Flagship Minerals has declared a JORC exploration target of up to 40 million tonnes at its wholly owned Khao Soon tungsten project in southern Thailand, and is considering a sale, joint venture or separate listing to unlock its value.
The target is estimated at between 22 million and 40 million tonnes grading 0.15 to 0.3 per cent tungsten. Mineralisation has been identified through drilling and surface soil sampling to a conservative vertical depth of 120 metres, with the system remaining open laterally and at depth.
Khao Soon sits outside Flagship’s main gold and copper focus in South America and Canada. Proceeds from a transaction could help fund exploration at the Isidora gold project in Chile and the Whipsaw copper project in Canada without requiring further equity financing.
The company recently sold its Reung Kiet lithium project, also in southern Thailand, for US$4 million (A$5.7 million) in cash.
Thai tungsten project offers multiple options
Flagship said the Khao Soon target is spread across five prospects. Than Pho West is the largest, with an estimated nine million to 14 million tonnes grading between 0.2 and 0.3 per cent tungsten, while Last Hill is estimated at five million to 10 million tonnes grading 0.2 to 0.4 per cent.
The project was previously operated as an underground tungsten mine for about a decade until 1980. A 1974 United States Geological Survey report said the mine was producing ore grading between 5 and 12 per cent tungsten, leaving lower-grade material behind.
Flagship’s drilling has since identified near-surface mineralisation, including an intersection of 51.2 metres grading 0.50 per cent tungsten trioxide from surface and another of 34 metres grading 0.63 per cent from surface.
Tungsten prices have risen sharply after Chinese export restrictions, increasing from US$300 per metric tonne unit to as much as US$3,800 over little more than 18 months. One metric tonne unit represents 10 kilograms.
Paul Lock, Flagship Minerals’ managing director, said: “Khao Soon provides Flagship’s shareholders with meaningful exposure to an advanced and strategically positioned tungsten exploration asset in a price environment which suggests that securing such a strategic industrial input is difficult – to say the least – and therefore assets such as Khao Soon are becoming increasingly valuable.”
Flagship is also advancing Whipsaw, acquired in British Columbia for A$6.5 million, where historical drilling has indicated potential for a large copper porphyry system. The project lies 17 kilometres from Hudbay Minerals’ 345-million-tonne Copper Mountain copper and gold mine.
The company believes Whipsaw could eventually be placed into a copper-focused spin-out. Meanwhile, satellite imagery at Isidora is indicating scope to expand the Chilean gold project beyond its existing 2.1-million-ounce footprint.
