Mineral footprints may point to more zinc under McArthur Basin

CSIRO geologists have found ‘mineral footprints’ pointing to potential high grade zinc mineralisation deep under the existing McArthur River deposit.

The researchers’ drill cores reportedly demonstrate that the geology around the McArthur River zinc mine is replicated in the older rocks underneath.

“It’s evidence that similar geological processes that led to the McArthur River deposit also happened hundreds of millions of years earlier, before the rocks at McArthur River were deposited on top,” the CSIRO state.

The discovery is being used by explorer – and study collaborator – Armour Energy as impetus to carry out further drilling at the site.

While the current low zinc price, a major shortfall is expected in the near term.

“Despite the fall in bulk commodity prices overall, shortfalls in zinc supply have meant that demand for the metal remains strong. New zinc discoveries are needed to fill the supply hole and would provide a welcome productivity boost to Australia’s mining and minerals industry,” CSIRO said.

Major zinc miners have also already begun preparing for this upcoming trend, with Glencore suspending operations at Lady Loretta and reducing output at Macarthur River and George Fisher to further drive future demand.

"Glencore believes that current prices do not correctly value the scarcity of our zinc resources; our finite resources are valuable and reducing production, in response to current prices, preserves value," it said in a company statement at the time.

According to a source close to the company, it believes it is more valuable to reduce production and keep the asset in the ground until prices rise, and sees the lack of a strong zinc pipeline ahead as a welcoming omen for potentially raising output in the future.

Australia's largest open pit zinc operation, MMG's Century mine, ended mining earlier this month, although the company is still forging ahead with its plans at its $1.4 billion Dugald River underground zinc mine.

Glencore's latest decision immediately reduced zinc production by around a third, and reduced its 2015 fourth quarter production by around 100,000 tonnes.

CSIRO and Armour’s research is focusing on under-explored areas, and areas with surface cover to help boost the next wave of discoveries.

“We used state-of-the-art x-ray techniques at our Advanced Resources Characterisation Facility to better understand the mineralogy of the rock and then combined this information with geochemical models that show how it formed,” CSIRO’s lead study author, Dr Sam Spinks, said
“We haven’t found a deposit yet, but the high zinc concentrations and metal haloes in these rocks are what geologists regard as ‘distal footprints’ to potential metal mineralisation.”

“This work will lead to more targeted exploration drilling, helping companies save costs while reducing their environmental impact,” Spinks said.

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