It’s very common for junior explorers to reduce exploration risks by establishing tenements next to known mineral belts and established producers – Imagine exploring for commodities next door to a project like Newcrest’s Cadia, Core Lithium’s Finniss or Oz Minerals’ Prominent Hill.
This practice has been dubbed ‘Nearology’ by the market – the idea that an exploration project located near an established mine or within a known mineral belt is more likely to be prospective for mineralisation.
This is because geological conditions that led to the formation of the known mineralisation may also be present in nearby areas. In addition, the exploration project can take advantage of factors from established players such as power and water supply, roads and historical geological data.
There’s a long list of ASX-listed companies that have made significant discoveries thanks to proximity to established producers and mineral belts.
De Grey (ASX: DEG) – Hemi Gold Discovery: De Grey made a significant gold discovery at its Hemi project in July 2019, which sits within the company’s existing Mallina Gold Project.
Bellevue Gold (ASX: BGL) – Bellevue Gold Project: The Project was acquired by the company in 2016 and located in the northern part of the Eastern Goldfields region in WA. Significant hits were made in 2017, with intercepts of up to 7.7 metres at 47.5 g/t gold.
Chalice Mining (ASX: CHN) – Julimar: The Julimar Project in WA is located near the Boddington gold mine.
Ramelius Resources (ASX: RMS) – Penny West Gold Project: Located near the historic Penny West gold mine, the company discovered high-grade gold mineralisation in September 2017. By 2019, Ramelius announced an initial mineral resource estimate of 800,000 ounces at average gold grades of 13.8 g/t
Legend Mining (ASX: LEG) – Mawson Nickel-Copper Project: The Project is located near the Nova-Bollinger nickel-copper operated by IGO. High-grade nickel and copper mineralisation was discovered in March 2019 and subsequent drilling confirmed the continuity and extent of the mineralisation
Of course, nearology doesn’t guarantee exploration success. Here are a few examples of companies that failed to find economically viable mineralisation.
Rox Resources (ASX: RXL) – Fisher East Nickel Project: The Project is located near the Mt Fisher nickel mine operated by BHP. The company found several nickel targets, but subsequent drilling failed to find significant mineralisation. The company eventually decided to divest its interest in the project in 2019.
Encounter Resources (ASX: ENR) – Paterson Project: The Project is located near the Telfer gold mine operated by Newcrest Mining. Again, the company identified several gold and copper targets but drilling failed to find significant mineralisation. The project was divested in 2021.
Great Boulder Resources (ASX: GBR) – Mt Venn Copper-Nickel Project: Situated near the Nova-Bollinger nickel-copper mine operated by IGO. Likewise, drilling did not find any significant mineralisation and the company eventually devised its interest in the project in 2021
Innogy (ASX: IOG): Exploring for nickel next to BHP’s world-class Kabanga
Innogy has established an exploration package covering 5,300 km2 and neighbours BHP’s Kabanga nickel deposit in northwest Tanzania.
In February 2023, BHP agreed to invest $100 million in Kabanga, which represents the world’s largest development ready nickel-sulphide project with a Mineral Resource Estimate of 58.2 million tonnes of nickel at grades of 2.62%.
Innogy’s Northern Frontier Project is positioned along strike from Kabanga and also prospective for lithium – with a similar geological setting to AVZ’s (ASX: AVZ) Monono Lithium Deposit located across the border to the southwest.
Innogy is currently seeking to raise up to $8 million to fund exploration activities, including drilling at the Northern Frontier in the second half of 2023.
DY6 Metals (ASX: DY6): An emerging supplier of heavy rare earths
Upon listing, DY6 Metals will acquire three prospective rare earth and critical metal exploration projects in Southern Malawi.
Its Machinga Project is prospective for heavy rare earth elements such as dysprosium (Dy) and Terbium (Tb) and located approximately 40 km east of Lindian’s (ASX: LIN) Kangankunde Rare Earths Project.
Lindian says current known mineralisation and grades supports a total rare earth oxide resource of at least 10 million tonnes and we’ll find out soon enough as it expects to deliver a maiden Mineral Resource Estimate in the June quarter. But the hype is real for Lindian share – up around 70% since mid-April.
DY6 expects diamond and RC drilling to commence in the June quarter, with results available by the September quarter.
Rare earths explorer DY6 Metals (ASX: DY6)
For a detailed overview - IPO Presentation
To participate in the IPO - IPO Application Form
Nickel explorer Innogy Limited (ASX: IOG)
For a high-level overview of Innogy: Investor Presentation
For a detailed overview of the IPO: Prospectus
To participate in the IPO: Application Form
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