Auroch Minerals Ltd (ASX:AOU) will push ahead with an “aggressive and systematic” nickel strategy in the 2022 financial year, as it continues to advance towards potential nickel sulphide production.
The nickel explorer released its annual report on Thursday following a successful 2021 in which it laid the foundations for its future through the acquisition of the Nepean project and continued exploration of it along with the Saints and Leinster projects.
This strategy is paying dividends - figuratively, if not literally just yet - with the company’s share price more than doubling in the past year in line with strong market fundamentals for the battery metal.
FY 2022 plans
The company said in its annual report that it had a clear strategy for the remainder of 2021 and into 2022.
“We will aggressively and systematically explore our nickel projects in WA, whilst completing internal scoping studies at Nepean and Saints and pushing towards potential nickel sulphide production,” it said.
“Global demand for nickel continues to grow as countries push for decarbonisation and with nickel supply beginning to tighten, exposure to high-grade nickel exploration provides leverage to the expected commodity super-cycle.
“Our aggressive exploration strategy yielded immediate results last financial year with high-grade nickel sulphides intersected across all three projects in WA.
“Our methodical exploration program is working and providing excellent results and with many more exciting targets being drilled, we are well positioned for the year ahead.”
Nepean project
In November last year, Auroch acquired a majority stake of the high-grade Nepean Nickel Project in a prolific nickel producing region 25 kilometres south of Coolgardie in Western Australia.
It sent AOU shares to a three-year high, and the share price has been sustained at the new level in the 10 months since.
Auroch has an 80% participating interest in the project, which contains the historical high-grade Nepean nickel sulphide mine - Australia’s second producing nickel mine, producing 1,108,457 tonnes of ore between 1970 and 1987 for 32,202 tonnes of metal.
The company kicked off a maiden diamond drill program over the Nepean Deeps target area in August, as well as inking an options underwriting agreement with two major shareholders, providing an extra $1.64 million to fund the expanded drilling campaign.
Prior to that, it undertook a maiden 3,397-metre reverse-circulation (RC) drill program that reinforced the potential of the region; thick high-grade nickel sulphide mineralisation was intersected at shallow depths such as 8 metres at 4.30% nickel from 35 metres, including 2 metres at 6.86% nickel from 37 metres.
These high-grade results confirmed Auroch’s understanding of the area and geological model of the shallow high-grade nickel sulphide mineralisation.
Saints project
Saints Nickel Project is the most advanced of the company’s three projects near Coolgardie, containing a mineral resource of 1.05 million tonnes at 2% nickel, 0.2% copper and 0.06% cobalt for 21,400 tonnes of nickel, 1,600 tonnes of copper and 600 tonnes of cobalt.
Auroch conducted a 1,200-metre diamond drill program at Saints, and high-grade massive nickel sulphides were intersected with the best results including 1.25 metres at 3.71% nickel from 241 metres.
These results confirmed the fertility of the project and the potential that it may host significant massive nickel sulphide mineralisation.
Several strong offhole conductors identified during the diamond drilling are near the basal contact of the Saint Andrews channel and represent priority drill targets for the next phase of diamond drilling at Saints.
Leinster project
In August Auroch received encouraging assays from reverse circulation and diamond drilling completed on the Woodwind, Firefly and Brass prospects at the Leinster project.
Elevated nickel results at the Woodwind and Brass prospects, with disseminated nickel sulphide intersections highlight the potential for new nickel sulphide discoveries.
The prospects are interpreted to contain the same ultramafic stratigraphy that hosts the known shallow high-grade nickel sulphide mineralisation at the Horn Prospect directly along strike to the south.
Results show these prospects are high-priority drill targets.
- Daniel Paproth