Updated Coverage of Revolver Resources (ASX: RRR)

May 6, 2024

Revolver Resources Ltd (ASX: RRR) is actively and effectively exploring two highly prospective projects in North Queensland – the 874 km2 Dianne Project, over and around the historically-operated Dianne Copper Mine in the Paleozoic Hodgkinson Basin, and the 765 km2 Project Osprey under cover in the northern extents of the world-class Proterozoic Mount Isa Inlier.

Dianne is the most advanced of the projects, centred over a mine that produced 69,820 tonnes of direct shipping ore, grading at between 18% and 26% Cu and 359 g/t Ag in the late 1970s and early 1980s. Dianne has an initial Mineral Resource Estimate (MRE) of 1.62 Mt @ 1.1% Cu (18,000 tonnes contained Cu), with initial bench-scale metallurgical test work delivering positive results.

The Company is concentrating activities looking at a low-cost heap-leach/SX-EW restart of Dianne, and with all going well, an FID is expected by the end of CY24, with the first LME A-grade copper cathode shipped in Q4, CY25. Although planned initially as a relatively small, short-term operation, any future discoveries could potentially provide additional feed to increase the scope of operations at Dianne. Cash flow generated by Dianne will be used to fund company growth activities, including exploration on the two highly prospective properties.

Revolver is looking to an equity partner at the proposed mining project level to help fund what is expected to be a relatively low-cost and rapid development, partly due to being located on existing MLs, and with some critical items of infrastructure in place.

The broader Dianne area was originally regarded as being prospective for Besshi-style volcanogenic massive sulphide (VMS) mineralisation, however work by the Company, including drilling, has highlighted the prospectivity for structurally-controlled polymetallic and intrusion-related gold (IRGS) in addition to the VMS. North Queensland is host to several multi-million ounce IRGS deposits, including Ravenswood amongst others.

Target mineralisation styles at Osprey include Mount Isa-style Cu and Pb-Zn-Ag, and iron oxide copper gold (IOCG) mineralisation, examples of which include the world-class deposits in the Inlier, including Mount Isa, Hilton and Ernest Henry. Work to date has demonstrated the presence of the key ingredients for these styles of mineralisation, including metal source rocks, fluid pathways and reactive metal trap rocks, and with drilling intersecting zones of the right alteration and copper veining.

Majors, including Anglo-American and FMG have pegged ground adjacent to Osprey, which would appear to be a vote of confidence in the results coming out of Revolver’s work.

We see significant value upside in Revolver, with, in our view, the current market valuation largely reflecting the prospectivity and results to date, and not the value presented by the development of Dianne. In addition to further positive exploration results, material advances on the pre-production activities and then successful production should drive value.