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St George Mining adds further nickel sulphide targets for drilling

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St George Mining adds further nickel sulphide targets for drilling

St George Mining (ASX:SGQ) is gearing up to shortly start a closely-watched drilling program for massive nickel sulphides at its under-explored East Laverton project in Western Australia.

The company has now added additional targets to the campaign, which will test at least seven high quality targets that include strong EM conductors from the last week of May.

One of the new targets will test a potential source of the primary massive nickel sulphide stringer veins intersected at Desert Dragon North in drill hole DDNRC002 that returned 2 metres at 1.08% nickel from 55 metres.

New three-dimensional modelling has identified the local basal contact position of the ultramafic channel that hosts DDNRC002.

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.

The East Laverton Nickel Sulphide Project is located in an under-explored area where large discoveries are still possible.

Its large scale nickel prospectivity 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 company’s drilling has intersected very thick intervals of disseminated nickel sulphides.

Adding further interest, its EM conductors for drilling were identified 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.

“We have a portfolio of highly prospective drill targets ready to go, and there are more on the way,” executive chairman John Prineas said.

“The quality and range of our drill targets illustrates the large scale of our project. This is a regionally important project, which has already attracted the attention of major mining companies.
   
“The upcoming drilling campaign will test at least seven new targets for massive nickel sulphides. Each of these has strong potential for a significant discovery.”


Drilling Program

St George’s drilling campaign is scheduled to commence in the last week of May 2015 and is expected to be completed in approximately 6 to 7 weeks.

The diamond drilling program totalling about 2,100 metres will test at least seven high quality targets for massive nickel sulphides. 

Six of these targets are strong EM conductors which have an EM response that is consistent with massive nickel sulphides.

Importantly, the targets also have favourable geological and structural features which significantly support their potential to represent massive nickel sulphide deposits. 

Downhole EM surveys will be carried out concurrently with drilling.

The field team, managed by Cadre Geology and Mining, has already established a field camp and cleared drill pads for the initial holes planned for drilling.

DDH1 Drilling will confirm early next week the date for mobilisation of the drill rig to site.


New Targets

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.  

Three dimensional modelling of geological and geochemical data from DDNRC002 and the surrounding drill holes suggests this larger mineralised body may be situated at the basal contact of the ultramafic channel at Desert Dragon North, below the nickel sulphide intersection of DDNRC002.

Significantly, the modelling indicates that past drilling has not tested this basal contact.

Both DDNRC002 and DDNRC001 encountered thick ultramafic units, indicating a large high MgO ultramafic channel.

This is typically a very prospective location for nickel sulphide exploration. The discovery of massive nickel sulphide veinlets in DDNRC002 increases the potential for further massive nickel sulphide mineralisation in this channel, and compels the testing of the basal contact as a priority target. 

A downhole EM (DHEM) survey of DDNRC002 and the adjacent holes was not completed at the time the holes were drilled.

A DHEM survey will be completed at the planned hole BDP_05 to identify any conductors, either laterally or at depth. 

Drill hole DDD007 did identify a DHEM conductor to the west of DDNRC002, and this will be further investigated and modelled once the DHEM data from the planned hole (BDP_05) has been acquired.  

At Desert Dragon Central, drill hole DRAC35 was completed by BHP Billiton Nickel West in 2012 under the previous farm-in arrangement with St George.

The hole intersected 18 metres at 0.40% nickel from 100 metres (including 4 metres at 0.57% nickel from 100 metres), confirming the presence of nickel sulphides in this large high MgO ultramafic channel.  

Modelling of exploration data for this highly prospective area 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.

Dragon 8 is modelled by Newexco as EM plate DDS_08 and drill hole DDP_04 has been designed to test the centre of the plate.  

The presence of known nickel sulphides in this high MgO ultramafic channel and the location of the conductors on the basal contact significantly increase the likely potential of these EM conductors to represent massive nickel sulphide mineralisation.


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.


Analysis

The diamond drilling at St George Mining’s East Laverton Nickel Sulphide Project could result in its re-rating if successful.

Significant value has already been created in the Project with BHP’s previous work confirming its potential to host large scale nickel sulphide mineralisation and subsequent systematic exploration continuing to confirm the required geological factors for a potential major discovery.

This has largely de-risked the project, with field work confirming a fertile environment for nickel sulphides.

Indeed the company has already received approaches from potential cornerstone investors, including other major mining companies.

Share Price Catalysts

- Results from diamond drilling program;
- 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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