Austral, the owners of Anthill mine, told the ASX that drilling has commenced at Lady Colleen with observations of both oxide and sulphide mineralisation.

Lady Colleen is located on an existing Mineral Lease and contains a JORC Mineral Resource Estimate of 7.9 mt at 0.84% copper, as calculated in 2013 by the previous mine owner.

Austral Resources said it has commenced work to re-evaluate the current global resource, with a focus on the current sulphide resource.

The intent is to determine the potential for a lower tonnage, higher grade resource that could be economically open pit mined.

Austral told the ASX it had completed update and re-calculation of the Lady Colleen sulphide resource by an independent resource geologist, confirming the continuity of the higher-grade core.

It said pit shell evaluation of the updated sulphide resource with positive results warranted further detailed mine design and economic evaluation, and they designed a drilling program with multiple targets now in progress.

Austral's nearby Mt Kelly copper oxide heap leach and solvent extraction electrowinning plant has a nameplate capacity of 30,000tpa of copper cathode.

Its Anthill oxide copper mine has an Ore Reserve of 5.06Mt at 0.94% copper and the company expects to produce 40,000t of copper cathode over the next four years.

Austral have signed a deal with Glencore which can earn an interest of up to 65 per cent in Austral's exploration permits surrounding Lady Loretta zinc, lead, silver mine and Austral's Lady Annie copper mine by spending $6.3 million in the area over four years.

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