Daly Resources Backed by ERM Review Flagging 22 Zinc Targets at Batten Project
Key Takeaways
- ERM's independent review defined 22 targets across the 1,124 km² Batten Project, with eleven ranked Priority 1 and several never drill tested.
- Hot Spring (Targets 3 and 19) is the endorsed lead target, with soil sampling complete, environmental approval for drilling in place and results due within weeks.
- Nine of eleven Priority 1 targets, including the five highest scorers, cluster in the south between Hot Spring and the 12 km Berjaya Corridor.
- Daly interprets the Bald Hills Fault, which controls HYC and Teena, as continuing beneath the Berjaya Corridor, an untested view that field work and geophysics must now confirm.
- Securing a rig before the wet season is the key near-term catalyst, and the announcement contains no new drilling or assay results.
Independent ERM review confirms Hot Spring as priority and flags 22 Batten targets
An independent regional appraisal by ERM of the 100%-owned Batten Project in the Northern Territory has defined 22 targets, eleven of them ranked Priority 1, across the 1,124 km² project. Daly Resources (ASX: DLY) released the outcomes on 13 October 2026.
ERM is a global consultancy with specialist mining geology and mineral resource capabilities. The review was undertaken by geologists with direct field and research experience in the sediment-hosted zinc systems of the McArthur Basin.
The review endorses Hot Spring as the Company’s priority target at Batten. It also highlights a new standout area, the approximately 12 km Berjaya Corridor, a belt of airborne electromagnetic (AEM) conductors at the Barney Creek Formation position, the host to the HYC (McArthur River) and Teena deposits.
For investors, the point is depth of pipeline. Behind Hot Spring sits a set of ranked targets, and the announcement states that several priority targets have never been drill tested.
Mike Edwards, Executive Chairman
“We engaged ERM, a team with deep hands-on experience of the McArthur River district, to take a fresh, independent look at Batten, and the outcome has been very positive. […] the result is a pipeline of high-priority targets backed by geophysics, geochemistry and geology that will be keeping the team busy.”
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How ERM identified the priority targets
ERM re-examined decades of historical exploration data using a mineral systems approach. That means focusing on the fluid pathways, chemical traps and outflow signatures that control where HYC-style mineralisation sits.
Each target was scored on host stratigraphy, AEM response, surface geochemistry and structural setting. Targets were downgraded where historical exploration was considered to have adequately tested them.
Three lines of evidence
The priority targets are defined by the coincidence of three independent lines of evidence:
- Electromagnetic geophysics: historical AEM surveys (QUESTEM, GEOTEM, TEMPEST and VTEM), compiled and reprocessed by CSIRO and the Northern Territory Geological Survey, were re-interpreted by ERM.
- Geochemistry: arsenic, antimony, cadmium and thallium correlate with known mineralisation in the district and are considered effective pathfinders at Batten.
- Geology: prospective Barney Creek Formation at explorable depth, synclinal or fault-bounded sub-basin geometry, and proximity to growth faults that may have acted as conduits for mineralising fluids.
When three separate datasets point to the same ground, the case for a target is stronger than any single dataset could make it.
Clustering in the south
The highest-ranked targets are concentrated in the south of the project, between Hot Spring and the Berjaya Corridor. Nine of the eleven Priority 1 targets lie in this area, including the five highest-scoring targets (Targets 9, 3, 10, 15 and 19).
The announcement links the clustering to the Barney Creek Formation at or near surface, discrete AEM conductors and a structurally complex setting where the Tawallah, Hot Spring and Bald Hills fault systems converge.
What is a sediment-hosted zinc system, and why does AEM matter?
Daly is exploring for McArthur River-style zinc-lead (silver) mineralisation, a sediment-hosted style described in the announcement as SEDEX-style. The principal target horizon is the Barney Creek Formation, a carbonaceous and sulphidic shale unit that is inherently conductive.
AEM surveys fly over the ground and measure how well rocks conduct electricity. Conductors can therefore help map where that shale lies, with thickened sub-basin sequences expected to produce stronger responses.
Conductivity is a targeting tool, not proof of mineralisation. ERM notes that older AEM surveys are comparatively noisy, that some responses may reflect cover or non-mineralised conductive stratigraphy, and that the features require geological, geochemical, geophysical and ultimately drill testing.
Berjaya Corridor and the Bald Hills Fault reinterpretation
The Bald Hills Fault is the second-order structure conventionally interpreted to control the position of the HYC and Teena deposits. Its westward continuation onto Daly’s tenure has been poorly defined.
Daly now interprets the fault to be offset by a north-east-trending cross-fault, continuing north-west beneath the Berjaya Corridor. This is Daly’s interpretation, and it remains to be tested by the current field program and by follow-up geophysics.
If correct, it places the corridor on the offset westward continuation of the structure that controls HYC and Teena. The corridor comprises Targets 15, 9, 6 and 5, all Priority 1, and includes Target 9, the highest-ranked target in the review.
| Target | Setting | Drilling status | Key feature |
|---|---|---|---|
| Target 15 | North-western end of corridor, on a splay of the Tawallah Fault | Not stated in the announcement | Priority 1 conductor at the interpreted junction of the Bald Hills Fault continuation with the Tawallah Fault; retained on structural setting |
| Target 9 | Directly on the interpreted Bald Hills Fault continuation | Historical diamond hole (BJD04) drilled just south of the conductor, to approximately 300.2 m, did not reach Barney Creek Formation | Strongest conductor in the corridor and highest-scoring target in the review |
| Target 6 | Syncline cored by Hot Springs Member | Not drilled; historical hole BJR03 to the south intersected Barney Creek Formation from approximately 30 m | Priority 1 conductor with a geochemical anomaly to the south |
| Target 5 | Under cover at the south-eastern end of the corridor | Not stated in the announcement | Defined in the older QUESTEM AEM survey rather than the TEMPEST data |
On Target 9, ERM interprets the missed formation as evidence that the Barney Creek Formation dips more steeply and lies deeper than previously modelled. That may indicate a rapid change in stratigraphic thickness approaching a sub-basin, the key target geometry for HYC-style mineralisation.
Three further Priority 1 targets lie close to the corridor:
- Target 10: an AEM conductor immediately north of the corridor’s eastern end, near the junction of the Bald Hills Fault and the interpreted cross-fault.
- Target 16: an AEM conductor north of the corridor at a complex fault junction that links to the Bald Hills structure.
- Target 22: an AEM feature across an interpreted fault-bounded syncline west of the corridor, which ERM interprets as a possible graben or pull-apart sub-basin.
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Hot Spring and next steps
Hot Spring comprises two targets, Target 3 and Target 19, and neither has recorded historical drilling. Target 9 achieved the highest individual score in ERM’s ranking, but Hot Spring is more advanced, with soil sampling completed and environmental approval for drilling in place.
Results from the recently completed Hot Spring soil survey are expected in the coming weeks. The Company is seeking to secure an appropriate rig to test the target prior to the onset of the wet season.
A Daly field team is currently on the ground at Batten, undertaking reconnaissance of the priority regional targets. The objective is to rapidly assess and rank them so the most compelling can advance to soil geochemistry, geophysics and, ultimately, drill testing.
ERM-recommended further work includes:
- Field geological and sedimentological mapping
- Soil geochemistry
- IP surveying where warranted
- Drill testing of prioritised targets where justified
- Consideration of ZTEM/MT for improved regional basin interpretation
The near-term catalysts are the Hot Spring soil results and the Company’s effort to secure a rig. No drilling dates or results have been announced, and the announcement reports no new drilling, sampling or assay results, so nothing here points to a discovery or resource.
Daly holds more than 6,500 km² of granted tenure across the Northern Territory in three project areas: Huckitta, Broughton and Batten. A 1.5% net smelter return royalty in favour of Sandfire Resources exists over EL26831, EL28656 and EL30156 at Batten.
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