORC exploration target on ironstone targets alone. Further upside remains if carbonatite targets such as C3 can convert to mineable resources. We also model a takeover scenario given the strategic nature of the project.

We maintain our SPECULATIVE BUY recommendation and price target of $0.24.

Read the full report here.