Nickel Crusader
Quick Read
St George Mining (SGQ) has reported several high grade, shallow massive nickel-copper sulphide intercepts from its Mt Alexander Project in Western Australia.
The project is located south-southwest of the nickel and gold endowed Agnew-Wiluna belt.
Better intercepts to date include 4.0m @ 5.1% Ni & 1.6% Cu and 4.3m @ 4.3% Ni & 2.0% Cu.
A standout feature of Mt Alexander is the 100% success rate of EM, whereby all EM anomalies have returned nickel sulphides when drilled.
High Cu, Co and PGE credits result in 6-10% Ni Eq. grades. SGQ also has the East Laverton project at the southern end of the Laverton Greenstone Belt.
While this project is very early stage, the geological and structural setting is highly prospective for gold and base metal mineralisation.
Event & Impact | Positive
High grade hits at Mt Alexander: SGQ has returned numerous shallow, high grade Ni-Cu-Co-PGE intercepts along a 3.5km strike length of the Cathedrals Belt, within the Mt Alexander Project.
Better intercepts include; 4.0m @ 5.1% Ni & 1.6% Cu and 6m @ 3.3% Ni & 1.5% Cu.
Initial metallurgical tests have shown very good recoveries and the potential for split Ni and Cu concentrates grading up to 18% and 32% respectively.
No EM false positives: To date, SGQ has had 100% success rate when drilling EM targets at Mt Alexander.
This is likely due to the unique geological setting whereby the host ultramafic rocks have been intruded by granites and the lack of graphitic and sulphide sediments, (common sources of false positive anomalies).
This provides a significant advantage for target generation and efficient exploration.
What lies beneath: SGQ is about to embark on an extensive deep penetrating fixed loop electromagnetic (FLEM) survey across the currently defined mineralised strike of the Cathedrals Belt.
The survey will use the SAMSON system which can penetrate down to depths of >500m. This survey will be vital for identifying any mineralisation at depth and
extensions of mineralisation defined to date.
A detailed regional aeromagnetic survey is also in progress to assist in target generation over the greater project area.
Investment thesis: While Mt Alexander is still an exploration stage project, sulphide intercepts to date have an extremely high tenor of contained metal.
Despite the narrow massive sulphide intercept widths (average 2.4m), conceptual diluted mining widths of 3-4m (30-50% dilution) could still yield head grades above 4% Ni Eq.
Argonaut sees the future potential for either a standalone mine or toll treating at one of the many nearby nickel plants, including Talisman Mining’s (TLM) Sinclair project, Western Area’s (WSA) Cosmos project or BHP’s Perseverance project.
In addition, the Company has a large tenement holding around Mt Alexander with high base metal prospectivity.
The East Laverton project offers greenfield gold upside.
Recommendation
Argonaut assigns a SPEC BUY recommendation.