Auroch Minerals Ltd (ASX:AOU) has kicked off its maiden diamond drill program over the Nepean Deeps target area at the 80%-owned Nepean Nickel Project in Western Australia.
The base metals explorer has also inked an options underwriting agreement with two major shareholders, providing an extra $1.64 million to fund the expanded drilling campaign.
The ASX-lister is set to drill six holes over the Nepean Deeps target, two of which will act as platforms for down-hole geophysical surveys.
After that, the remaining four drill holes will test the highest priority targets for potential nickel sulphide mineralisation.
“Well funded” for expanded program
Auroch Minerals managing director Aidan Platel said: “We are thrilled to be underway on our maiden diamond drill program at the Nepean Deeps target area.
“There is great potential for the known high-grade nickel sulphide mineralisation of the historic Nepean mine to extend at depth below the pegmatite veins at the base of the old mine workings and we have designed this drill program accordingly to systematically test this high-priority target.
“The first two drill holes are primarily designed as platforms for down-hole geophysical surveys but will also test for mineralisation on the projected footwall contact down to 400 metres below the old mine workings.
“Another four drill holes will then test the highest priority targets for potential nickel sulphide mineralisation.
“We are very pleased to have entered into an underwriting agreement for the remainder of the outstanding options.
“This strong show of support from existing shareholders means that we are well funded for the expanded Nepean Deeps drill program, as well as ongoing exploration across our other projects.
“The first drill hole is expected to reach target depth in three to four weeks, and we look forward to keeping the market informed as this exciting program progresses.”
Drilling underway at Nepean Deeps
Already, drilling at pioneer hole NPD008 has kicked off at the nickel project’s Nepean Deeps target.
This hole will test below the historic Nepean mine workings for down-plunge extensions to the known high-grade nickel sulphide mineralisation.
NPDD008 is planned to reach up to 1,200 metres deep and is currently at 38 metres downhole.
The pioneer hole’s successor will also serve as a geophysical platform hole to test for potential nickel sulphides over a larger area via down-hole geophysical techniques.
These kinds of surveying techniques will be used to test for any conductive units that may represent nickel sulphide mineralisation within a radius of roughly 100 metres to 150 metres from each drill hole.
In addition, the first two drill holes will test the all-important projected footwall position for potential nickel sulphide mineralisation.
The targets will test down to around 400 metres vertically below the previous underground workings.
Once these two holes wrap, up, they’ll be used to inform the next four drill holes, which will test high-priority nickel sulphide targets.
Auroch believes it can drill around 20 metres per shift, which could include some controlled drilling to keep the rigs on track.
Based on the forecast drill rates and the drilling shifts, the ASX-lister believes the pioneer hole will reach its targeted depth in around three to four weeks.
Options underwriting
As drilling at Nepean Deeps gets underway, Auroch has inked an options underwriting agreement with major shareholders Rainmaker Holdings (WA) Pty Ltd and 6466 Investments Pty Ltd.
Together, the shareholders will fully underwrite the exercise of unquoted options at 10 cents each, with an expiry date set for November 30, 2021.
On the date of the underwriting agreement, Auroch had more than 16 million underwritten options on issue that remain unexercised.
Based on this, the underwriters are guaranteed to provide $1,644,058.40 to fund the expanded Nepean Deeps drilling program and ongoing exploration across Auroch’s nickel sulphide portfolio.
Of course, the agreement remains subject to certain termination events and comes with an underwriting fee of roughly $66,000.
Currently, the ASX-listed nickel explorer has around $2.7 million in cash reserves to support its future operations.