South32 Ltd (ASX: S32), a company from metals and mining industries receives an update from AusQuest Limited (ASX: AQD) that the Blue Billy Zinc and Jimberlana Nickel projects were not successful enough to provide any encouraging results to justify ongoing exploration under Strategic Alliance Agreement (SAA). As a result of this, these two projects will not be continuing further with S32 in 2019.
There was a reverse circulation drilling at the Blue Billy project of drilling space ranging in between 1 to 2 km which come across a thick black mudrocks in all thirteen drill holes. The drillings could not provide any satisfactory improvement in the zinc grade based on the comparative study from its previous diamond drilling program held in November 2018.
The assay results on the main target horizon elevated the zinc value up to 5000 ppm of zinc. Further, the relative thickness of the target horizon remains constant, and there was an absence of nearby growth faults and sub-basin development which is essential for sediment hosted zinc mineralization in the region.
There were two diamond drilling holes at the Jimberlana project to test the expected mineralization target each of 716 meters within Jimberlana dyke. The drilling met with gabbroic rocks in one hole and pyroxenitic rocks in the other. The drilling was not successful to intersect the massive sulphide mineralization. Also, the DHEM surveys also failed to identify any conductors of interest which downgraded the prospect. The DHEM survey has also come to an end.
Graeme Drew who is the managing director of AusQuest Limited is a little disappointed by the results of Blue Billy Zinc and Jimberlana Nickel projects. However, he is optimistic about its ongoing drilling in other regions and particularly in Peru as the drilling results are encouraging in these areas. The company will also be undertaking new drilling opportunities under its drilling program for 2019.
The official listing of S32 on ASX is 18 May 2015 where the performance of the company was 65.31%. However, the previous one-year performance of the company is -3.45%.
For the FY2018 ending on 30 June 2018, S32 made a net profit of US$1.332 million which is attributable to the shareholders of the company. The EPS for the period was 25.8 cents. The balance sheet of the company gives a healthy appearance as it has maintained a net asset of US$10.709 million and a debt to equity ratio of 0.41. The company has a total current asset of US$4.821 million and a total current liabilities of US$1.664 million indicating that the company can efficiently manage the working capital requirements and clear short-term debts. Further, the FY2018 balance sheet reports a decrease in the accumulated losses as compared to its previous financial year results which indicate an improvement in the operating efficiency.
FY2018, reports a decrease in the cash and cash equivalent as compared to the previous fiscal year. By the end of the period, the net cash and cash equivalent available with the company is US$2.970 million.
At present, the shares of S32 is trading at a market price of A$3.290 which is 0.06 points below its previous day’s closing price with the market capitalization of A$17.02 billion and PE ratio 9.6x.
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