In 2012 Sirius Resources made headlines after discovering the Nova nickel and copper deposit in Western Australia’s Goldfields. Rumble Resources (RTR.ASX) is a small miner set to benefit from exploration upside in the Fraser Range area.
Rumble Resources Ltd (RTR.asx) is an Australian minerals exploration company with a focus on Western Australia’s promising Fraser Range. Listed on the ASX in July 2011, its primary assets consist of a portfolio of exploration licences located in the Fraser Range totalling 3,260km2. Home to Sirius Resources’ Nova deposit, the largest nickel sulphide discovery in Australia in the last 20 years, the Fraser Range has become a promising nickel region. Rumble Resources is yet to define certified mineral resources within their portfolio.
Australia possesses one third of the world’s nickel resources of which 90 per cent is contained within Western Australia. The Nickel mining industry has primarily focussed on a 500km belt stretching from Wiluna to Kambalda known as the Kalgoorlie Terrane. Not far from the Kalgoorlie Terrane, the discovery of the Nova deposit within the geological area known as Albany Fraser, was the most significant discovery in decades and has underlined the Fraser Range as a possible nickel district. In recognition of the discovery, Rumble Resources has spent the last two years accumulating several exploration assets in the district. Totalling 3,260km2, its tenement positions now represents one of the largest and most proximal to the Nova discovery amongst other exploration companies focused in the area.
Rumble’s Fraser Range projects consist of six exploration licences and five exploration licence applications, all obtained between 2013 and 2014. Rumble Resources holds 100 per cent equity in ten of eleven licences and holds 75 percent interest in the other via a joint venture with Blackham Resources Ltd. The eleven licences make up three distinct projects, Big Red Project, Thunderstorm Project and Zanthus Project. Big Red holds the largest conductor discovered in the Fraser Ranges thus far and initial drilling and investigating of EM targets have been completed. Whilst economic mineralization was not encountered, the presence of broad disseminated sulphide zones containing anomalous copper and nickel indicate the Big Red conductor to represent significant mineralized system.
Following a successful capital raising, Rumble Resources is scheduled to commence initial drilling at its Zanthus licences, 18km East of Nova. Recent engagements with Nathan Tinkler and EAS Advisors LLC has enhanced Rumble’s access to capital markets and elevated focus on its exploration activities. The value of their two year tenement accumulation period has been verified by Vale SA as the adjacent licence holder to their Big Red Tenements.
The company’s reliance on external capital and external finance will continue beyond near term projects and ongoing support cannot be assured. Initial drilling of its Big Red licenses confirmed the presence of a mineralised conductor however economic intercepts were not encountered and the identification of a commercially recoverable base metal deposit cannot be guaranteed with future exploration nor can they exist within its licences. What also needs to be considered is the changes in price of metals targeted by Rumble Resources as they can have a significant impact on the its exploration assets, value of any future discoveries and its ability to attract financing. Currently the London Metal Exchange Nickel and Copper prices are trading at six year lows and there are no guarantees against future declines.
Whilst the Fraser Range Projects have yet to identify certified resources, Rumble Resources’ exploration program is currently being headed by Terry Topping and is focused on the identification of commercial extractable nickel resources. The exploration strategy utilised intelligence gained from the Nova discovery and from work by previous ‘Big Red’ licence holder, Teck Australia Ltd. Previous drill holes conducted by Teck Australia in 2010 indicated underlying bedrock similar in age and characteristics to those in the Nova deposit. To date, ground EM surveys by Rumble Resources have identified several targets within the Zanthus and Big Red Licences and as with the Nova discovery, Rumble Resource is focussing on the identification and drilling of EM targets that hold the potential for mineralised sulphide deposits.
Through the imminent commencement of initial drilling at multiple EM conductors at the Zanthus licences and a second round of drilling at the Big Red licences, Rumble continues its search for a ‘NOVA’ like discovery.
|Tim Morris is Head Analyst at Wise-owl
Tim has conducted over 500 corporate valuations and appraisals, specialising in pre revenue assets and emerging markets.
Tim is Wise-owls specialist in equity analysis for Australian small and mid-cap companies across a diversified range of industries including resources, technology and financial services. Tim’s Equity Capital Market insights have been featured as part of a weekly column in The Australian, and regularly features on Sky News, CNBC, ABC, and Bloomberg TV.