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Wednesday, March 21, 2018

Asiamet - Beutong

Asiamet have released a flurry of press releases this month, they've raised money (link) and recommenced drilling on the Beutong porphyry Cu-Au deposit (link).

It contains a decent amount of metal:


Or a global resource of 511Mt @ 0.48% Cu and 0.13 g/t Au or 0.56% CuEq.

If we plot them on the USGS chart of doom, we can see if Beutong is good enough to tickle the hairy balls of a major mining company?

Note: the log scale to the axes
Nope, at the moment it is nothing more than a friendly caress and a slight squeeze.

So what do Asiamet need to do to get it into the top right corner of the chart - the Acquisition Zone? To grab a major by the short and curlies, they'll need to:
  • Double the resource but keep it at the same grade - 1Bt @ 0.56% CuEq
  • Increase the grade, but keep the tonnage the same - ~500Mt @ 0.6% CuEq
To do this, they need to drill, but are there any obvious area where they can start?

I compiled the summary drill-hole data for Beutong - leapfrog model is here - link). Resources have been defined in 3 main areas.



East Porphyry

If we look at a plan map, we can see that the best intercepts all of the >0.5% Cu have come from the small (350m x 150m) quartz-stockwork. There is minor mineralization (<0.3% CuEq) in the host sedimentary units (grey). To the east sits an unmineralized (post-mineral) breccia. There is a small high-grade core, but this has been closed off (i.e. drilling has defined it limits with no obvious areas for expansion).

red line = surface outline of the stockwork zone
Looking at a section through the East Porphyry, we can see the stockwork is narrow (200-300m wide) but a few drill-holes (e.g. hole BEU0800D01 - 293m @ 0.6% Cu and 0.11 g/t Au starting at ~450m depth) have intersected >0.5% Cu mineralization to ~700m depths.


The skarn zone sits to the north - left
This deep continuation of mineralization hasn't been fully explored and with some targeted, long drill-holes will add some tonnage to the East Porphyry resources.



The question is, will anyone care that most of the potentially resources will be at >400m depth and probably beyond the limits for an open pit mine, and too small and low grade for a block cave?

West Porphyry

There has been much less drilling on the Western Porphyry zone, but the results are generally poorer than at the East Porphyry. Some 'round the world' drilling (holes going in every compass direction) have moderate intervals of generally low grade (>0.5% Cu and minor Au).

Green circles - areas where drilling has intersected >0.5% Cu
However, there are a couple of areas where drilling hit some moderate zones of >0.5% Cu that need follow-up drilling to see if they are part of something more substantial or just some lucky hits.




Skarn

A small skarn zone is found just north of the East Porphyry. Its given some great hits - e.g. BC007-01 - 48m @ 1.63% Cu and 0.88\ g/t Au.

getting worse with depth

However, it look like we have some supergene enrichment (link - a very complicated presentation , but slide 20 is a good). With higher Cu grades close to surface and grades decreasing with depth.






Summary

Even tough there are some areas where the current resources can be added to, I don't think that there is enough in the current resource areas to make the project enticing enough for a major.

For me, I believe that Asiamet need to find something new. We know that porphyries tend to occur in clusters, and, if they have not already done so, a decent portion of the 2018 exploration budget should be used for regional exploration to find some new targets.

21 comments:

  1. Good analysis! Using Taylor's Rule and assuming the M&I resource is all mineable (doubtful) this deposit could support 5Mtpa. Production (at 85% Cu rec) would be around 25ktpa of copper in concentrate. A bit small to attract anyone in my view. Needs to be around 40ktpa to attract a buyer. More importantly, it's in Indonesia, which elevates the investment risk to an uncomfortable level. It's also next to an area that forbids open pit mines, although mining is allowed at the location of the mineralization.

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    1. Hello Bill,

      The other issue is that the M&I mineralization is small, and no-one would want to invest decent amounts of capital for a mine with only a few year mine life.

      If the data had been a bit easier to extract (they had overlapping summary intervals), I would have been looking to see if the >0.5% Cu was restricted to narrower intrusives or like Cotabambas (Panoro in Peru) cut by post mineral dykes.

      I onlyfocused on the geology as I've never worked in Indo, I'm not up to speed on the political climate regarding mine development.

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  2. The resources are mainly supergene, secondary copper sulfides, not primary porphyry mineralization. They compare to Wafi-Golpu but that is primary and will be processed through a plant, not some crazy heap leach in the middle of a jungle.

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    1. Secondary copper sulphides are recoverable with flotation.

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    2. They want to heap leach these secondary sulfides to avoid the CAPEX.

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    3. Yes, it can be done but it's much slower to leach copper sulphides and there are risks that the bacteria won't thrive to make the leach happen. Then there are the regular leach risk issues, like clay....or too much precipitation.

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    4. Accurately modelling the ore mineral zonation will be key, that transition between oxide, supergene and hypogene will be important.

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    5. However reading the technical report they don;t mention any supergene mineralization, just overprinting HS on to Py-Cpy mineralized porphyry.

      However, figure 23 in the 2014 PEA (I missed this one), seems to indicate that they have moderate-strong clay in the upper part of the Eastern porphyry - It will be interesting to see what impact this would have on leaching as swelling clay could prevent percolation of fluids into the material on the leach pads.

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    6. And a final comment - they've only done float testing - that means that they are only looking at sulfide ores

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    7. From the March 1, 2018 press release: "Metallurgical test-work will assess the potential for developing a large-scale heap leach SX-EW mining operation to produce copper cathode at Beutong."

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    8. Lets see what the test-work tells us. One observation, from the photo from the BEP core with the covellite mineralization, is that it looks to be disseminated (probably replacing pyrite), rather than in veins/fractures. What impact will that have on grind sizes to get decent exposure of the covellite to the acid solutions?

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    9. I didn't see anything in the tech report to indicate they were looking at leaching. The met tech section (P69) discusses flotation tests done at 120 micron grind with good (89%) recovery. Rougher con grade of 23% seems low for covellite. The regrind was done at 40 micron (reasonable) and 20 micron (very fine) but no final concentrate grade was mentioned.

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    10. I wonder why no final concentrate grade was mentioned? Hint: grind size below 50µm tends to be too fine for froth flotation to work. That's not the only reason they would be looking at leaching; Indonesia wants the final processing to occur on site so exporting copper concentrates isn't a great idea, if you have been following the news during the past few years.

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    11. Most regrind P80's are below 50 micron. The point about final processing is a good one and is one of the significant risk issues in Indo.

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    12. Pyrite is probably high and copper is likely being lost to cleaner tailings after the regrind (really small particles don't float, we're talking under 10µm, also perhaps copper is binding to activated pyrite that gets depressed). Next step in metallurgical testing would be to see if a cleaner scavenger stage could recover some of the lost copper. They'd need bigger samples for that.

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    13. I think a lot of pyrite is going into the concentrate, probably because the covellite is fine grading (and replacing pyrite). You would expect Cu grades in the concentrates to be around 30-35% (depending on how much Cpy vs Bn and CC/Cv you have).

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  3. 5 km from the Sumatran fault system and at the intersection of one of the splays and a major arc normal structure. remember this is close to Banda Aceh

    250 mm of rain on average every month of the year

    both porphyry and skarn mineralization and some later stage epithermal alteration meaning multiple phases and mineralization types

    note present of argillic alteration in some locations and presence of arsenic as well (enargite)

    east porphyry right in the bottom of a valley with a river running in it (remember the 3m of precip every year) and also 'steep mountainous terrain'

    core recovery is mentioned but no numbers provided except in a latter section where a 'core recovery vs. copper grade' mentions significant issues with core recovery and the presence of very high clay alteration. Note the picture of the core showing very poor rock conditions.

    it's in Indonesia

    summary - stay away unless you love high risk exploration geology stories where the current resource would need to be quadrupled at MINIMUM to become interesting for a company that might build a mine. The geo-technical risk appears gigantic for this deposit

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    1. Yikes, that's some decent due diligence! So you're telling me there is a chance??? ❤

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    2. Also, what was wrong with my reply to the OP? "This Beutong project will never be developed as a mine." Short and sweet, proper punctuation and capitalization.

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  4. Hi AG,
    "The question is, will anyone care that most of the potentially resources will be at >400m depth and probably beyond the limits for an open pit mine, and too small and low grade for a block cave?" Couldn't they move from an open pit to an underground mine once they get to that stage of the project?

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    1. The statement "and too small and low grade for a block cave" is your answer. The implication is that they have to find something large, and high grade, at depth for it to matter.

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