Mining Projects Group (ASX:MPJ) has commenced a highly anticipated initial 15 hole diamond drill campaign totalling 5,000 metres at its flagship Roe Hills nickel project in Western Australia's Fraser Range.
Director Neil Hutchison has identified several new and significant nickel sulphide target zones at the Talc Lake, Roe 1 and Roe 2 prospects.
The drilling includes concurrent down-hole electro-magnetic surveys to be managed by Newexco Services.
MPJ has formally engaged OnQ drilling to complete the initial phase, and an agreed extension of up to 10,000 metres.
The extension will incur a discount rate on all metres drilled, and 25% of consideration for drilling services will be satisfied by issuing MPJ shares.
MPJ recently raised $1.395 million by way of a placement which has ensured ample funding to complete 10,000 metres of drilling, including the geophysical works to be conducted by Newexco.
Newexco Services and Neil Hutchison
Bill Amann and Adrian Black from Newexco have been responsible for the discovery of multiple major nickel sulphide deposits, including Sirius Resources' (ASX:SIR) Nova-Bollinger in the Fraser Range, about 50 kilometres from MPJ's current exploration.
Interestingly, in the case of MPJ, they have chosen to take MPJ shares as part payment for their services.
This gives them additional exposure to any discovery, and is indicative of their optimism for MPJ's ground.
MPJ has pulled together an impressive exploration team - Newexco are joined by Hutchison, the General Manager for Geology at Poseidon Nickel (ASX:POS).
Hutchison engineered the discovery of the Cosmos and Windarra nickel deposits.
Nickel Sulphide Prospects
The prospects were identified after Hutchison took a fresh approach to finding nickel sulphides at Roe Hills.
3D modelling of existing data has defined the plunge direction, fertility for sulphide deposition, and the definition of “blind” target zones which was missed by previous explorers.
Talc Lake is an advanced nickel prospect that comprises a NE-trending zone of nickel-copper mineralisation.
Nine holes for 3,200 metres are planned for Talc Lake targeting southerly plunging anomalous nickel-copper intersections.
The company will also drill six holes totalling 1,800 metres at the Roe 1 Prospect, targeting southerly plunging anomalous nickel-copper mineralisation.
The Roe Hills Project, located 110 kilometres east of Kalgoorlie, consists of five exploration licences totalling 360 square kilometres with a 40 kilometre continuous strike of ultramafic rocks.
Analysis
With nickel prices rising as much as 56% this year to US$21,625 per tonne, this drilling program will be closely watched.
The company is also fully funded to expand the program from the current 5,000 metres to 10,000 metres if warranted.
An extensive and deep nickel sulphide drilling campaign in the Fraser Range, coming from a $10 million company, is sure to gather additional market traction as drilling progresses.
The MPJ share price has already bounced ahead nicely as investors look to get set ahead of drilling. However, this gain would look positively paltry against a market cap. of $8.8 million should Neil Hutchison and Newexco have success at Roe Hills.
Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.