Deep-South Resources Inc. (OTC:JAUGF)

Deep-South Resources Inc. (OTC:JAUGF)

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Deep-South Resources is a mineral exploration and development company. Deep-South is actively involved in the acquisition, exploration and development of major mineral properties in Africa. Deep-South growth strategy is to focus on the exploration and development of quality assets, in significant mineralized trends, close to infrastructure, in stable countries. Furthermore, in using and assessing environmental friendly technologies in the development of its copper project, Deep-South embraces the green revolution.

Deep-South holds 100% of the Haib Copper deposit in the south of Namibia. Haib is arguably the oldest porphyry deposit in the world and one of the largest in Africa. Deep-South recently disclose a PEA over the deposit and at a price of copper of $3.00 / lb, it generates an after-tax NPV of $950 million and an after-tax IRR of 30%.

In Namibia, we are guided by integrity values that keep us focused on our purpose: to turn our exploration projects into lasting reality for our empowered Namibian communities. Deep-South is committed to advancing its projects while operating in an environmentally responsible manner.

The Haib project is a large copper-molybdenum porphyry deposit located in the Karas region of southern Namibia, 8 km from the Orange River and the South African border.

The deposit is a porphyry copper-molybdenum dating from the Archean age. The Haib Cu-Mo deposit is arguably the oldest porphyry deposit in the world, which hosts easily identifiable porphyry veins and alteration. The principal mineralised hosts at Haib are a quartz feldspar porphyry and a feldspar porphyry rock. The main ore mineral at Haib is chalcopyrite, but minor amounts of bornite, chalcocite and the various green copper oxides can also be found.

The deposit hosts a 43-101 an indicated resource of 456.9 MT @ 0.31% Cu equal to 3.12 billion lbs of copper and an inferred resource of 342.4 MT @ 0.29% Cu equal to 2.19 billion lbs of copper at a cut off grade of 0.25% Cu. The resource estimation has been completed by P & E Walker consultancy and Obsidian Consulting Services, both of South Africa.

Haib Copper Project:

The Haib deposit has a distinct surface expression with abundant copper staining on fractures and joint planes, particularly in and around the dry river bed of the Volstruis River. This led to German prospectors identifying the deposit around the late 1800s or early 1900s. Small tonnages of high grade copper carbonate ore were mined at this time.

After World War II, the prospect was pegged as claims by prospector Mr. George Swanson who carried out small scale mining and tank leaching operations. Over 6,000 tons of hand sorted high-grade copper ore were sold to the O’okiep Copper Mines, across the border at Nababeep in South Africa, reportedly at grades of up to 18% Copper.

In 1963 - 1964 Falconbridge completed a moredetailed exploration programme looking at the higher grade zones within the Haibdeposit. They drilled some eleven diamond drillholes totalling 1,012 metres of drilling. The average grade of the drillhole intersections was given as 0.33% Cu.

During 1968 - 1969 King Resources of South Africa Pty Ltd conducted a diamond drilling programme of 21 holes totalling 3,485 metres. They examined both lower and higher grade sulphide zones, as well as the higher gradeoxide shear zones.

During 1972 – 1975 Rio Tinto Zinc (“RTZ”) conducted the first extensive and systematic investigation of the Haib deposit. Geochemical and chip sampling surveys were conducted along with IP and Resistivity surveys. They drilled one 120 diamond drillholes totalling 45,903 metres. The cores from this programme are still intact and stored in a core shed on site. RTZ sampled by compositing half cores over 2 metre intervals and submitted these for determination of total copper and where appropriate, oxide copper (acid soluble copper). Composite samples from each drillhole were also tested metallurgically to determine recoverable copper and were assayed for molybdenum, silver and gold indicating average contents of 25 g/t Mo, 0.01 g/t Au, and 0.9 g/t Ag. Tonnage and grade estimates at various cut-offs were made and a conceptual pit design was proposed.

In November, 1993 Rand Merchant Bank Ltd of South Africa acquired an option over the Haib property. Venmyn Rand Pty Ltd., produced a study of the project including compilation ofall the available drillhole and assay records from previous investigations and set up a computerised drillhole database. It was concluded that the increase in the copper price since the 1970’s, development of low cost / high tonnage mining systems and new and refined technologies such as bacterial leaching, solvent extraction and electro-winning combined to create a situation where development of the Haib deposit could represent an economic project; however, no further exploration work was done and work terminated in 1995.

In March 1995, Great Fitzroy Mines NL (“GFM”) and RMB Mr. George Swanson signed a joint venture called Namibian Copper Joint Venture (“NCJV”). From 1995 to 1999, NCJV drilled a 12 infill holes, drilled 5 geotechnical investigation holes, completed 126 metres of excavation in an adit and two crosscuts for bulk sampling and metallurgical testing and carried out various test works including mining cost audits, bio-leaching studies, and milling and grinding studies. NCJV ran into financial difficulties and work was stopped at the Haib deposit in early 1999.

In 2004, Deep-South Mining Company (Pty) Ltd (Deep-South) was granted the Exclusive Prospecting licence 3140 (EPL) was granted over an area of 74,563.0 ha covering the deposit and a very large surrounding area. This was subsequently renewed in April 2007, 2009, 2011, 2013 and 2015 with the area reduced to 37,000ha after the 2007 renewal.

From 2008, Teck under the option Agreement with DSM has completed a comprehensive exploration programme at the Haib and immediate surroundings.

The Haib copper deposit is in the extreme south of Namibia close to the border with South Africa, which is defined by the course of the Orange River. The deposit lies some 12 – 15 kilometres east of the main tarred interstate highway connecting South Africa and Namibia and the nearest railway station is at Grunau, some 120km north on the main highway. This rail connection could provide access to either the port of Luderitz or to Walvis Bay via Windhoek or to South African ports or facilities via Upington.

The Haib deposit is located within part of the Namaqua-Natal Province called the Richtersveld geological sub-province which is further subdivided into a volcanosedimentary sequence (locally, the Haib Subgroup), the Orange River Group and the intrusive Vioolsdrift suite which are closely related in space and time. The Orange River Group is composed of sub-aerial volcanic rocks and reworked volcaniclastic sediments; deformation caused displacements along stratigraphic contacts before intrusion of the Vioolsdrift suite. The predominance of andesitic and calc-alkaline magmatic rocks with tectonic compression prevailing throughout the magmatic episode has led to an interpretation of an island-arc model for the region. Recent mass spectrography indicated an age of 1,880 Ma for the volcanics.

The principal mineralised hosts at the Haib are a Quartz Feldspar Porphyry (QFP) and a Feldspar Porphyry (FP) – see Figures 4 and 5 below. The QFP is interpreted as a quartz diorite body which intruded the feldspar porphyry some 1,868 ± 7Ma . The FP is generally interpreted as being part of the suite of andesitic rocks although some workers have suggested that it too, may be partially of intrusive origin. The QFP is elongated along the orientation of the Volstruis Valley, largely coincident with the location and orientation of many of the higher grade intersections within the deposit. The sequence has undergone low grade regional metamorphism to greenschist facies which event has been dated at 1,100Ma. Most of the rock exhibits typical porphyry copper type alteration zones associated with mineralisation. A potassic hydrothermal alteration zone coincides with the main mineralised area surrounded by phyllic and propylitic alteration haloes. Propylitic and sericitic alteration appears to overprint the earlier potassic zones. Silicification, sericitisation, chloritisation and epidotisation are widespread.

As the operator of the project from 2010 to 2016, Teck took a more regional view of the project than previous operators. Their exploration objective was to provide the required data to show that the deposit had potential for large-scale mining, particularly if the tonnage or grade, or both, could be improved and that early stage mining could exploit sufficient high-grade mineralization to improve the economics of mining. They started a new exploration program both to investigate the open ended parts of the deposit (deep drilling and extension drilling) and to explore for new, undiscovered outlying mineralization. This had not been previously attempted.

Following this model, from 2008 to date, Teck have completed the following work:

A regional stream sediment sampling program collected 276 samples aiming to sample all first and second-order streams every 300m-500m over an area of 320sq.km. This led to the discovery of four adjacent anomalous zones spaced some 2km from the main Haib mineralization;

A total of 32 diamond drillholes totaling 14,252 metres. These were drilled within the historically defined main mineralization and on the Eastern, Southern and Western anomalies;

Using the Anaconda mapping method, which maps in detail the lithology, alteration, vein type, orientation and intensity on separate overlays, they have mapped about 75% (205 ha) of the area around the 275 ha. Main deposit (at a scale of 1:10,000) and all (90 ha.) of the main deposit at 1:2,000 scale;

They have re-logged all of the available (108 out of 120) old RTZ drillholes in detail, again using the Anaconda method. These were all located within the Main Haib deposit.

They have re-sampled 14 of the old RTZ drillholes to compare the assay results obtained by RTZ for copper and also to determine the grade of gold, silver and molybdenum.

They completed some 83 line kms. of pole-dipole Reconnaissance Induced Polarization (RIP); and another 6 line km. of Audio Magnetotellurics (AMT).

They have taken 636 soil samples on grid lines 150m apart with sample spacing of 50m covering an area of 400 hectare across three of the satellite targets.

They have constructed a 3-D geological model of the Main Haib zone. This model combines all the surface and down hole geology, assays and geochemistry to constrain the grade envelope in a future resource estimate.

he results from the recent Preliminary Economic Assessment (PEA) are highly promising and METS recommends to Deep-South to complete a Feasibility Study (FS) for the deposit.

Deep-South plans to undertake the Feasibility Study (FS) by the end of Q4 2020.

The program includes:

-Up to 12,000 meters of HQ (large core) infill drilling in the high-grade area to define the average grade of the area, to estimate a measured resource and to increase the grade of the overall deposit
-Further metallurgical test-work (heap leaching)
-Mining Engineering design for the FS
-Environmental Impact Assessment (EIA) and base-line studies


Deep-South Resources Inc. is traded on the OTC under the ticker symbol JAUGF. This is not investment advice. Please view the disclaimer found on this website.
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