MNN Awards: Stavely's perseverance pays off

IT may have taken until the fiftieth hole to claim a discovery, but Chris Cairns’ Stavely Minerals faith in the potential of the Thursday’s Gossan project in Victoria over many years was unwavering.
MNN Awards: Stavely's perseverance pays off MNN Awards: Stavely's perseverance pays off MNN Awards: Stavely's perseverance pays off MNN Awards: Stavely's perseverance pays off MNN Awards: Stavely's perseverance pays off

Drilling at Stavely Minerals' Thursday's Gossan project in Victoria

Stavely floated in 2014 - the only resources float of that year - with the Stavely project in Victoria as its flagship.

Cairns, Stavely's founder and executive chairman, acknowledged the support of the board in acquiring the assets privately in 2013.

"To highlight how foolhardy an endeavour that was, we had acquired a belt of rocks with no previous mining history, in a state that was ranked by the Fraser Institute as 66th out of 122 jurisdictions for investment attractiveness - below beacons of jurisprudence such as Panama and one place above Liberia!" he said earlier this year.

The Thursday's Gossan deposit at Stavely had an existing resource of 28 million tonnes at 0.4% copper for 110,000t of contained copper, but the company had a belief when it acquired the project in 2013 that it could be comparable to Newcrest Mining's massive Cadia deposit in New South Wales.

Stavely spent the next few years trying to prove its theory and got "sniffs" in the form of porphyry indicators, but not quite the eureka moment needed to spark excitement in the market.

That made it difficult for a company of Stavely's size, given it cost about A$750,000 to drill a deep hole.

The company took the plunge and drilled a deep hole early last year, which resulted in a technical breakthrough given bornite was intersected for the first time.

A review of drill core, assay results and technical data last year, in conjunction with consultants Dr Greg Corbett, Dr Scott Halley and Dr Paul Ashley, improved the understanding of setting of the mineralisation.

Importantly, the review highlighted similarities between Thursday's Gossan and the Butte and Magma copper deposits in the US.

The realisation prompted Stavely to test for high-grade lode-hosted mineralisation.

Cairns said it was then that the "penny dropped".

On September 26, 2019, Stavely reported the results for the first diamond hole targeting the Ultramafic Contact Fault at its Thursday's Gossan.

The hole returned 32m at 5.88% copper, 1 gram per tonne gold and 58gpt silver from 62m, including 12m at 14.3% copper, 2.26gpt gold and 145gpt silver, including 2m at 40% copper, 3gpt gold and 517gpt silver.

The spectacular hit put a rocket under Stavely's share price, sending it up by 180% that first day to an all-time high of 68c.

The discovery hole was hole 50.

"Hole 49 [which took seven weeks to drill at a cost of more than $700,000] was spectacularly unsuccessful!" Cairns said last month.

The success saw Stavely's share price rise as high as $1.42 by the end of October and allowed it to raise money to continue the hunt.

The new exploration model also expanded Stavely's search space.

"It's not a porphyry per se," Cairns said.

"It's a new style of mineralisation - it's never been seen in Australia before."

Earlier this year, Stavely won the Craig Oliver Award at the RIU Explorers Conference in Fremantle, beating out other nominees Image Resources, Alkane Resources, Bellevue Gold and Gold Road Resources.

Cairns announced that day that the Ultramafic Contact Fault had been renamed as the Cayley Lode, after Geological Survey of Victoria senior geologist Ross Cayley.

While some of the heat has come out of Stavely's share price since the initial frenzy - the stock is back at around 60c - the company has continued to report strong results.

In mid-June, the company reported a hit of 87m grading 1.74% copper, 0.57 grams per tonne gold and 20gpt silver from 140m in hole 85, 100m from the discovery hole.

"It's quite a substantial hit," Cairns said.

"It really is quite special.

"It's a stick of core a geologist could fall in love with."

The Cayley Lode is currently considered to have a strike extent of 1.5km and is open along strike and at depth.

"We've been surprised by the consistency and coherency of the mineralisation along strike," Cairns said.

The company has three rigs on site and has about $10 million cash.

A maiden resource for the shallower portions of the Cayley Lode is targeted for the current half.

Recently acquired seismic data is being assessed to help target future deeper drilling of a potentially fertile porphyry at depth.

"Later this year we're going to have a stab at the deep porphyry with a couple of holes," Cairns said.

"We'll have a big swing at that towards the end of the year."

Cairns estimates Stavely will be drilling for at least the next 18 months.

"It looks like a bloody big system," he said.

Stavely Minerals is a nominee for Explorer of the Year for the Cayley Lode discovery in the 2020 MNN Awards.