Impact Minerals poised to live up to its name?

Perth-based exploration play Impact Minerals (ASX: IPT) is hoping to finish, what has already been a successful 2013, on a very high note.

The company’s expectations are high for a drilling program it has just commenced at its recently-acquired Mulga Tank nickel project, located 200 kilometres northeast of Kalgoorlie in Western Australia.

 

Impact is undertaking 4000 metres of drilling to test seven targets it has identified at the Mulga Tanks project.

The program, which has been part-funded by a grant from the Western Australian Government of $134,000 has been designed to test seven coincident ground electromagnetic and nickel-in-soil geochemical anomalies identified by Impact since the acquisition of the project.

The acquisition of the Mulga Tank project in March this year re-invigorated Impact Minerals during a time when it, and its contemporaries, were looking for some light to escape the dark capital funding clouds that had shrouded the ASX.

Impact struck a deal with the company’s, then 75 per cent-owned subsidiary, Invictus Gold (ASX: IVG) to acquire and divide the assets of private company Endeavour Minerals.

Impact picked up the rights to two nickel-copper-PGE joint ventures with Golden Cross Resources, the Mulga Tank project in WA and the Broken Hill project in New South Wales.

Invictus secured all the shares in Endeavour, which came with the 100 per cent-owned Commonwealth and Rangitira gold and base metal projects, also in NSW.

In order to provide the new projects with the attention they deserve, Impact and Invictus determined this would be best achieved by merging the two companies.

“The thing for us this year has been that Impact Minerals has basically reinvented itself,” Impact Minerals managing director Dr Mike Jones told The Resources Roadhouse.

“At the start of the year Impact only had grassroots projects in Botswana and Invictus only had grassroots projects in Queensland, with one small project in Turkey.

“By acquiring Endeavour Minerals we transformed both companies to such an extent that now, between the two, we have three flagship projects.

“It just made sense to bring them all together, which is why we now have the merger between Impact and Invictus happening as we speak.

“That will leave us as one company, with three flagship projects – the main one of which is Mulga Tank.”

The Mulga Tank project covers about some 425 square kilometre of the emerging mineral province of the south east Yilgarn Craton of Western Australia.

The project is definitely situated within a good neighbourhood with the province being home to Sirius Resources’ Nova nickel deposit; St George Mining’s Dragon disseminated nickel sulphide discovery; AngloGold Ashanti-Independence Group’s Tropicana gold mine; and the Mulga Rocks uranium deposit.

The Mulga Tank project comprises 13 exploration licences, six of which Impact owns 100 per cent.

Two of these licences are granted, while the other four are under application.

The company is also currently earning a 50 per cent interest in seven licences from Golden Cross Resources.

Until last week, two of these licences – E39/988 and E39/1072 – were 20 per cent and 25 per cent-owned, respectively by a third party.

Impact Minerals has now moved to a position of pending majority ownership on the two ELs for a total of $170,000 in cash.

The acquisition positions Impact to move to a 70 per cent stake in E39/988 and a 75 per cent stake in E39/1072.

“All of these projects are way more advanced than anything we previously had at the start of the year,” Jones said.

“We made the decision during the year to keep spending money and advancing them because we had a gut feeling that they were going to become key contributors to Impact being an investable story even though the market, at the time, was running against us.

“It did lead to some sleepless nights throughout May, June, and July, but now we have come out the other end with some great targets.

“Now it is a project that keeps us awake at night because we are so excited about it.”

Work completed earlier this year by Impact identified seven targets, all located on E39/988, of strong, large and undrilled electromagnetic (EM) conductors, which it believes supports the project’s potential to host large, massive nickel sulphide deposits similar to the Perseverance and Rocky’s reward deposits.

 

 
The conductors were identified by a ground EM survey and are understood to be variably coincident with strong nickel, cobalt, copper and palladium soil geochemistry responses.

The cluster of conductors have strike lengths of up to 800 metres and commence at depths of between 100m and 350m below surface.

The conductors occur close to the base of the Mulga Tank dunite, which the company has interpreted from previous drill holes and magnetic data to be possible zones of massive nickel sulphide mineralisation that have accumulated at, or close to, the base of the dunite.

“The EM survey surpassed all our expectations by identifying the seven anomalies,” Jones said

“At least half of the results displayed very high conductivity, which is very suggestive of a massive sulphide source.

“It is common to get black shales in such environments and we almost certainly have EM responses from black shales, however we have removed them from our interpretations.

“What we are left with are the short-strike length anomalies, which are the most likely to be massive sulphides. There is an almost unbelievable correlation with the soil sampling.

“In all of my career, I have never seen anything quite like it – that seven geochemical anomalies all underlie the peaks of the soil geochemistry.”

 

Impact is well-funded having completed a $3 million capital raising through a placement of some 79 million shares at an issue price of 3.8 cents per share, to sophisticated and professional investors.

Funds raised will be used to advance Mulga Tank as well as the Broken Hill copper-platinum project and, post the merger with Invictus Gold, the Commonwealth copper gold-silver-base metal project.

“We completed the raising at a price that was just short of our high for the year, whereas everyone else, who had shut up shop for the year, are now doing raisings at prices close to their lows for the year,” Jones said.

“It’s because we took a brave decision to do some deals earlier this year and push forward with the development of the projects we have.

“We are explorers by trade and we could have continued to spend money on the grassroots projects we have.

“They are, in their own rights very good projects and we haven’t lost faith in them, we still have them on the books and are trimming them down to core areas – but in terms of the value for the dollars we spend we consider it is much better if we spend them on the new projects.”

Impact Minerals Limited (ASX: IPT)
…The Short Story

HEAD OFFICE
309 Newcastle Street
Northbridge WA 6003

Ph: +61 8 6454 6666   
Fax: +61 8 6454 6667

Email: info@impactminerals.com.au
Web: www.impactminerals.com.au

DIRECTORS and MANAGEMENT
Peter Unsworth, Dr Mike Jones, Paul Ingram, Dr Markus Elsasser

SHARES ON ISSUE
420 million

MARKET CAPITALISATION
$24.8 MILLION (AT 6/11/13)