The drill rig is scheduled to arrive at site early next week to carry out over 2,500 metres of diamond drilling over the next 6-7 weeks.
Adding interest, this program will test at least seven high value drill targets selected by geophysical advisors Newexco, which were instrumental in the discovery of some of Western Australia's biggest nickel discoveries such as Nova, Spotted Quoll and Flying Fox.
There is a similar geology to Forrestania and Agnew-Wiluna discoveries.
This is a drawcard for investors given the renewed interest in nickel exploration in Western Australia - in the Fraser Range following Independence Group's (ASX:IGO) move to acquire Sirius Resources (ASX:SIR), which owns the Nova deposit, for $1.8 billion.
In addition, the large scale nickel prospectivity of the project was recognised by former farm-in partner BHP Billiton (ASX:BHP) with systematic exploration continuing to confirm the geological factors required for large scale nickel sulphide mineralisation.
Previous drilling at East Laverton, which is located in an under-explored area where large discoveries are still possible, has intersected very thick intervals of disseminated nickel sulphides.
The targets to be drilled in the current program include strong electromagnetic conductors with favourable geological and structural features which reinforce their potential to represent massive nickel sulphide deposits.
"This drilling campaign will give us an excellent opportunity to confirm the potential of our Project as a large scale nickel sulphide camp," executive chairman John Prineas said.
"We have a suite of expertly developed targets to test, and any one of these could deliver a major discovery.
"We will have very strong news flow over the coming weeks as drilling progresses and results become available."
Earlier this month, the company completed new three-dimensional modelling that identified the local basal contact position of the ultramafic channel that hosts DDNRC002.
Drill hole DDNRC002, completed by St George in 2012, lies within the Desert Dragon North prospect area and intersected 2 metres at 1.08% nickel from 55 metres and 2 metres at 0.43% nickel from 59 metres.
A litho-geochemical analysis of this mineralisation indicates the presence of a high Iridium/Palladium ratio, which points to the massive nickel sulphide stringer veins being primary and not remobilised nickel mineralisation.
This indicates that mineralisation in DDNRC002 is likely to be a fragment of a locally situated, larger body of massive sulphides.
Modelling of exploration data at Desert Dragon Central, where a hole drilled by BHP in 2012 intersected 18 metres at 0.40% nickel from 100 metres, indicates two ultramafic units in the channel with three untested EM conductors, two of which are situated in a basal position.
The presence of two ultramafic units is known to occur in highly mineralised nickel sulphide belts. Examples include the Leinster and Cosmos nickel camps at the Agnew-Wiluna belt.
EM surveys completed by St George at Desert Dragon Central have identified 'Dragon 8', a strong EM conductor with a time constant of 190ms and a conductance of 3500 Siemens, which is distinctive of massive nickel sulphides.
This is a relatively short EM conductor of 500 metres strike length. Significantly, the conductor is in contact with the western margin of a positive gravity feature which is interpreted to reflect a concentration of dense sulphide-rich rocks, which may include massive nickel sulphides.
Other additional targets are three strong EM conductors which are proximally situated to the thick zone of disseminated nickel sulphides encountered in drill hole DRAC35 (18 metres at 0.4% nickel from 100 metres including 4 metres at 0.57% nickel from 100 metres).
Disseminated nickel sulphides of this kind can be a peripheral indicator of a massive nickel sulphide deposit.
East Laverton Nickel Sulphide Project
St George Mining holds a dominant 2,000 square kilometre landholding in this frontier region of Western Australia.
While BHP withdrew from the farm-in for corporate reasons, it left the company with a 100% ownership of all nickel rights as well as a $3 million dataset.
The mining giant's work also established the credentials of the project for large scale nickel sulphide mineralisation and interest from major mining companies continues.
Subsequent work by St George has proven the presence of geological criteria required to host multiple nickel deposits.
The Project has similar features to other highly mineralised komatiite nickel sulphide belts in the Yilgarn Craton.
With local and global investor attention now firmly on Western Australia, the Fraser Range and an emerging nickel province, St George's drilling program has uncanny timing.
Any of the targets to be drilled under the 2,500 metre program could deliver a major discovery, which will in turn confirm the East Laverton Project's potential as a large scale nickel sulphide camp.
First assay results are expected in mid-July with further results over the following 4-6 weeks.
Success will significantly re-rate the company given its low market cap of circa $8 million and tight share register.
The project has already been significantly de-risked by BHP's previous work, which indicated its potential to host large scale nickel sulphide mineralisation.
This was supported by subsequent systematic exploration that confirmed required geological factors for a potential major discovery.
Further upside is possible in the event of success given the company's dominant landholding of more than 2,000 square kilometres in the region.
Nickel explorers have already proven that they can create outstanding shareholder wealth with Independence Group's recent $1.8 billion acquisition bid for Sirius, which had a market cap of $8 million at discovery, highlighting this.
Another notable example is Western Areas (ASX:WSA), which had a market cap at IPO of $7.4 million and is now worth over $800 million.
St George has already received approaches from potential cornerstone investors, including other major mining companies.
Share Price Catalysts
- Results from diamond drilling program (from mid-July);
- Receipt of estimated $800,000 Research and Development tax rebate (September 2015);
- Signing up a cornerstone investor; and
- Identifying further targets at multiple prospects.
In short, St George is ready and primed. Bring on drilling.
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