This is the second in a 2-part feature series.
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 goal to discover ‘high-value’ gold and nickel sulphide deposits across a portfolio of ‘highly prospective’ projects located on major mineral belts of Western Australia.
As reported in the first part of this series, the Perth-based mining company is eyeing a major prize within what is an underexplored yet well-known mining region.
Western Mines’ flagship asset is the Mulga Tank Ni-Cu-PGE Project – a major dunite ultramafic complex that has shown significant evidence for a working sulphide mineral system and is considered ‘highly prospective’ for Ni-Cu-PGE mineralisation.
As explained in part one, what differentiates the company from other nickel exploration plays is the major komatiite-hosted nickel system the company has within its portfolio.
Managing Director Dr Caedmon Marriott says ‘world-class’ examples of komatiite-hosted nickel deposits include Mt Keith (643.7Mt @ 0.58% Ni), Perseverance (50Mt @ 2.3% Ni), and Kambalda (35 million tonnes @ 3.1% Ni).
He adds that what is especially exciting for Western Mines is the similarities the rocks at Mulga Tank have with those hosting Perseverance and in particular BHP’s (ASX:BHP) Mt Keith nickel operation.
In fact, they are actually nearly identical.
Mulga Tank the new nickel frontier
Mulga Tank, while sharing similarities with Mt Keith, is appearing to be the new nickel frontier in Western Australia. It’s an asset within a mining jurisdiction with plenty to offer Western Mines.
Marriott says having the company’s flagship project in an overlooked portion of the eastern Yilgarn Craton is an attractive mining and investment proposition for a myriad of reasons.
Western Australia, he says, is obviously a well-known major nickel (and gold) mining jurisdiction with some globally renowned nickel mines/camps such as Mt Keith, Perseverance, and Kambalda. Also, it’s safe and a region that is easy to operate in.
The MD adds that having a komatiite-hosted nickel deposit within its portfolio is a prize worth chasing. Komatiite is a type of ultramafic magma that by far the majority of nickel deposits in WA form in, such as the examples of Mt Keith, Perseverance, and Kambalda.
“So, the reference here is that it’s really potentially the same as all those, and the same as the Agnew-Wiluna Belt but it hasn’t really previously been recognised.
Whilst a lot of the region is very well explored and/or large parts of the Agnew-Wiluna Belt, about 300-400km northeast of us, around Mt Keith are owned by BHP we are calling Mulga Tank “frontier” because it is underexplored and the industry is starting to look for nickel (and all metals) where previously it has been less explored and under sand cover as you move further east from Kalgoorlie.
For various reasons people previously thought that only komatiites from one particular age and belt were mineralised but it has increasingly been shown that various belts around WA including Mulga Tank are mineralised. So, Mulga Tank is attractive for us as we’ve secured the entire Minigwal Belt, which is a great opportunity/remarkable for a little company like us – that is, we couldn’t go to Agnew-Wiluna and get anything like the same land position and prospectivity.”
Seeking nickel sulphides
The MD notes that there are komatiite-hosted nickel deposits in other regions like Canada but in general most other nickel sulphide deposits are mafic intrusion-related. Then there is the whole category of nickel laterite deposits, which are surficial weathering related deposits that are commonly found in Indonesia and the Philippines, and Murrin Murrin in WA.
Nickel laterite is considered difficult, he says.
“So, in general if you want to be in nickel in WA, you want to be looking for nickel sulphide and for that your best bet is komatiite rock/systems.”
“So, in general if you want to be in nickel in WA, you want to be looking for nickel sulphide and for that your best bet is komatiite rock/systems”
Western Mines certainly wants to be in nickel in Western Australia and is well-funded to continue looking for nickel sulphide with its current drill program. It is chasing a really big prize amid sound fundamentals for the nickel market.
Nickel prices have soared since the start of last year and in H1 2022 prices averaged just under US$27,860 per tonne, up more than 59% YoY. GlobalData forecasts nickel prices to remain high in 2023 and production is expected to also grow YoY.
Enter, Western Mines Group and Mulga Tank.
Large-scale ultramafic complex
The Mulga Tank Project comprises exploration licence E39/2132 and exploration licence applications E39/2223 and E39/2299, covering an area of 395km-square. The project is located 190km east-northeast of Kalgoorlie in the Eastern Goldfields Province of the Yilgarn Craton.
Tenement E39/2132 contains the entire Mulga Tank Dunite Intrusion, a major ultramafic complex, considered ‘highly prospective’ for Ni-Cu-PGE magmatic sulphide mineralisation. The larger project area contains a 12km trend of interpreted ultramafic bodies and potential komatiite channel system extending from the Mulga Tank intrusion that has received little to no exploration focus to date.
The company completed a capital raise of $693,750 via a placement in November and received a $220,000 Exploration Incentive Scheme (EIS) award from the WA government to Drill Mulga Tank last year.
The proceeds of the placement will fund the company’s ongoing exploration programs including supporting and expanding the phase two diamond drilling program at Mulga Tank.
Addressing the EIS financing, Marriott says it is definitely a handy contribution.
“The EIS is a very competitive process with projects ranked against each other by an independent panel of experts. So, we like to think the award both represents the technical merit of our proposal (we know what we’re doing) but also the potential those holes have to open up a whole new nickel belt.
The EIS grant of $220,000 represents about 25% of the drilling budget for phase two so it’s a great contribution to the funding of a small company like us and really allows us to drill extra holes we may not otherwise have done.
“We are currently well-funded for the current drill program this year with over $2 million in the bank”
We are currently well-funded for the current drill program this year with over $2 million in the bank but at some point, in order to embark on a big phase three drill program, we may need to look at a capital raise.
But that might not be until the middle of the year so we’re well enough funded for what we want to do right now.”
Commenting on the aforementioned placement at the time, Chairman Rex Turkington noted Western Mines was hoping to build a long-term relationship with mining investment group Equentia Natural Resources, which came on board as a new cornerstone investor.
Equentia Natural Resources is a commodity trading and mining investment group based in Singapore. The group is currently diversifying into mining investments both in physical assets and mines, as well as strategic investments into junior mining and exploration companies, particularly in the nickel and battery metals space.
According to the MD, it’s critical that the company continues to invest capital into Mulga Tank to adequately investigate just how lucrative the prize will ultimately be.
“We may be spending more money than other junior companies but it’s a big prize that we’re after”
Marriott adds that many times a junior exploration company would opt to not spend a tonne of money on exploration as the prize being chased is not considered sizeable. However, the Western Mines’ whole Mulga Tank Ultramafic Complex could present the company the ultimate prize.
The Mulga Tank Ultramafic Complex could potentially be large enough to fit about 30 Mt Keith orebodies in it.
The MD explains: “I think that speaks to the scale of the ultramafic complex we’re exploring. We’re not saying it’s going to be 30 times the size of Mt Keith but if Mt Keith’s the biggest and there’s room to find 30 in there, maybe we could find half in one corner and it would still be a pretty good discovery!
We may be spending more money than other junior companies but it’s a big prize that we’re after.”
Write to Adam Orlando at Mining.com.au
Images: Western Mines Group Ltd
