Black Canyon’s KR2 Drilling Boosts Resource Confidence and Project Outlook

Robust Drilling Results at KR2

Australian manganese explorer Black Canyon Limited (ASX: BCA) has reported encouraging results from its recent reverse circulation (RC) infill drilling program at the KR2 Prospect within the Balfour Manganese Field in Western Australia. The program, designed to increase drill density from 200m to 100m spacing, returned multiple thick zones of manganese-enriched shale, with grades consistently exceeding 10% Mn and several intercepts surpassing 15% Mn.

Notable intersections include 36 metres at 15.5% Mn from surface (KRRC117), including 17 metres at 17.2% Mn, and 33 metres at 13.6% Mn including 12 metres at 16.0% Mn (KRRC134). These results reinforce the continuity and grade of the manganese mineralisation, which extends over a strike length of approximately 800 metres and a width of 400 to 500 metres, remaining open to the north-west.

Implications for Resource Classification and Project Economics

The current KR2 Mineral Resource stands at 24 million tonnes at 11.9% manganese, classified as Inferred. The increased drill density and consistent assay results provide a strong basis for upgrading this resource to the Indicated category, which carries higher geological confidence. This upgrade is critical as it would allow Black Canyon to bring forward the mining of higher-grade, shallow tonnes in the project schedule.

Previously, the KR2 resource was slated for mining from year six onwards in the KR1 and KR2 Scoping Study, which reported a pre-tax net present value (NPV) of $340 million and an internal rate of return (IRR) of 70% over a 16-year mine life. An upgrade to Indicated status could enable earlier extraction of these higher-grade zones, potentially improving early cash flows and enhancing the overall project economics.

Strategic Positioning in the Balfour Manganese Field

Black Canyon’s Balfour Manganese Field project boasts a global mineral resource estimate exceeding 314 million tonnes at 10.5% manganese, positioning it as the largest manganese resource in Western Australia. The KR2 Prospect is a key component of this portfolio, contributing significant high-grade mineralisation.

Managing Director Brendan Cummins highlighted that the infill drilling was instrumental in refining geological and grade continuity, which will feed into an updated Mineral Resource Estimate and an amended mine schedule. This work is expected to culminate in an updated Scoping Study by the second quarter of 2025, which will reassess the financial metrics of the KR1 and KR2 combined project.

Next Steps and Broader Exploration Plans

Following the completion of the KR2 infill drilling, Black Canyon is preparing for further drilling activities at its Wandanya project, targeting high-grade manganese and iron mineralisation. A Heritage Survey is scheduled for late March to facilitate this next phase of exploration.

While the results are promising, the company cautions that Inferred Mineral Resources carry a low level of geological confidence, and there is no guarantee that the upgrade to Indicated status will be achieved or that the production targets will be realised. Nonetheless, the current data significantly de-risks the project and enhances its attractiveness to investors and potential partners.