Newfoundland-based private drilling company Cartwright Drilling Inc is in dispute with Conico Limited (ASX: CNJ; FRA: BDD) over outstanding royalty payments of approximately CAD1.4 million. Cartwright has been drilling exploration wells for Conico this summer season on both the Ryberg and Mestersvig projects in eastern Greenland. Conico announced today that the drilling company has now initiated arbitration proceedings in Newfoundland. The dispute had previously been indicated because Conico had also publicly expressed its dissatisfaction with the quality and performance of this year’s drilling team. Effectively, only about one-third of the planned wells were drilled on Greenland this field season.
Newfoundland-based private drilling company Cartwright Drilling Inc is in dispute with Conico Limited (ASX: CNJ; FRA: BDD) over outstanding royalty payments of approximately CAD1.4 million. Cartwright has been drilling exploration wells for Conico this summer season on both the Ryberg and Mestersvig projects in eastern Greenland. Conico announced today that the drilling company has now initiated arbitration proceedings in Newfoundland. The dispute had previously been indicated because Conico had also publicly expressed its dissatisfaction with the quality and performance of this year’s drilling team. Effectively, only about one-third of the planned wells were drilled on Greenland this field season.
Conico’s Board of Directors believes that Cartwright’s performance in a number of key areas was materially deficient and not in line with industry best practice and that Conico was damaged by the failure to drill planned wells. The total amount of the disputed invoices is C$1,419,203 (approximately A$1,575,315). Cartwright currently holds a bond in the amount of C$300,000 on behalf of Conico.
In the arbitration, Conico will seek to recover substantial damages from Cartwright.
Concurrently, Conico today released initial results from this year’s drilling in Greenland. During the Greenland field season, a total of 11 diamond drill holes were drilled on four individual targets at the Ryberg Project targeting Cu-Ni-Au platinum group element (PGE) mineralization on the Sortekap, Miki, Cascata and Pyramid properties. Assay results are now available for nine of the eleven drill holes and confirm the presence of Cu-Ni-PGE mineralization in veins on the Miki and Sortekap properties and Au mineralization in a previously unknown zone of quartz veins on the Sortekap property.
Results from the Miki prospect have confirmed that the Miki trench is in principle a “fertile target” and hosts highly anomalous grades of copper, nickel and platinum group elements. The better results include: MIDD011: 6.00 m @ 0.27% Cu, 0.06% Ni and 0.31 g/t 3E1 from 191 m; MIDD012: 1.00 m @ 0.55% Cu, 0.11% Ni and 0.78 g/t 3E over 77 m; MIDD013: 8.00 m @ 0.22% Cu, 0.04% Ni and 0.22 g/t 3E from 134 m; MIDD014: 9.72 m @ 0.17% Cu, 0.07% Ni and 0.20 g/t 3E from 55 m.
At the Sortekap property, diamond drilling also demonstrated the potential for nickel, copper and PGE mineralization, as well as orogenic gold mineralization. Significant intercepts include SODD004: 3.28 m @ 0.41% Cu, 0.07% Ni and 1.12 g/t 3E over 105.5 m; (including 1.00 m @ 0.83% Cu, 0.11% Ni and 2.49 g/t 3E over 105.5 m) and SODD006: 7.00 m @ 0.23 g/t Au from 395 m.
Guy Le Page, Executive Director, commented, “Exploration work in 2022 has tested only 3.5 kilometers of the approximately 50 kilometer Miki Trench and has successfully encountered anomalous copper, nickel and PGE highlights. Drilling at Sortekap has also highlighted the potential of the giant Togeda Trench, which hosts similar mineralization types in addition to orogenic gold mineralization. The Ryberg project remains untested and we now look forward to results from the Mestersvig project, where the 2022 drilling campaign intersected a series of lead-zinc intervals along strike from the historic Blyklippen mine.”
Although the mineralization discovered in the 2022 drilling was generally low-grade, Conico considers the season and the new data collected to be a very successful outcome, it adds.
Conico has now received all drill core from the 2022 Ryberg and Mestersvig drill holes at its facilities in Portugal, as well as rock samples collected at the Mestersvig project. Assaying of the Mestersvig drill core and rock samples is a high priority, with results expected in December. Samples from the Ryberg drill holes that were not sampled on site will also be processed in the coming weeks. Results from the Mestersvig project are expected shortly.
Conclusion: Shareholders’ frustration with Conico’s share price decline is currently being discharged in the forums. The dispute with the drilling service provider marks a negative climax, even though the dispute had already been foreshadowed in view of the significant deviation from the planned drilling scope. One would think that now, however, all the bad news is slowly on the market. The fact that the stock fell only 10% on the news of the dispute with the drilling company suggests that the event was essentially already priced in. Now the results from Mestersvig are still to come. The results of the latest drilling at Mt. Thirsty are also still missing.
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