Two Major Conductive Targets Identified at Merlin Project in First Survey in 25 Years

A Breakthrough at Merlin

Lucapa Diamond Company has announced a significant development at its Merlin Diamond Project in the Northern Territory, revealing two large conductive base metal targets identified through the first modern geophysical survey in a quarter-century. This discovery is particularly noteworthy given the project's proximity, just 50 kilometres south, to the McArthur River zinc-lead mine, one of the world's largest and most productive base metal operations.

The survey employed the advanced Xcite helicopter-borne time-domain electromagnetic (HTDEM) system, which offers a depth penetration of up to 500 metres, far surpassing previous technologies limited to around 100 metres. This enhanced capability allowed Lucapa to detect two substantial conductive anomalies beneath an inlier of Proterozoic sediments, a geological setting closely analogous to that which hosts the McArthur River deposit.

Geological Context and Significance

The identified targets, designated Target A and Target B, measure approximately 2.5 by 1 kilometre and 0.75 by 0.5 kilometre respectively. Their location along structural trends known to extend from the McArthur River mine area underscores their potential to host significant base metal mineralisation. The McArthur River mine itself produces over 250,000 tonnes of zinc, 50,000 tonnes of lead, and 1.2 million ounces of silver annually, setting a high benchmark for the region.

Lucapa's Managing Director, Alex Kidman, highlighted the excitement surrounding these results, noting the application of cutting-edge geophysical technology to an area previously unexplored with such tools. The discovery of these targets opens a new chapter for the Merlin Project, which until now has been primarily associated with diamond exploration.

Next Steps in Exploration

With the initial survey data processed, Lucapa is advancing to a second phase of data interpretation and modelling. This phase aims to identify smaller or less conductive targets, including potential new kimberlite bodies, which are the primary source rocks for diamonds. The company anticipates releasing these results within the current quarter.

In parallel, Lucapa plans to undertake ground-based geophysical surveys to better define the two large base metal targets. Such follow-up work is critical to delineate the size, depth, and grade potential of the anomalies before any drilling programs can be considered.

Strategic Implications for Lucapa

This discovery could diversify Lucapa’s asset base beyond diamonds, potentially positioning the company to benefit from base metal markets. The Merlin Project’s renewed exploration focus, leveraging modern technology, may unlock value in a historically underexplored region with proven mineral endowment.

While the targets are promising, it is important to note that no drilling or sampling has yet been conducted to confirm mineralisation. The upcoming phases of exploration will be pivotal in validating the economic potential of these targets.