Key Highlights

•  Hole EAL1421 at Green returned 7m at 0.5g/t gold and 2.7% Nb2O5 from 63m, and EAL1483 returned 11m at 0.4g/t gold and 1.4% Nb2O5.

•  The gold was identified in carbonatite at the Green and Emily deposits, from a small number of holes.

•  Encounter plans to re-assay previous Green holes for gold, run mineralogical and metallurgical work, and continue diamond drilling.

Encounter Resources (ASX:ENR) has reported gold alongside niobium in drilling at its Aileron Project in the West Arunta region of Western Australia. The results are from a small number of holes, but the company is now re-assaying earlier drilling to test whether gold could become a co-product of a future niobium operation.

Gold in the carbonatites

The gold was identified in carbonatite intrusions at the Green and Emily deposits. Hole EAL1421 at Green returned 7 metres at 0.5 g/t gold and 2.7% niobium oxide (Nb2O5) from 63 metres to the end of hole. EAL1483, also at Green, intersected 11 metres at 0.4 g/t gold and 1.4% Nb2O5 from 73 metres. At Emily, EAL259 returned 2 metres at 1.1 g/t gold and 2.8% Nb2O5 from 56 metres.

The reported intervals are drill lengths, and true widths were not stated. The gold grades reported so far are modest when considered on their own and would be of interest mainly as a by-product alongside niobium.

Managing Director Will Robinson described the gold as a "pleasant surprise". He said the company did not yet know how significant it could be, but that the handful of holes assayed for gold so far was encouraging.

Niobium results continue

The update also included further niobium intercepts. Aircore hole EAL1491 at Green returned 25 metres at 3.3% Nb2O5 from 80 metres to the end of hole, including 9 metres at 5.6% Nb2O5 from 81 metres. EAL1483 intersected 49 metres at 2.3% Nb2O5 from 48 metres to the end of hole, including 19 metres at 4.3% Nb2O5 from 55 metres. Because several holes ended in mineralisation, the full extent at depth remains untested in those locations.

At Emily, diamond hole EAL2220 extended weathered carbonatite about 40 metres below the previous aircore limit and finished in primary mineralisation. It returned 45.8 metres at 0.7% Nb2O5 from 51.2 metres, including 2.6 metres at 2.5% Nb2O5 from 59.4 metres. The hole lies below the current resource wireframe.

Resource context

Green hosts an inferred mineral resource of 100 million tonnes at 0.71% Nb2O5, including a higher-grade portion of 19 million tonnes at 1.6% Nb2O5. Emily holds an inferred resource of 14 million tonnes at 0.93% Nb2O5. Inferred is the lowest-confidence resource category, and no ore reserves have been declared. Gold is not included in either estimate.

Niobium is used mainly in high-strength steel alloys and is classed as a critical mineral by Australia, the United States, the European Union, Japan and South Korea. Global supply is dominated by Brazil, which is estimated to account for 85% to 90% of output. That concentration is one reason governments and end users are interested in new sources elsewhere.

Exploration investment

Encounter said it had three rigs operating at Aileron and was targeting 70,000 metres of drilling by the end of 2026, backed by cash of more than A$20 million. The company holds 100% of a 1,765 square kilometre landholding in the West Arunta, next to WA1 Resources' ground. Encounter also has copper projects elsewhere, including the Jessica project in the Northern Territory, where South32 is funding drilling.

Next steps and risks

Encounter plans to re-assay previous Green holes for gold, carry out mineralogical analysis on higher-grade intersections and undertake metallurgical test work to assess gold recovery as a co-product. Diamond drilling also continues across potential starter pit areas at Green, with a significant number of holes awaiting assays.

Key uncertainties include the small number of gold assays to date, whether gold is present consistently enough to matter economically, whether it can be recovered efficiently with niobium, and the remote location of the project. Metallurgy and resource confidence will be central to any future development case.