Lunnon Metals (LM8.AX) has released the assay results from an RC drill program completed on the Baker zone, part of its greater Kambalda Nickel project in Australia. The Baker drilling seems to have exceeded expectations with the drill bet encountering 7 meters containing 9.22% Nickel, 8 meters containing 2.52% nickel and 6 meters containing 3.67 nickel, with all intervals pretty close to surface. And just to keep in mine, 1% of nickel represents a rock value of just over US$220/t using the current nickel price of in excess of US$10/pound.
The Baker prospect is located just about 500 meters away from the existing open pit on the project where previous operators mined the area up to a depth of around 50 meters, looking for gold. And as the Baker zone is so close to the actual open pit gold mine, St Ives retained the rights to explore for gold in that specific area of the project. And although the Baker nickel zone is located on that ‘excluded’ area, St Ives is only entitled to gold discoveries and Lunnon Metals should have no issue advancing the nickel project.
Expanding the Baker zone and actually calculating a resource could increase the value of the greater Kambalda nickel project where the company has access to three existing resources. The Warren, Foster 85H and Foster South Zone contain about 1.25 million tonnes of rock, with approximately 39,000 tonnes of contained nickel (that’s just over 85 million pounds). A good starting point and adding Baker to the resource mix could help Lunnon to reach the critical mass that will be required to bring the project into production.
Disclosure: The author has no position in Lunnon Metals. Please read our disclaimer.
