Perth mining exploration company AusQuest is abandoning two of its projects in Western Australia.
The Billy Blue Zinc and Jimberlana Nickel Projects it had been exploring as part of a joint venture with BHP Billiton spinoff South32 did not seem worth it, the company said on Wednesday.
‘Drill testing of targets identified by the Company at both prospects has not provided sufficient encouragement to justify ongoing exploration,’ AusQuest said.
Thirteen drill-holes at the Billy Blue Zinc Project in the Edmund Basin, 100km southwest of Paraburdoo, found ‘thick black mudrocks’ but not enough zinc for mining, the company said.
At the Jimberlana Nickel Projects 120km west of Norseman, two diamond-drill holes 716 metres deep found only rocks, with no signs of the metals that had seemed to be present on electromagnetic scans.
Downhole electromagnetic surveys ‘which were subsequently completed to search for near-miss situations, failed to identify any conductors of interest effectively downgrading the project,’ AusQuest said.
AusQuest was exploring both projects under the terms of its strategic partnership with Perth mining company South32.
In return for funding AusQuest’s drilling exploration costs of up to $US4 million, South32 earns a 70 per cent stake in each project, according to AusQuest’s annual report.
AusQuest managing director Graeme Drew said while the results were disappointing, other projects, particularly in Peru, ‘had been much more encouraging’.
AusQuest said on December 19 that initial drill-holes at its Cerro de Fierro project in southern Peru had found evidence of both copper and gold.
In its annual report AusQuest said it was working on 11 projects total, four in Peru and seven in Australia, including the two that were just abandoned.
AusQuest shares were trading down 0.4 cents, or 21.05 per cent, to 1.5 cents, at 1048 AEDT.
South32 shares were up 0.15 per cent, or 0.5 cents, to $3.355.