Alderan Resources’ (ASX:AL8) farm-in partner completes first holes at Frisco

• Alderan Resources’ (AL8) farm-in partner Kennecott Exploration has started the first phase of drilling at the Frisco copper-gold-silver project in Utah
• Kennecott has completed the first two diamond holes of a four-hole program testing for high-grade copper-gold mineralisation
• The program encountered a raft of difficulties including COVID-19 setbacks, drilling problems and a bushfire
• The program is now expected to run over budget and several months late
• The current program is part of a three-stage farm-in agreement, with Kennecott to spend US$30 million to earn a 70 per cent stake in Frisco
• Alderan Resources closed Wednesday’s session 6.25 per cent lower at 15 cents

Alderan Resources’ (AL8) farm-in partner Kennecott Exploration has started the first phase of drilling at the Frisco copper-gold-silver project in Utah, U.S.A.

Kennecott has completed the first two diamond holes of a four-hole program testing for high-grade copper-gold mineralisation.

Farm-in agreement

Kennecott, a subsidiary of Rio Tinto, can earn up to a 70 per cent interest in Frisco through a three-stage, US$30 million dollar (around A$41.75 million) exploration program.

The current drilling is part of the first phase to earn a 55 per cent interest with a spend of US$6 million (around A$8.35 million).

The program has had troubles since it began. The emergence of the COVID-19 pandemic delayed the start of the works, which eventually began about a month late.

Kennecott was finally able to go ahead in mid-May after adopting new protocols to protect the health and safety of staff, contractors and the local community.

The adjusted rosters, along with delays caused by unanticipated ground conditions and a bushfire, have pushed the program to extend by several months beyond the original plan.

The drilling

Drilling of the first diamond hole began on May 16 and encountered trouble almost immediately. Poor ground conditions were exacerbated by a lack of water return, which can complicate core sample retrieval and causes excess friction for the drill.

The drilling also encountered unexpected historical workings underground, which further complicated proceedings.

The disruptions caused the first hole to run over time and over budget. The hole was drilled to follow up significant historical copper, silver and gold results.

So far, assays have been returned for only the upper portion of the hole. Final results will be released when all data is available.

The second diamond hole fared a little better than the first, but still encountered troubles with water return. The hole did reach its final depth, but technical difficulties have meant the casing was lost and the hole was abandoned. Assays are yet to be returned.

The third hole is underway, testing a buried induced polarity anomaly on the Reciprocity fault, which is believed to be a significant control on mineralisation in the region.

So far no problems have been reported. Drilling is expected to conclude in August, before the rig moves to the fourth and final hole.

Next steps

Kennecott is now reviewing historical data sets to generate new targets.

So far the company has spent US$918,185 (around A$1.28 million) of the required first-phase spending. That total includes direct and indirect drilling costs, assay, staff costs, permitting, property payments and data compilation.

Given the complications encountered so far, Alderan will perhaps be counting its lucky stars it hand-balled the Frisco exploration to another company.

Alderan Resources closed Wednesday’s session 6.25 per cent lower at 15 cents.