The Kroussou Project
Trek Metals Limited (“TKM” or “Company”) is pleased to announce that it has entered into an option agreement with Battery Minerals Limited (ASX:BAT) to farm into the highly prospective Kroussou Zinc-Lead Project in Gabon (Figure 1). Intermittent historic exploration, conducted from 1962 to 1980, identified significant near-surface base metal mineralisation with drill testing limited to a small portion of the target areas.
BAT has decided to divest the asset in order to remain focussed on developing their Mozambique graphite assets.
About the Kroussou Project
Zinc and lead mineralisation is hosted in Cretaceous sediments on the margin of the Cotier (Coastal) Basin within preserved channels and onlapping unconformable Archaean and Paleoproterozic basement rocks (Figures 2, 3 and 4). Base metal occurrences are mapped along the length of the Kroussou Project License (84km strike for ~1,500km2 of tenure). Only a limited number (2 of 18) of the exposed channels were drill tested by the Bureau de Recherches Géologiques et Minières (BRGM) historically, with both channels containing significant base metal mineralisation. TKM believes there is scope for the discovery of further base metal accumulations within the remaining untested 16 channels and also further potential westward within the broader Cotier Basin.
The Dikaki Prospect (Figures 2, 3 and 5), the area with the most historic drilling (small diameter diamond core) returned numerous shallow intersections of ore grade and width zinc plus lead mineralisation. Some of the better intersections reported included 2.3m @ 21.2% Zn+Pb from 0.9m, 8.3m @ 7.8% Zn+Pb from 13.6m and 7.0m @ 8.2% from 9.4m (Figure 5). These holes were drilled by the BRGM in 1979-1980.
Assaying of core by the BRGM was highly selective due to the high cost of analysis and transport back to France at the time. Only obviously mineralised (clearly visible galena – lead sulphide) core was sent for analysis, limiting defined and quantified mineralisation to these intersections. Sphalerite (zinc sulphide) is not always easy to identify in hand specimen and zinc rich core may not have been sent for assay. Further, BRGM limited their drill program to shallow holes (average depth of 16m) with numerous holes ending in mineralisation.
The BRGM drill holes confirm multiple horizons of flat lying mineralisation. Numerous intersections of massive sulphide were reported in drill logs adding to the potential for significant zinc and lead mineralisation at the Kroussou project. The style of mineralisation is likely Mississippi Valley Type, however some Sedex Type characteristics are also observed. Petrology undertaken by BAT indicates relatively equal proportions of zinc and lead minerals and the sphalerite appears to have low iron content, making it more attractive for beneficiation.
BAT has identified eighteen channels that offer very shallow, near surface targets close to the Archaean and Paleoproterozoic basement rocks. A recent field visit by TKM, identified significant zinc and lead mineralisation within modern drainage systems outcropping within the historically drilled channels. BAT previously announced confirmation of high grade rock chips at the Dikaki and Kroussou Prospects with results returning grades as high as 9.7% zinc and 33.1% lead (see ASX announcement by BAT from 7th of April 2015).
Access to Infrastructure
Access into the Kroussou project area has been greatly enhanced in recent times by the presence of several logging companies operating in the area. New, high quality roads and tracks have been established that allow for easy passage into the project from the bitumen highway that runs south from the capital city of Libreville.
A river port at Yeno (Figure 1), approximately 65km, by vehicle, to the west of the project area along a good quality road, is used by the timber and the oil industries to barge equipment and product to Gabon’s main commercial shipping base at Port Gentil. This barge system presents an ideal, relatively cheap logistical solution for operations within the project to and from the main export facilities at Port Gentil.
Key Deal Terms
- Drill Option – TKM to fund an initial drilling programme at Kroussou up to US$250,000.
- Should TKM elect to exercise this option (prior to 31st July 2017), TKM will pay BAT US$240,000 in cash and/or shares as a reimbursement of costs and to secure the right to earn 30% of the Kroussou Project through the expenditure of US$1M within 12 months of the exercise date.
- TKM can then earn a further 40% of the Project through the expenditure of US$3M in the subsequent 24 months.
- TKM will then have earnt 70% of the Kroussou Project and agrees to free carry BAT through to the completion of a PFS (Pre-Feasibility Study, as defined in JORC 2012). At that point BAT will have the option to contribute to the delivery of a DFS (Definitive Feasibility Study as defined in JORC 2012) or dilute, via standard industry formulae to 5%, whereby below that, its interest will convert to a 2.5% Net Smelter Royalty (NSR). TKM will have the option to buy back 1% of this royalty through the payment of US$1M to BAT.
Planning is well underway for a programme of at least 500m of diamond drilling to be undertaken in early 2017 in order to test some of the best areas of the Dikaki channel and potentially other targets. Once permitting has been completed and access has been established into the prospect areas, drilling will commence with results expected towards the end of Q1 2017.
- Low population density and abundant energy / mineral resources have helped make Gabon one of the most prosperous countries in Sub?Saharan Africa, with the highest Human Development Indicator (HDI) and the third highest GDP per capita in the region.
- An internationally monitored investment platform which encourages direct foreign investment without any restrictions on converting or transferring funds associated with the investment.
- Specific mining investment codes which encourage investment through customs and tax incentives.
- Gabon’s commercial ties with France remain very strong but the government is actively looking to diversify its sources by courting Asian and Anglophone investors.
- The emerging Gabonese economy is based on the domestic conversion of the extracted raw materials.
- In the long term, Gabon has the vocation to become a metallurgy centre, with a dynamic fabric of SMEs exporting metal?based products to the whole sub?region and beyond.
- The Government is presently focusing on upgrading all major roads and the launch of a massive port modernisation plan that will cater for 90% of commercial traffic.
- An investment code which conforms to Central African Economic and Monetary Community (CEMAC) investment regulations giving the same rights to foreign companies operating in Gabon as to domestic firms. Businesses are protected from expropriation or nationalisation without appropriate compensation.
- Gabon is a politically stable democratic state with few instances of social instability in recent years.
- Prospective yet underexplored geology boasting excellent historical datasets.