St George Mining (ASX:SGQ) has started a drilling program to test massive nickel sulphide targets at its under-explored East Laverton project in Western Australia that is expected to be closely watched.
This 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.
More than 2,500 metres of drilling will be carried out on the targets, each of which has the potential to be a new discovery.
The targets includes conductors that have EM signatures consistent with the response from massive nickel sulphides as well as favourable geological and structural features that cross-validate their potential to represent massive deposits.
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.
The drilling campaign is scheduled for completion within 6-7 weeks with progress reports to be provided throughout the course of the campaign.
"We are drilling high quality targets that have been carefully selected following a very sophisticated and detailed analysis of exploration data by our technical team, which has a formidable combined track record in nickel sulphide targeting," executive chairman John Prineas said.
"The sense of anticipation throughout the drilling campaign will be very high as any one of these compelling targets could deliver a game-changing major discovery."
St George recently raised $1,050,000 through an oversubscribed placement of 15,000,000 shares at $0.07 per share.
The first two targets to be drilled are the Aphrodite and Cambridge nickel prospects with others to be decided as the campaign progresses. This excludes the last target, which has already been selected.
One diamond core hole is planned for each target, with additional holes to be planned subject to exploration results.
The nickel sulphide target to be drilled last in the order of drilling will be the standout EM conductor at Desert Dragon Central - Dragon 9.
This EM conductor has very strong conductance of 4900 Siemens and an exceptional time constant of 443ms, indicating a very thick conductive body.
It is modelled by Newexco as a discrete EM plate situated in a favourable structural setting for the deposition of nickel sulphides. The potential for a massive nickel sulphide deposit is very promising.
Cambridge Nickel Sulphide Prospect
Drilling will begin at the Cambridge Prospect, which comprises a large ultramafic dunite body with dimensions of approximately 4 kilometres by 2 kilometres.
Limited exploration by BHP Billiton and St George at this prospect has encountered a major high MgO zone in the upper eastern portion of the dunite that resembles the central dunite lens at the Perseverance nickel sulphide deposit at Leinster.
Perseverance, one of the largest high grade nickel sulphide deposits in the world with more than 1.4 million tonnes of contained nickel, is hosted on the basal contact of a large ultramafic dunite body.
A deep diamond core hole will be completed at Cambridge to a depth of 500 metres to test the contact of the high MgO zone below and laterally from the areas that have already been drill tested.
It will also be the first drill hole at Cambridge at which a downhole EM (DHEM) survey will be completed.
Previous reverse circulation drilling suggest that only the top of an olivine adcumulate zone has been drilled, and that the basal contact of this zone which is prospective for nickel sulphides remains to be tested.
Aphrodite Nickel Sulphide Prospect
The Aphrodite nickel sulphide prospect is a very late-time EM conductor identified by Newexco and modelled as EM plate APH_05.
The conductor has a time constant of 176ms and conductance of 2947 Siemens signifying a highly conductive body that is consistent with massive nickel sulphides.
This is situated in a structural setting that is favourable for the potential concentration of massive nickel sulphides.
Aphrodite 4 presents as a textbook example of a potential nickel sulphide deposit. Drill hole AP_05, planned to a depth of 300m, will test the centre of this EM conductor.
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.
All eyes will be on St George Mining with the start of its well-timed nickel sulphide drilling campaign at the East Laverton project.
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.
The company is leveraged to exploration success given its low market cap of circa $9.7 million and tight share register.
Already, it has received strong support from investors in its recent oversubscribed capital raising of $1,050,000 at $0.07 per share that comes on the back of Independence Group's (ASX:IGO) recent $1.8 billion acquisition bid for Sirius Resources (ASX:SIR), which owns the Nova deposit.
This is clear potential for nickel explorers to create shareholder value and the company 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.
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