Perth-based Caspin Resources (ASX:CPN) is asserting its position as an emerging battery metals player as it progresses exploration at two key nickel-prospective projects in WA.
Nickel, an often-forgotten battery material, has been identified as a key area of supply chain risk due to the rapid ramp up of electric vehicle production. Currently representing just 2% of global sales, EV market share is expected to exceed 24% by 2030 according to consulting firm AlixPartners.
The metal is a preferred component in lithium-ion batteries due to its exceptional energy density, allowing for longer range, which is a key consideration for EV purchasers. Demand is further strengthened by the gradual shift away from cobalt use in batteries due to ethical concerns over African supply chains.
In February, Tesla Motor (NASDAQ: TSLA) CEO Elon Musk said “Nickel is our biggest concern for scaling lithium-ion cell production”. Earlier this year, the company signed a technical partnership deal with New Caledonia’s Goro mine in a bid to secure long-term supply.
The issue was further underlined by consultancy Rystad Energy, which has predicted that nickel may be one of the first battery materials to experience undersupply, with global demand expected to increase by 36% by 2024, exceeding global supply.
Prices for the metal have increased considerably over the past 12 months, up nearly 30% since March 2021.
Caspin’s flagship Yarawindah Brook PGE-Ni-Cu asset
Yarawindah Brook, a large strategic landholding in the emerging New Norcia PGE-Ni-Cu belt is located just 100km northeast of Perth, and 40km north of Chalice Mining’s high-grade Julimar Ni-Cu-PGE discovery which houses at least 13 shallow, wide zones of high-grade PGE-Ni-Cu-Co sulphide mineralisation.
The 400km² project, which was identified pre-Julimar and sits within the same group of host rocks, has returned ‘encouraging’ results to date despite less than 5% of the project landholding being exposed to exploration activity.
After purchasing the project in October 2020, a Stage 1 airborne EM survey was conducted over 116km² of previously unexplored land, with 15 new Ni-Cu-PGE anomalies identified.
Maiden drilling was carried out during Q2 2021, with ~1,000m of diamond drilling completed at the XC-29 target, returning anomalous levels of PGEs, nickel and copper, which the company considers a “path-finder anomaly” for massive nickel-copper-cobalt sulphides.
Key grades from hole YAD0017 included:
- 4.4m @ 0.78g/t PGE (0.52g/t Pd, 0.26g/t Pt), 0.43% Ni & 1.00% Cu from only 66.2m,
- including 0.65m @ 1.93g/t PGE (1.11g/t Pd, 0.82g/t Pt), 1.46% Ni and 1.60% Cu from 67.75m
- 0.2m @ 4.17/g/t PGE (0.95g/t Pd, 3.22g/t Pt), 3.49% Ni & 1.43% Cu from 155.97m
- 9.2m @ 0.74g/t PGE (0.35g/t Pd, 0.39g/t Pt), 0.19% Ni & 0.24% Cu from 300.85m
- including 0.7m @ 4.10g/t PGE (0.77g/t Pd, 3.33g/t Pt), 0.56% Ni & 2.01% Cu from 308.50m
The results are reinforced by historical exploration which generated results including 11m @ 1.78g/t Pd & 0.56g/t Pt. An absence of further prior work is due largely to competition with agriculture and lack of geological exposure.
Mount Squires greenfield opportunity
Caspin’s Mount Squires Project, situated next to OZ Minerals’ (ASX:OZL) West Musgrave, is an early-stage greenfield exploration project prospective for gold, nickel and copper.
The remote 750km² landholding is located 1,700km northeast of Perth, and sits along strike from Nebo-Babel, one of Australia’s largest Ni-Cu development projects housing a mineral resource of 1.47Mt of nickel metal plus 1.56Mt of copper metal.
The project is considered to be significantly under-explored due to remoteness and difficult access, and includes Ni-Cu sulphide potential on the eastern-side of the tenement area.
Major shareholders lend support to Caspin strategy
Caspin’s share register is anchored by key strategic shareholders including neighbouring New Norcia Province explorer Chalice Mining (ASX:CHN) @ 9.2%, and Chinese state-owned battery metals pioneer Tinci Materials (SHE:002709) @ 7.5%.
Veteran industry player Tinci is a leading supplier of lithium battery electrolyte and cathode materials, holding existing supplier relationships with major battery cell manufacturers including Tesla-supplier CATL, where a major deal was announced in May 2021. In June, the company revealed plans to invest USD $250 million in the construction of two new production lines to further consolidate its position as a leading industry figure.
A $9.75 million capital raise announced on 14 July was strongly supported by both Chalice and Tinci, investing $900,000 and $1.97 million respectively.
“The continued support from Chalice and increasing position of Tinci, along with strong support from existing, long-term and new investors reflects the exciting potential of the Company’s projects”
Speaking on the shareholder support, Caspin Resources Chief Executive Officer Greg Miles said: “We are very pleased with what has been a highly successful capital raising for the Company. The continued support from Chalice and increasing position of Tinci, along with strong support from existing, long-term and new investors reflects the exciting potential of the Company’s projects. The Company will hold approximately $15m in cash, putting us in an excellent position to aggressively advance exploration at our Yarawindah Brook and Mount Squires Projects.”
Moving forward with exploration
Funding from the recent capital raise is being used to pursue a 5,000m RC drilling campaign at the flagship Yarawindah Brook Project, including large step-out holes between YAD0017 and YAD0018, over approximately 1.25km of strike, along with targeting up-dip mineralisation.
The company reports that drilling is well underway, with assays pending for the campaign’s first 11 holes, additional RC targets added, and a new diamond drill rig recruited for deeper work expected to continue through until the end of 2021.
Financial support has also been secured from the Western Australian Government’s Exploration Incentive Scheme, which will assist in completing the deepest hole to date at Yarabrook Hill, providing important new geological information.
This article is a sponsored feature from Mining.com.au partner Caspin Resources Limited. It is not financial advice. Talk to a registered financial expert before making investment decisions.