Catalysts looming for Noronex as South32 prepares to kick off copper program

While the name Noronex may sound more like a cleaning product or an antibiotic, the company has plenty going for it.

“We’re a small exploration company but we have big plans,” newly-appointed Noronex managing director Victor Rajasooriar said.

Noronex is the largest landholder in the Kalahari Copper Belt, an emerging global hot spot for both copper production and discovery.

In 2008, the belt had no confirmed copper resources. Today, it hosts around 8 million tonnes of contained copper, including 125,000 tonnes at Noronex’s Witvlei project in Namibia.

The belt is also now home to around 90,000t per annum of annual copper production, largely on the Botswana side, where Sandfire Resources’ Motheo and MMG’s Khoemacau mines sit.

Sandfire, and its predecessor MOD Resources, took Motheo from discovery to production in just seven years – well below the global average of 16 years.

Highly leveraged

Noronex has a market capitalisation of just A$7 million and cash at the end of March of A$1 million.

However, what sets the company apart is its strategic alliance and five-year, A$20 million earn-in agreement with diversified major South32, which was signed last year.

Last month, the pair expanded the alliance to include two tenements in Botswana that Noronex picked up earlier this year.

South32 has committed to spend A$3 million on the projects in Namibia and A$1 million on the ground in Botswana this financial year.

If South32 maintains that spend for five years, it will earn 60% of the projects.

“It’s very exciting for a small company like this,” Rajasooriar said.

Earlier this month, Noronex reported that deep drilling funded by South32 at the Fiesta project in Namibia returned 11m at 0.5% copper and 18 grams per tonne silver from 371m and 6m at 0.7% copper and 15g/t silver from 455m.

Assays for a further two holes are expected in the next 4-6 weeks.

The diamond rig has been relocated to the Oosterwald prospect, south of Fiesta, located on a newly granted licence.

The drilling will target a potentially buried domal position identified from an airborne heli-electromagnetic target that has been interpreted as a conductive shale horizon.

Domal structures are the typical hosts of all the known sedimentary-hosted copper deposits in the belt.

This week, Noronex announced that a contract had been signed for a 7000m reverse circulation program to kick off at the Humpback project in Namibia next month, again funded by South32.

The focus will be the Powerline project, to the northeast of Oosterwald.

Like Oosterwald, the drilling will be targeting large domal structure.

Rajasooriar said Powerline had been sparsely drilling in the past by London-listed major Antofagasta and Sandfire, which identified anomalous copper zones containing silver.

Importantly, the historical work identified 16 domal prospects, of which five will be tested by the alliance in the current financial year.

“We’re targeting 100 million tonne-type deposits and they certainly are present in that copper belt,” Rajasooriar said.

Big neighbour

While Noronex has been gaining momentum in its own right, it got another boost this year with the entry of BHP into the region.

Fellow junior Cobre announced late last year that it was negotiating an earn-in with BHP in Botswana following Cobre’s participation in BHP’s exploration accelerator Xplor.

In March, Cobre announced the terms of the formal agreement, with BHP to provide up to US$25 million for exploration expenditure at Cobre’s Kitlanya East and Kitlanya West copper projects and be granted the right to earn a 75% interest in the projects.

Part of the Cobre-BHP ground adjoins Noronex’s Cgai Cgai project in Botswana.

“I’m actually quite excited about this Botswana tenement package and nearology plays a lot into this,” Rajasooriar said.

BHP and Cobre conducted a seismic survey on their ground, which accidentally extended about 5km into Noronex’s tenements.

Noronex is awaiting the data from that survey for its own ground.

The BHP-Cobre alliance is currently drilling a 1km deep hole at Tlou, roughly 1km from Noronex’s tenement boundary.

Resources a starting point

Noronex’s Witvlei copper resource of 10Mt at 1.3% copper in Namibia sits outside the South32 alliance and is 95% owned by the company.

The project still has growth potential and it would be Noronex’s aim to triple the resource in order to justify a standalone operation.

There are also two other advanced copper developments nearby.

Also outside the alliance in Namibia is the Etango North uranium project in the centre of the country’s hard rock uranium district.

The project sits along strike from Bannerman Energy’s shovel-ready 207 million pound Etango project and is considered anomalous for uranium.

Outside Africa, Noronex holds a copper project in Ontario, Canada, on the Onaman-Tashota greenstone belt.

The project hosts the Lynx deposit, which has a shallow inferred resource of 1.63Mt at 1.61% copper, 0.66g/t gold and 39.68g/t silver.