Copper is expected to be the commodity of the next decade and, faced with a dearth of expansion opportunities for existing mines and a surging copper price that has inflated the value of near-term development plays, the majors have reinvigorated exploration units gutted last decade as commodity prices fell, and are back in the hunt for early stage discoveries.
The latest land rush is in the northeast of the Northern Territory, around Tennant Creek and into Queensland, where more than 150,000 square kilometres of new tenements have been pegged over the past year or so, according Geosciences Australia, with more than 25 companies picking up greenfields ground in the region.
Late last month BHP announced it was taking up a $22m option to farm in tenements held by WA-headquartered Encounter Resources, agreeing to spend exploration cash to earn up to a 75 per cent stake in the tenements. Over the last year Rio Tinto has pegged thousands of square kilometres of greenfield ground nearby, hoping to repeat the success of its Winu discovery in WA.
Canadian major Teck Resources has also marked out large swathes of the region east of Tennant Creek.
The majors are jostling for position with a host of smaller companies such as Inca Minerals, Middle Island Resources, Greenvale Mining and DGR Global – backer of SolGold and its Alpala copper discovery in Ecuador, which has attracted interest from both BHP and Newcrest Mining.
Tennant Creek has a long history as a gold district. In the 1930s the tiny NT town was the site of Australia’s last great gold rush, and was briefly Australia’s third-biggest gold-producing region as companies and smaller prospectors flooded in to take advantage of high-grade deposits.
But the easy pickings tailed off quickly and the collective interpretation of the region’s geology was that further deposits, particularly big ones, would only be found deep underground.
But that has all changed, courtesy of the early stage geological surveys conducted by the NTGS, Geoscience Australia, and the federal government’s $225m Exploring for the Future program.
Collectively, about $25m of public funds were spent on geological research in the region between 2016 and 2019, with the datasets – released in late 2019 – helping kick off the current land rush in the region.
Encounter Resources boss Will Robinson told The Australian the geological work suggested the region had the potential to hold sediment-hosted copper deposits – similar to the copper found in central Africa’s massive high-grade copper operations, such as the under-construction Kamoa-Kakula operation, where Ivanhoe Mines already has a 3 million tonne ore stockpile grading an average 4.7 per cent copper.
“All the right geologies are appearing, hopefully close to surface,” Mr Robinson said.
Encounter is still in the early stages of its work, both on the tenements it will work with BHP and on its other landholdings, but Mr Robinson said there were promising signs that the region hosted a substantial amount of copper.
The trick will be, as always, to find the best parts of it.
“In a short space of time, the amount of copper that’s being found in this area, just for the greater MacArthur base and as we call it,” he said.
Mr Robinson said test holes drilled through the government-funded National Drilling Initiative had hit good signs of copper mineralisation, and on-ground exploration was yielding more promising signs.
“You’ve got it on the sides of roads with people finding new outcropping occurrences,” he said.
“Through our systematic evaluation of the historical water bores, we found a water bore with three metres at 1.5 per cent copper in there.
“And there’s very few exploration holes that have been drilled.”
Emmerson Resources has been exploring around Tennant Creek for the better part of a decade, according to managing director Rob Bills, and has made a number of smaller high-grade discoveries it will turn over to a partner to be mined, in exchange for a royalty.
Mr Bills told The Australian the flood of interest from the majors was helping highlight the potential of the area, but he said that improvements in technology were helping juniors compete with the financial and technological muscle claimed by the big miners.
Emmerson is about to use drones to run surveys on a portion of its tenements in the hope of finding new drilling targets, at a cost of about $400,000. “A few years ago you’d have had to hire a fixed wing aircraft to fly a big area to get that kind of information, and that was a lot more expensive,” he said.
The sudden rush into the region around Tennant Creek is not the only land grab in which the majors are jostling for position with exploration ground with junior explorers. Rio’s discovery of the Winu deposit in WA’s Pilbara region helped spark a similar land grab, along with Greatland Gold and Newcrest Mining’s Havieron project in the same district.
A similar push is on in South Australia’s Gawler Craton, which hosts BHP’s Olympic Dam mine. A host of big companies, including Fortescue Metals Group, are now active in the region, either in partnership with junior explorers or working on their own tenements.
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Rio Tinto, BHP and a host of large and small explorers are piling into prospective ground in the Northern Territory in the hunt for the next generation of Australian copper mines, sparking the country’s latest exploration land rush.