Tri Origin explores Lachlan fold belt

To many of us, Australia seems a distant and exotic place. But for Tri Origin Exploration (TOE-V), there are many similarities between Australia and Canada which have made the country familiar, making it an easy place to conduct mineral exploration. The common language, legal system and low political risk are all advantages that enabled the company to establish a base of operations in Sydney more than a decade ago.

A bigger plus for Australia is its extensive and varied geological terrain. While both countries are leading mineral producers, Australia, unlike Canada, was not covered by sheets of ice that deposited sequences of glacially derived material upon retreat. Instead, much of Australia is covered with oxidized and weathered lateritic deposits, which can pose difficulties to explorationists.

Tri Origin’s properties are situated in New South Wales and, according to Tri Origin’s co-founder and president, Robert Valliant, have distinct advantages. Says Valliant: “Most of our ground in New South Wales does not have significant laterite cover. This makes it more amenable to modern geophysical and geochemical exploration techniques more familiar to the Canadian Shield.” Since the company’s inception, Tri Origin has focused on gold and base metal exploration properties in the Lewis Ponds, Cobar and Woodlawn mining district of the Lachlan Fold belt in New South Wales.

Eastern Australia is less well explored than the western part of the country and, according to Valliant, this is particularly true of the Lachlan Fold Belt. “While the region was active up until the early 1900s, interest shifted to the west with the discovery of the Kalgoorlie goldfields. Until the 1990s, little exploration activity occurred in the Lachlan Fold Belt and we’ve been able to go back into this belt and acquire large properties with excellent potential . . . in some cases hosting known resources.”

Tri Origin was successful early on with the delineation of a significant gold-rich base metal resource at Lewis Ponds. The 200-sq.-km property encompasses most of the historic Lewis Ponds district and is about 200 km northwest of Sydney. The resource is divided between two zones — Main and Toms — and measures 5.7 million tonnes grading 3.4% zinc, 2.0% lead and 0.19% copper, with 1.9 grams gold and 97 grams silver per tonne. But on the heels of the exploration success, metal prices weakened and development halted on the project. Tri Origin expects it will proceed once additional financing has been completed.

There is existing infrastructure at Lewis Ponds and the company is optimistic that the deposit can be mined, provided additional resources can be delineated and metal prices improve. The company has designed a diamond drilling program to define additional resources: its targets include open extensions to the resource along strike from the Main and Toms zones, defined by old abandoned workings, and other potential extensions to the resource in areas around fold repetitions indicated by prior drilling. Metallurgical testing is also part of the work program, but in order to implement the program, the company will need additional financing.

Tri Origin is also active in the Cobar district in New South Wales. Cobar is the second-largest mineral district in New South Wales, having produced metal valued at more than US$6 billion at today’s prices. The company acquired an extensive ground position comprising 4 properties totaling 880 sq. km. In addition, it acquired a proprietary database of prior exploration results from work valued at $4.5 million.

A key component to Tri Origin’s exploration strategy has been the involvement of joint-venture partners to help share the risks and costs of exploration. This is true in the Cobar mining district where Tri Origin recently signed two joint ventures with Australian companies on the Overflow and 4Ms properties.

Triako Resources can earn a 70% interest in the Overflow property at Cobar by spending A$1 million on exploration or by delineating a commercially viable resource over the next four years. Polymetals Mining Services may earn a 100% interest in an 11-sq.-km area centred on the 4M’s gold occurrence at Cobar: to do that, it must fund exploration and reach a positive production decision within 3 years.

The Overflow mine had limited, high-grade production of gold and copper until the early 1900s. To date, Triako has completed a first-stage drill program of eight holes totaling 1,844 metres in the vicinity of the Overflow mine. Some encouraging results were obtained, including a 5-metre intercept that averaged 5.10% zinc, 2.24% lead, 0.12% copper, 7.61 grams gold and 36 grams silver per tonne. Triako is about to start an additional drilling program.

Some gold mineralization has been drilled on the 4Ms property. Significant intersections from earlier drilling include 3.4 grams gold per tonne across 14 metres beginning at surface, 2 grams per tonne across 17 metres, beginning at 1 metre depth, and 2.2 grams across 10 metres, beginning at 3 metres depth. At surface, the prospect has a strike length of 350 metres and has been drilled to about 40 metres depth over most of this length; only two of the holes were drilled any deeper, to a vertical depth of 90 metres.

A second 300-metre-long zone, located 300 metres northwest of 4Ms, is defined by rock-chip samples of up to 4.48 grams gold per tonne. This zone has only seen a minor amount of very shallow drilling.

According to Valliant, over a decade of experience in Australia has given the company ample opportunity to acquire large properties in past-producing mineral districts. “We’ve been able to pick up good ground with significant past production and excellent resource potential when commodity prices have been low.”

As an excellent example of this strategy, the company acquired the Woodlawn land package — two properties totaling 285 sq. km, situated 200 km southwest of Sydney. The Woodlawn district is the third-largest base metal-producing district in New South Wales and has yielded more than $4-billion worth of ore. The properties host three former mines which had a pre- production resource of 18 million tonnes averaging 1.7% copper, 3.8% lead, 9.9% zinc, 80 grams silver and 0.4 gram gold per tonne. Additional funds are needed before Tri Origin can begin drilling to turn newly defined targets at the mines into resources.

While joint ventures have been useful in funding exploration on Tri Origin’s projects, the company is examining other methods to raise much-needed capital including the possibility of listing its 91%-owned Australian subsidiary, Tri Origin Australia, N.L. (“TOA”) on the Australian Stock Exchange. Valliant thinks this move would benefit Tri Origin’s existing shareholders because the Australian market would give a more realistic valuation of the Australian assets and there would be greater ease in financing TOA’s activities in the local market, without having an impact on the parent company’s treasury. With gold prices now on the rise and improving resource market conditions in general, easier financing is just what the junior sector needs.

–The author is a Toronto-based freelance writer on mining and investment issues.


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