LKY identifies copper targets across ~50km trend

Our Investment Locksley Resources (ASX: LKY) just put out an overview of its two copper projects in NSW.

We originally came into LKY for its US critical minerals assets BUT with copper trading where it is today we think LKY’s copper projects could end up becoming a big part of the company’s story over the next few years.

Mainly because, LKY already has a copper resource across its copper assets:

• A JORC 2012 resource of 9.86 Mt @ 0.73% copper and 0.22 g/t gold at its Tottenham project, AND, 
• A JORC 2004 resource of 1.3 Mt @ 1.0% copper and 0.6 g/t gold at the newly acquired Iron Duke project.

Together that’s 11.2Mt with ~85kt of contained copper at ~0.7-1% of copper…

Despite that LKY is trading at an Enterprise Value under $5M… (Market cap of ~$19M, cash of ~$14.9M).

(source)

And that’s before the assets have seen any major modern drilling programs.

Today, LKY confirmed a review of the two projects had identified a more than 50 km of prospective trends across the district - here they are:

(source)

And here is a much nicer image LKY had in today’s announcement - showing the integration of all the existing data (geophysics, geochemistry, 3D models etc) over the project:

(source)

Now, LKY says it will use those targets as the basis for its two staged exploration plan across the district:

• Phase one = Focus on expanding the Mineral Resource base across the district (drilling out the targets identified), AND
• Phase two = Progressing the projects through permitting and feasibility studies looking at potential development options for the project.

As mentioned earlier, the two projects have resources already (JORC 2004 and 2012 compliant).

Next we want to see LKY update those into today’s standards and then start drilling to expand the resources across the two project areas.

Copper is looking strong too

Copper might have finally woken up to all of the talk about the demand/supply dynamic that has been going on for more than a few years now.

It has had a consistent rise for more than 12 months now:

(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

So it appears to be a good time to be exploring for copper (especially when LKY has been able to pivot to something it already had), and this is a project that there are already results to go on with.

Also on the copper macro, it feels like most weeks that there’s talks of supply issues from Chile through either weather, missing production guidance or other factors including protests:

(source)

What’s next for LKY?

LKY’s copper plan has two parts. First, grow the resource. Second, to make each tonne worth more by working on grade confidence level, metallurgy and to progress a route to processing.

Here’s what we want to see next:

🔄 A new resource estimate across Tottenham and Iron Duke

LKY has 2 projects located nearby here, with a JORC 2012 resource at Tottenham: 9.86Mt @ 0.73% copper and 0.22g/t gold (from Apr 2022) and then Iron Duke was acquired in May, with a historical JORC 2004 resource of 1.3Mt @ 1.0% copper and 0.6g/t gold.

So we want to see the resources combined to a current standard

1. 🔄 Independent resource estimate underway to combine both projects into one up to date figure
2. 🔲 Updated resource released

🔲 Drilling to progress the projects

This is been planned in the background so we should see some progress showing on this in coming weeks:

1. 🔄 Ranking targets, plus approvals, access and contractors
2. 🔲 Drilling schedule, which LKY says is coming “in the coming weeks”
3. 🔲 Drilling at Iron Duke. The resource covers only a ~550m area, and the 6km of prospective strike hasn’t been tested
4. 🔲 Drilling extensions at Carolina (the highest grade part of the resource, open down plunge and to the north) and at Mount Royal/Orange Plains (most of the resource’s metal)
5. 🔲 Testing regional targets: Bogan River, Effies Ace, Christmas Gift and Underlay/Ace/Railway Forest