Petratherm is about to start a new drilling campaign at its SA titanium project

Petratherm shares rocketed more than tenfold after it discovered titanium near Coober Pedy last year. It’s now restarting drilling at the potentially “world class” project.

Petratherm's titanium minerals sands project in Far North South Australia. Picture: Supplied

Petratherm has raised more than $8m to progress its “world class” titanium mineral sands project near Coober Pedy in South Australia, following its discovery last year which has boosted the value of the explorer more than ten-fold.

The Adelaide-based company has made the placement of new shares to investors and directors, subject to shareholder approval, at 22c a share.

The money will be used to fund the second phase of drilling at the company’s Muckanippie project in SA, focussed on the Rosewood deposit.

Petratherm is chaired by Derek Carter, the former head of Minotaur Exploration, the company which discovered the Prominent Hill copper and gold deposit, which was sold to Oxiana, which evolved in OZ Minerals, which was bought out by BHP.

Petratherm managing director Peter Reid told News Corp Australia the company had a depth of local knowledge, which led the team to take a new look at historic drilling results in SA.

It quickly became apparent, once they had assessed drill core held at SA’s core library, that there was good potential for mineral sands at Muckanippie, and site visits last year confirmed this.

The company’s first round of drilling, conducted last year, delivered results including 36m of 4 per cent titanium dioxide from the surface.

The mineralisation extends for 15km and remains open to the north, west and east, the company says, with ore thicknesses of 5m-30m.

Petratherm's project is south-west of Coober Pedy.

The results from last year’s drilling campaign lit a fire under the company’s stock price, which has traded as low as 1.6c and as high as 49c over the past year.

The stock gained 3c to close at 26.5c on Friday after the company announced it would be raising the new equity at 22c per share.

Mr Reid said the company already had a drill rig booked for the second drill campaign which was scheduled to start on March 16.

He told News Corp Australia that the mineralisation at the Rosewood deposit was characterised by high grades but also a lack of deleterious elements, which would make processing simple.

“It’s shaping up potentially to be a world-class heavy mineral sands deposit,’’ Mr Reid said.

Mr Reid has worked with Mr Carter since the late 1990s, and characterised Petratherm as “in many ways the new Minotaur” with the team having deep knowledge of South Australian geology.

The Petratherm team, while working on a different prospect to the north of Muckanippie, noted the existence of an unusual type of igneous rock - anorthosite - which tends to be associated with rich metals deposits globally.

“These complexes around the world host big deposits, and they’re noted for titanium,’’ Mr Reid said.

“The old exploration there had been focussed on gold, but we could see from the old drilling there was elevated titanium.’’

Petratherm put a geologist on the ground, and they found sand sediments with dark elements, which turned out to be titanium.

“That was an ancient inland sea, a shoreline-type environment,’’ he said.

Petratherm drilled almost 4000m in the first campaign last year, and will follow up with another 6000m in the second campaign.

Mr Reid said the Rosewood Prospect had large titanium grain sizes which boded well for processing, with no deleterious elements.

Mr Reid said the upcoming drilling campaign would involve in-fill drilling for metallurgical testing and further exploration drilling, and would be relatively simple given the mineralisation was shallow.

“The March drilling will extend the drilling out beyond where we know, several kilometres, we’ll do in-fill drilling to get bulk samples and then probably in May/June, we’ll do resource drilling.

“I’d say by September we’ll have a resource, products, we’ll probably pretty well de-risk the whole project in the next four to five months.’’

Mr Reid said the global titanium market was worth about $US30bn at the moment and was growing steadily.

Taylor Collison, which was the sole lead manager on the capital raising, has a price target of 69c per share on Petratherm.

“With the sheer scale of the targets identified (particular focus on the Rosewood Prospect – the most advanced so far), coupled with the high titanium dioxide grades and the favourable titanium dioxide composition that has been defined by the samples tested to date, we see significant upside for Petratherm and rate it a speculative buy with a price target of 69c per share,’’ the broker said.

Originally published as Petratherm is about to start a new drilling campaign at its SA titanium project