This article is a sponsored feature from Mining.com.au partner Western Mines Group Ltd. It is not financial advice. Talk to a registered financial expert before making investment decisions.
Western Mines Group (ASX:WMG) has a strategy to discover ‘high-value’ nickel sulphide and gold deposits across its portfolio of assets located on major mineral belts in Western Australia.
The Perth-based exploration company is eyeing a major prize with its flagship asset, the Mulga Tank Ni-Cu-PGE Project, within an underexplored part of the world class Eastern Yilgarn nickel province.
Mulga Tank is a major dunite ultramafic complex where recent exploration results show significant evidence for a major komatiite-hosted nickel sulphide mineral system and is considered ‘highly prospective’ for Ni-Cu-PGE mineralisation.
As Managing Director Dr Caedmon Marriott explains to Mining.com.au, Western Mines is building momentum at Mulga Tank, which despite the fickleness of the market, the company is being rewarded in kind.
“We don’t use the ‘big D’ word lightly, but recent results at Mulga Tank validate our long-held belief in the project and clearly demonstrate the ‘discovery’ of a significant nickel sulphide mineral system”
“We don’t use the ‘big D’ word lightly, but recent results at Mulga Tank validate our long-held belief in the project and clearly demonstrate the ‘discovery’ of a significant nickel sulphide mineral system throughout the complex.
We’ve been using the word confirm a lot and now we’re more inclined to use discovery and obviously what we’ve found here is very big, a very large low-grade nickel sulphide system, which is something we’ve been championing all along. It’s that whole Mt Keith thing.”
Mt Keith and the responding market
Mulga Tank is a major dunite ultramafic complex where recent work shows significant evidence for a working sulphide mineral system similar to nearby world-class examples such as Perseverance and Mt Keith in particular.
Low-grade disseminated sulphide ore is mined from the Mt Keith nickel mine, which is a large open-pit operation. The ore is processed through large concentrators and dryers as part of BHP’s (ASX:BHP) mine-to-market integrated nickel business Nickel West.
On 5 April the company enjoyed an almost 170% surge on the Australian Securities Exchange (ASX) after an ‘extensive’ nickel sulphide discovery at Mulga Tank. The company’s share price has risen almost fivefold from $0.15 since the start of January this year.
Recently the share price has hovered at about $0.760, giving the company a market capitalisation of more than $45 million.
Marriott tells this news service the company is proving to be on track to unveil the next nickel ‘discovery’ – a term the MD does not use loosely.
“We’ve been putting out quite a lot of announcements with titles that `confirm’ previous results and `confirm’ our long-held view on the prospectivity or potential of the project. We even put out the full hole visuals for hole MTD023 in February/March with 600m of disseminated sulphides but the market very much takes a wait and see approach and didn’t react until assay results on 5 April.”
To that extent, many would describe the market at times to be fickle. However, the MD says the company remains focused on what it can control. As such, it is continuing to roll out its exploration program and release the results along the way.
“In many ways the market reaction perhaps mirrors our own thinking”
“In many ways the market reaction perhaps mirrors our own thinking. We have been deliberately waiting and waiting to put the word ‘discovery’ in the announcement title until we were confident in what we had. Some companies use it fairly liberally to describe exploration results but we don’t use it lightly at WMG and have been saving it for the right time. People love to chase a discovery and true discoveries are rare. Even then it’s the discovery of a significant nickel sulphide mineral system – not yet claiming to be a mine or a deposit.
We also deliberately made two announcements – the first on 5 April, provided the spark, with MTD023 assays results confirming ~700m of nickel mineralisation we’d seen visually in the hole, and the second on 6 April, we announced initial aqua regia test results to start to show this isn’t just low-grade nickel in silicate and that it was largely nickel in sulphide.”
The MD adds in the past 6 weeks alone the company has gone through a validation process and is now really starting to see concrete evidence of what previously has been only speculated on.
As the market would expect from a junior explorer, Western Mines continues to be open and transparent with its announcements to the ASX and the detail and data contained in those and has made a conscious effort to not overplay its results.
Hence the reluctance until now to refer to Mulga Tank as a discovery.
Validation and vindication
Marriott adds that the recent rise in the company’s valuation has ‘completely’ validated Western Mines’ exploration and growth strategy while he’s been at the helm.
“We’ve been nearly entirely focused on Mulga Tank since our IPO just under 2 years ago. We have always seen it as a very prospective nickel project and now results are really starting to demonstrate that.
In terms of exploration strategy – we did something very different to what everyone else has done previously – with help from the EIS grant, we changed the search space, we went and drilled a huge 1,400m hole right in the centre, rather than repeating previous cheaper shallow drilling around the edges, it took a lot of confidence and it paid off.”
The MD says the fact that Mulga Tank Project is a new nickel discovery seems to be resonating with existing and prospective investors, and the wider market in general.
This validation from the market was evident in mid-April when Western Mines completed a capital raising via a placement to raise about $2.73 million. The placement was for more than 8 million ordinary fully paid shares at $0.34 per share.
Proceeds are being deployed to expand and accelerate the diamond drilling program at Mulga Tank and additional working capital.
“Nickel is a great metal to be in, it’s a key battery metal playing into that theme and the transition to EVs, and there aren’t too many nickel companies around”
“Nickel is a great metal to be in, it’s a key battery metal playing into that theme and the transition to EVs, and there aren’t too many nickel companies around. Even though results to date are considered low grade, the key is its sulphide and its potentially huge and so I think the fact it could be so big, or globally significant, resonates with one half of the market.
The other half of the market will always be quick to dismiss or fail to understand very large, low-grade nickel sulphide. Many confuse it with nickel laterite, which is at least four times more energy/CO2 intensive and difficult to produce. Others don’t realise the economies of scale in mining something of this size versus high-grade massive sulphide deposits (we have the potential to find high-grade massive sulphide at depth as well).
Massive sulphide deposits are much, much smaller in comparison and require ~2% Ni to be economic whereas only large, disseminated deposits have the ability to produce 30-50,000t of nickel per year for multiple decades – just ask BHP.”
According to Monash University, the world has 2 major reserves of nickel ore types – sulphides (40%) or laterites (60%). Most historical production has come from sulphide ores, with lesser production from laterite ores.
Nickel laterite ores are metallurgically complex and not readily amenable to concentration, pyrometallurgical smelting, and refining to metal. As such, alternative technology is required, such as intensive ammonia leach technology or more complex high pressure acid leach (HPAL) processing combined with solvent extraction and electrowinning.
Therefore, overall, data shows that due to various complexities, the work and effort to produce nickel metal from laterites requires higher energy and greenhouse emissions per tonne of nickel metal.
Generally, Monash University notes, production of nickel from sulphide ores involves either open cut or underground mining, followed by concentration via flotation, smelting of concentrates to produce a nickel matte, finally leading to refining of matte to produce a pure metal. Mines, smelters, and refineries are commonly found in different locations, depending on local geographic factors.
Extensive disseminated nickel sulphide mineralisation
As the MD explains, during Q1 2023 Western Mines’ main focus continued to be the flagship Mulga Tank Ni-Cu-PGE Project where it is beginning to unlock what could be a major nickel sulphide mineral system.
After an end of year break, the phase two drilling program restarted on 11 January 2023 with 3 further diamond drillholes completed during the period, including the first Exploration Incentive Scheme (EIS) deep hole MTD023 to a depth of 1,401m.
Following the April recent capital raise, Western Mines is expanding phase two drilling to systematically test for the extent of shallow disseminated sulphide mineralisation in undrilled areas of the complex, along with following up on remobilised massive nickel sulphide veining seen in multiple holes along the western margin of the complex.
The MD explains that each hole is often targeting both styles – seeing the shallow disseminated, which adds to the footprint of mineralisation and could be a huge, disseminated deposit, but it will also drill deeper to test the base of the intrusion looking for massive sulphide deposits.
The work program has been expanded to 14 holes with 8 additional drillhole locations selected. Marriott notes that further drillholes will continue to be added to the program with ongoing targeting work as the company systematically explores the Mulga Tank Complex with the capital available.
“The rig will now stay there for the rest of the year, drilling a new hole every 2-3 weeks depending on depth. We may look to get a second rig as well to speed things up. So they’ll be continuous, ongoing announcements filling in and finding more disseminated sulphide and all the time targeting deeper massive sulphide at depth.”
Visual observations and assay results for holes MTD022 and MTD023 were reported during the period. Assay results from EIS hole MTD023 confirmed the discovery of an extensive nickel sulphide mineral system within the Mulga Tank Ultramafic Complex.
Multiple broad intersections of disseminated nickel sulphide mineralisation were seen down the hole which cumulatively totalled 693.5m at 0.28% Ni, 128ppm Co, 61ppm Cu, 27ppb Pt+Pd.
“Assay results for hole MTD023 really back up what we saw visually, with the geochemical signatures of mineralisation we look for, such as copper and PGEs, mirroring the observed intervals of visual disseminated sulphides.”
Marriott says while the visual and geochemical results clearly indicate extensive disseminated nickel sulphide mineralisation, highlighted by accompanying elements such as copper, platinum, palladium, and sulphur, various other work has also been undertaken to confirm nickel in sulphide association.
To date, the company has completed mineralogical thin and polished section work on samples of core from hole MTD022 in order to characterise the rock types and sulphide species observed.
Marriott notes Western Mines is optimistic about what this means for the company moving forward.
“The observation of abundant coarse pentlandite in MTD022 is definitely positive for the potential of the Mulga Tank complex to host an extensive working mineral system for Type 2 Mt Keith-style disseminated nickel sulphide mineralisation”
“The observation of abundant coarse pentlandite in MTD022 is definitely positive for the potential of the Mulga Tank complex to host an extensive working mineral system for Type 2 Mt Keith-style disseminated nickel sulphide mineralisation. Also, it supports the conclusion of the aqua regia versus four acid assay results.”
A comparison of nickel assay results by four acid versus aqua regia digest has been undertaken. Four acid is considered a near total digestion technique that breaks down most silicate and oxide minerals whereas aqua regia is considered a partial digestion technique that does not dissolve silicate minerals but does dissolve soluble sulphide minerals.
The MD says the results of the comparison testwork suggests a high percentage of nickel in sulphide form versus silicate nickel, with intervals from all holes showing better than 97% similarity in results. Broad intervals of shallow mineralisation, within the top 200 vertical metres, were deliberately selected for this initial testwork, which forms the first initial steps in demonstrating a viable large open pit scenario for the Mulga Tank Project.
“These are very, very positive results and offer us encouragement to conduct further metallurgical beneficiation testwork to demonstrate the recovery of nickel sulphide into a high-grade saleable concentrate.”
Frontier exploration opportunity
Mulga Tank comprises exploration licences covering the Minigwal Greenstone Belt, 190km east-northeast of Kalgoorlie. The Minigwal Greenstone Belt is a north-northwest trending linear sequence of predominantly mafic and ultramafic lithologies.
The MD says operating in this region is strategic and is a new frontier for nickel exploration.
“It is very underexplored due to the presence of shallow sand cover and presents a frontier exploration opportunity for major nickel-copper-PGE and orogenic gold deposits.
Only 12 historical diamond drill holes had penetrated through the sand cover and any distance into the Mulga Tank Complex prior to WMG acquiring the project in 2020. We’ve drilled another 15 and of the now 27 total holes, 21 of them contain visible nickel sulphide mineralisation, that’s a pretty incredible result when considering the holes area spread over an approximately 25km-square area.
This really is a very, very large working nickel sulphide mineral system and it’s these frontier areas, often uncovered, is where you have to go to make new, potentially globally significant discoveries.”
Western Mines Group is a mineral exploration company driven by the goal to create significant investment returns through exploration and discovery of high-value gold and nickel sulphide deposits across a portfolio of highly prospective projects located on major mineral belts of Western Australia.
Its flagship project and current primary focus is the Mulga Tank Ni-Cu-PGE Project, a
major ultramafic complex found on the under-explored Minigwal Greenstone Belt. The company’s primary gold project is Jasper Hill, where Western Mines has strategically consolidated a 3km mineralised gold trend with walk-up drill targets.
The company has a diversified portfolio of other projects including Melita (Au, Cu-Pb-Zn), midway between Kookynie and Leonora in the heart of the WA Goldfields; Youanmi (Au), Pavarotti (Ni-Cu-PGE), Rock of Ages (Au), Broken Hill Bore (Au) and Pinyalling (Au, Cu, Li).
Write to Adam Orlando at Mining.com.au
Images: Western Mines Group Ltd