The expanding $9 billion global silica sands market is undoubtedly paving way to the Australian high-purity silica sands opportunity. Centered at tapping this lucrative opportunity, Perpetual Resources Limited (ASX:PEC) has been garnering market interest for possessing four discrete Project areas that are prospective for high purity silica & construction sand products, located proximal to established infrastructure.
Further enhancing its potential for product offering targeted at both domestic and international customers, PEC recently reported that it has entered into an Option Agreement to acquire Sargon North, which lies directly to the north of the Company’s existing Sargon Project that has demonstrated strong potential for construction sand.
Let us deep dive-
Details of PEC’s Option Over Sargon North
The Company has acquired an option over Exploration Licence Application 70/5376, the Sargon North area of the Sargon Project tenement. Demonstrating strong exploration and operating synergies, the region sits directly south of four producing construction sand mines and is 40 km via road to the Port of Geraldton.
The Option Agreement was acquired via $500 payment fee, while $11.5k reimbursement of prior expenditure will mark the final tenement acquisition.
Kitara Investment Pty Ltd, Peter Gianni and Robert Jewson are the associated vendors to the option who will retain a 1% gross revenue royalty for all minerals extracted, produced and sold from the Projects.
Casting Eye on the Sargon North
Leveraging from a strategic location within an area well recognised as a source of construction sand materials, the Sargon North has strong potential for construction sand. Satellite imagery makes surface expressions of yellow-orange sands evident over the region.
Previous extensive drilling was undertaken by Iluka Resources Ltd (ASX:ILU) which described delineated intervals from surface up to 39m deep of yellow orange sand units across a strike length of 5.4km, hence cementing the potential of construction sands.
At the back of an advantageous location, existing infrastructure access and potential scale defined by the previous drilling, the Sargon Project (incorporating the Sargon North tenure), is uniquely positioned to capitalise from the increased demand of raw building materials in the post-COVID scenario.
The Sargon Project
Lying within the Pliocence-Age marine feature of the Eneabba Scarp, the area underlain by the Project formed a promontory during the Pliocene marine high strand. Noticeably, ferruginous Jurassic Bedrock outcrops exist at the top of the scarp, and the lower slopes are covered by a complex of overlapping colluvial units. The Tamala Limestone is present at the foot of the scarp that extends to the west as a sheet of cemented Pleistocene sand dunes.
Coming to the drilling history at Sargon, Iluka targeted an embayment on the Eneabba Scarp on the northern side of Mount Hill promontory. And across the private property, it completed 55 vertical air core drill holes for 1,853m across three traverses. Geological logging indicated extensive near surface intersections of yellow-orange sand.
PEC interprets that this was not the geology targeted by Iluka and deems it to be prospective for construction sands. The yellow-orange sands extend for a strike length of more than 5,400m, across a width of 2,800m and range in thickness from 1m to 39m (averaging 12.5m).
Sargon Project Outlook
The Company anticipates the conversion of the Sargon North option to occur within six months.
Managing Director Mr Rob Benussi believes that the acquisition of the prospective area affords a high degree of operational synergy and the Company is likely to begin exploration activities at the Sargon exploration hub.
Currently, the modelling of the sand units in conjunction with satellite imagery interpretation remains underway. This is likely to aid with defining the scale of the Project and allow for the initiation of the exploration planning.
Beharra Project Update
PEC has been proceeding with developments at its flagship asset - the Beharra Project which comprises of a single exploration licence E70/5221 and covers an effective land area of 56.8km2. Auger drilling at Beharra has affirmed the existence of extensive, high purity silica sands. Moreover, Air core resource definition drilling has been concluded.
Samples from the Air core drilling have been submitted for analysis, and results are pending, as per the Company’s latest update.
To read about the Air core drilling at Beharra, CLICK HERE- Perpetual Resources Completes Air Core Drilling; Undertakes Successful Capital Raising to Fund Future Growth
PEC stock last traded at $0.028 on 29 April 2020.