Explorer and miner LCL Resources (ASX:LCL) is looking to consolidate its Papua New Guinea nickel sulphide trend through the acquisition of 2 new exploration licences.
The company has executed a binding tenement sales agreement with unlisted public Papua New Guinea explorer Papuan Minerals to acquire exploration licences EL 2391 and EL 2560.
LCL says when combined with its existing exploration licences, and with its recent deal to expand its Veri Veri Nickel Project (as announced by the company in June this year), this acquisition of the Papuan licences secures its control of a ‘significant’ region prospective for nickel mineralisation.
The $24.62 million market capitalisation company reports that EL 2391 is host to the Doriri nickel-palladium-platinum-cobalt target, which lies only 10km from Veri Veri. The Iyewe nickel target is located within an equal distance of Doriri and Veri Veri.
The close proximity of these 3 targets represents a ‘compelling’ and priority regional target for nickel sulphides, according to LCL.
This belief is supported by the fact each target resides in ultramafic intrusive lithologies of the Papuan Ultramafic Belt (PUB) proximal to the Keveri Fault Zone.
As a result, a detailed review of the Papuan licences has begun and is hoped to provide further details of targets and prospectivity once the information is confirmed to JORC 2012 standard.
However, the completion of each acquisition is subject to the transfer of titles of each of the Papuan Licences to LCL, as well as the completion of due diligence by LCL on the licences within 30 days of signing.
Key terms of the agreement include the issue of over 7.239 million fully paid LCL ordinary shares to Papuan on the completion of the transfer of tenement EL 2391 to LCL, as well as the issue of more than 2.413 full paid shares on the completion of the transfer of EL 2560.
Other terms include Papuan being granted a 2% net smelter royalty (NSR) on minerals extracted from the Papuan Licences. However, LCL has the right to purchase, at any time, the royalty over EL 2391 for a cash payment of $1.25 million.
Commenting on the acquisition, LCL Resources Managing Director Jason Stirbinskis says: “We now hold the dominant position across the ultramafic lithologies in the south of PNG. These units are highly prospective for nickel mineralisation, as evidenced by our Veri Veri nickel sulphide project, the established Iyewe and Doriri targets, and large nickel stream sediment anomalies at Wedei and Safia.
“We now have a 3,400km-square parcel of ground in southern PNG which captures prime nickel sulphide and laterite targets“
We also note the potential for nickel laterites, particularly in the northern region, near the advanced Wowo Gap Nickel Project, northeast of our boundary. The company has commenced a detailed review of the Papuan licences and is assimilating the data into our regional targeting models. We now have a 3,400km-square parcel of ground in southern PNG which captures prime nickel sulphide and laterite targets.
Our footprint also captures over 130km of the Keveri Fault Zone, an established controlling structure for known nickel sulphide mineralisation within Papuan Ultramafic Belt lithologies. Copper-gold mineralisation at the company’s Ubei and Liamu projects and the Urua Cu-Au complex, acquired in the Papuan transaction, are also interpreted to be controlled by elements of the Keveri Fault Zone.”
LCL Resources currently holds a portfolio of projects considered prospective for copper, gold, and nickel within the island nation of Papua New Guinea.
These projects include the Ono, Veri Veri, Tauya, and Imou projects.
LCL Resources had $5.8 million cash at hand as of 30 June 2023, according to its latest quarterly report.
Write to Adam Drought at Mining.com.au
Images: LCL Resources
