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Tuesday, March 14, 2017

Tethyan Resources

Serbia hasn't been this popular since 1999. We've lusted over the intercepts that Reservoir had been reported prior to their takeover by Nevsun, and so many junior companies are heading there to hope that there are other world-class deposits to be found while enjoying a glass of Italian Riesling.

you want to be in the turquoise and moldy lemon colored areas.
We can see that there are a lot of deposits, and mineralization types, but only a few would you class as being any good.
  • Bor - 2.1Gt @ 0.64% Cu and 0.24 g/t Au
  • Majdanpek - 1Gt @ 0.6% Cu and 0.35 g/t Au
  • Chelopech - 60mt @ 1.2% Cu and 2.4 g/t Au
  • Timok - 1.7Mt @ 13.5 % Cu, 10.4 g/t Au and 35Mt @ 2.9% Cu, 1.7 g/t Au
The rest are decidedly average, but it is important to note that ALL the best deposits are found in the early morning-urine colored belt in the NE of the map (where the world Bulgaria is located)

This isn't where Tethyan have their projects. Gkcanica and Suva Ruda are found in the orange Vardar Zone that hosts some medium-sized low grade Cu-Au deposits, like:
  • Tulare - 523Mt @ 0.24% Cu and 0.23 g/t Au
  • Lece - 3.3Mt @ 3.7 g/t Au, 3.3% Zn, 1.5% Pb and 20 g/t Au.
This doesn't mean that there isn't a large deposit lurking somewhere in this belt, but does indicate that:

It ain't elephant country, mate

Summary

  • Small low grade porphyry Cu-Au deposit drilled at Rudnitza with 
  • Narrow zone of supergene enrichment
  • Mineral belt isn't well-endowed
Nothing here screams "major discovery", some average exploration holes, and it will be interesting to see what Tethyan do next. Will they stay-married to the project - keep spending more and more money on it as they have nowhere else to go, or start to do some regional exploration to see if they can find something better?

Geology

I am interested to see the relationship between the recent drilling and the drilling conducted by Phelps Dodge in 2004, especially holes PDRC-04-03 and 04. I'm going to guess that this drilling was designed to confirm the grades seen in those holes (does this old data exist?) and to see if mineralization continues to depth. Here are the new results:

Reasonable for initial drilling
A cursory glance at the data shows that for an early stage project, this is the first drilling, they hit some interesting grades, particularly gold (some consistent, sub-economic grades on its own) with a narrow zone of high-grade copper zone relatively close to surface.

However, if you take a bit of time and look at the maps and sections on the webpage (link), you can quickly see that 3 of the 4 holes have drilled the same rock from 3 different directions, and a single hole (002) has explored for the continuation of mineralization 100m along strike, where we can see the grades drop-off considerably (3D model here - link)

Left = gold, right = copper

Here is an annotated section, and you can see that all Tethyan have is a small, poorly mineralized porphyry deposit.The small high-grade supergene zone looks interesting, but is small and restricted to the porphyry. The main body is too low grade to really warrant further work, and the 'deeper' zone, is too deep and low grade to really be of interest.


I guess they were trying to 'better understand' the mineralization, but it is frustrating that a company that has spent all that time and money on permits, building  access roads and drill-pads that they didn't do something a bit more dynamic. Why drill the same rocks from three different directions?

Let's be reasonable, we are talking about a junior exploration company, funds are tight, they had a well mineralized hole (visually) in hole 001. They did a step out (hole 002) 100m away, and it didn;t get much. So, I assume they panicked, played it safe, and went back to poking around hole 001 to make that they hit something. It keeps the risk low, but also minimizes upside.

Without having some regional geophysics maps or regional geochem it is hard to gauge the potential outside the Rudnitza porphyry. Normally companies drill the best target first. so if that is the case, they may want to spread their wings and see if they can find something better elsewhere.

So, imagine that you have just finished hole 002, it was bad, and you are thinking "what the feck do I do now"? 

What would a weaselly geologist do?

Here is my alter-ego, FAG (the Fraudulent Angry Geologist), and ask him - what BS can be spun from this project?

We have to assume that the FAG has 1/4 a brain-cell and is evolved from stoats


Remember - if you are investing in Junior Mining stocks, you are the Rabbit!

You saw that there was some good stuff in hole 001, not much in 002, so let us re-imagine the drilling, taking the ~1200m that was drilled in holes 003 and 004 and see what we can do!

We know that the deeper mineralization is low grade, so why not focus on the near surface supergene zone, this can be drilled with a few 150-200m long drill-holes.
proposed holes in red - >0.5% grade shell in yellow
Plan view
That would have allowed you to release lots of press releases with 30-40m @ >1% Cu and >0.3 g/t Au. Imagine those CuEq and AuEq PR headlines, that would suck investors in.

Even better, if all 6 proposed holes hit the high-grade supergene zone you could do a nice BS resource report to define a small (200m x 200m x 30m) resource (3.25Mt @ 1% Cu or 70 million lbs of copper), and start promoting the heap leach potential. the opportunities are endless!

Tethyan, you missed a trick there!