Nickel-focused Estrella Resources (ASX: ESR) has delivered what it calls “spectacular” nickel, copper and cobalt results that “exceeded expectations” from drilling at its Spargoville nickel project near Kambalda in Western Australia.
The maiden drilling campaign targeted the 5A open pit floor and uncovered 15m at 10.45% nickel, 0.78% copper, 0.20% cobalt, 0.87 grams per tonne lead and 1.15g/t platinum from 20m.
Other notable results were 5m at 11.32% nickel, 0.54% copper, 0.21% cobalt, 0.42g/t palladium and 0.22g/t platinum from 61m; and 3m at 12.90% nickel, 1.37% copper, 0.29% cobalt, 1.86g/t palladium and 0.67g/t platinum from 69m.
“These nickel results are some of the best nickel sulphide intercepts that I have seen in my 14 years exploring for nickel sulphide orebodies in WA,” Estrella chief executive officer Chris Daws said.
According to the company, drilling at 5A has exceeded the company’s expectations, with assays from the maiden campaign consistently higher than those reported in historic exploration.
Mineralisation is also open at depth.
Additionally, the company is “encouraged” by the presence of elevated cobalt and platinum group elements.
Metallurgical testing will be carried out on the drill samples, which will look at unlocking the platinum group elements and cobalt as potential by-products.
Nickel bulls out in force
With a dry pipeline of nickel exploration projects, many analysts believe the nickel market is hurtling towards a supply crunch in the not-too-distant future.
Mr Daws agrees, claiming the current market fundamentals including a dry pipeline, and mounting demand remind him a lot of the precursors to the 2007 nickel boom.
“The outlook for nickel is bullish with the forecast of large supply deficits and the need to provide quality nickel stocks to the electric vehicle/battery storage industries,” Mr Daws said.
Estrella hopes to take advantage of these market fundamentals and in anticipation of production has already inked a contract to treat its ore at Poseidon Nickel’s (ASX: POS) nearby Black Swan concentrator.