New exploration techniques open up S2 Resources search for Swedish company maker

After snapping up a, strangely unexplored, big chunk of one of the world’s biggest proven prime precious metals/polymetallic regions, S2 Resources is introducing Sweden to new exploration techniques. By Mark Mentiplay

S2 Resources is converting some ‘first-ever exploration moves’ to advance the company’s flagship 271 square kilometre Skellefte precious metals-polymetallic project in Sweden.

The company, borne out of the takeover of Sirius Resources by Independence group (ASX: IGO) in 2015, has a growing belief that Skellefte is its best chance of repeating history to find another monster company maker. S2 recently carried out the first VTEM (versatile time domain electro-magnetic) geophysical survey ever undertaken over the historic 100-year old mining region that contains some of Sweden’s largest polymetallic mines.

The survey identified 64 EM conductors, many along strike from major operating mines in an established mining district, where S2 is now the largest ground holder, peppered with mining infrastructure and where global Swedish metals and mining giant Boliden made its start.

S2 is now developing a dual-pronged strategy that will use its 207,000 ounce Polar Bear gold project in Western Australia's Eastern Goldfields to fund, not only its own expansion/development, but also Skellefte’s.

It is a potential early cash flow strategy to build on the approximately $18 million the company’s has in the bank without any debt.

A similar early cash option is also a possibility for Skellefte.

“Sweden is our best chance of finding a company maker,” S2 Resources managing director Mark Bennett told The Resources RoadHouse.

“It’s early days yet, but Sweden is shaping up much faster than we thought.

“Even at this stage, we’re targeting a Tier-1 stand-alone operation, and we have only been directly involved in the region since 2014, prior to our ASX-listing in October, 2015.”

From the takeover by IGO, S2 took with it a portfolio containing the Polar Bear gold project, including the Baloo discovery and the Scandinavian exploration properties.

Unlike Skellefte, where the drilling period extends from the freezing October to March months, 100 per cent-owned Polar Bear is a conventional, unconstrained gold exploration play a large unexplored ground holding surrounded by a 30 million ounce gold endowment in a recognised major gold province.

Earlier this year, S2 outlined the first initial mineral resource estimate for Polar Bear’s Baloo deposit of 2.17 million tonnes at 1.8 grams per tonne gold for 123,000 ounces of gold using a 0.8g/t cut-off from just 2m below surface down to about 100m.

It backed this up with another 84,000 ounce gold resource in a paleo-channel at the Nanook prospect, 10 kilometres south of Baloo, and with high grade gold drill intersections in nearby bedrock, including 4m at 50.7g/t gold.

More high grades up to 12m at 26.2g/t gold, have also been intersected at the Monsoon deposit, between Baloo and Nanook.

S2 is eyeing possible early monetisation of Baloo, with options running to nearby toll treatment, a heap leach operation or even the sale of the currently defined part of the deposit.

The toll treatment options include Metal X’s nearby, under-utilised Higginsville plant, Gold Fields’ St Ives plant and a privately-owned plant at Norseman, currently on care and maintenance.

S2 has defined three major gold hotspots over 10km on a single trend at Polar Bear.

Follow up drilling to hopefully further expand the Baloo resource down plunge, is planned to follow a program of reverse circulation (RC) and aircore drilling that resumed in mid-June at Monsoon and Nanook.

“The important thing about Baloo is that it is mainly oxide, starts just two metres below surface and has a high ounce- per-vertical-metre metric of between 1,000 ounces to 1,500 ounces per-vertical-metre from two metres,” Bennett said. The latest Baloo drilling down plunge to the south follows up results including: 2.5m at 10.9g/t gold, 1m at 43.1g/t and 2.5m at 9.52g/t from different holes.

The deposit is also open down dip to the east, with results including: 5m at 6.9g/t and 8m at 5.98g/t from different holes.

S2 is currently finalising mining/engineering studies for Baloo.

Monsoon has returned intercepts of up to 12m at 26.2g/t from 20m in the steeply west dipping lode and 32m at 2.5g/t.

Ahead of its resource estimate, drilling at Nanook encountered 16m at 51.3g/t from 44m, including 4m at 203g/t from 48m; 1m at 1.56g/t from 59m and 16m at 1.63g/t from 40m, including 4m at 4.69g/t from 44m.

But it is Sweden and S2’s Skellefte precious/polymetals project where the company is anticipating finding its company maker.

It sits in a world-class gold/base metals VMS (volcanogenic massive sulfide) camp on which S2 carried out the VTEM survey, which identified the 64 EM conductors under just 5 metres of cover.

The first two holes drilled on a single section to test the first EM anomaly, as part of a quick check, three-diamond drill campaign, confirmed zinc mineralisation at the Svan Vit prospect, including 5.05m at 3.15% zinc.

The first hole clipped the top of the ground EM conductor model, intersecting a narrow zone of mixed sulphide mineralisation, returning 0.55m at 1.49g/t gold and 45g/t silver from 25.3m, and 1.05m at 2.87% zinc and 5g/t silver from 88.7m.

The second hole, 90m down dip of the first through several zones of mixed sulphide mineralisation, intersected 0.55m at 2.23% zinc from 164m, 3.7m at 1.75% zinc and 5.3g/t silver from 170.2m; and 5.05m at 3.15% zinc, 6g/t silver and 0.2% copper from 184.6m.

A follow-up downhole EM survey suggests the three holes S2 has drilled to date have only tested the margins of a potentially much more extensive zone.

S2 is planning about 7,000m of diamond drilling for the upcoming October-March drilling season for Skellefte’s top 10 geophysical targets found to date, including follow up drilling at the Svan Vit prospect on the back of these two holes.

Other positives for Skellefte are that it is close to the ore hungry Ronsskar smelter, a port and infrastructure.

Knowledge of S2’s prime holdings in the region, now larger that Boliden’s and immediately along strike from some of its mines, goes back to 1994 when foreign exploration companies were first allowed into Sweden and Boliden moved quickly to snap up all the ground around its Swedish mines.

At that time, there was no requirement for companies to spend any exploration money on their holdings, which meant there has been surprisingly little effective exploration.

This situation ended in late 2014-early 2015 when the acreage was freed up.

That’s when specialists known to Sirius Resources, and funded by it, began pegging everything they could in the Skellefte belt.

“When we arrived in Sweden, the ground surrounding all of Boliden’s operating mines was available and either unexplored or ineffectively explored, unlike what you would typically find in Australia,” Bennett explained.

“We basically blanket-pegged the ground.”

That Boliden hadn’t utilised either VTEM or downhole EM, surprised S2, especially given the calibre of the mines they have discovered without it.

“We have hit VMS mineralisation with the first two drill holes into the first of the 64 EM anomalies we have identified to date,” Bennett said.

“But from what we have seen in the results we have so far, it looks like we’re on the edge of something bigger.”

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