Mincor Resources (ASX: MCR) has boosted resources at its high-grade Cassini nickel sulphide deposit in Kambalda, Western Australia, with the contained nickel content expanding more than 50%.
The updated resource now totals 780,000 tonnes at 3.7% nickel for 28,500t of nickel.
“This is a tremendous result, which justifies our decision to increase the number of rigs operating with a focus on rapidly increasing the resource and testing extensions, particularly in the CS4 channel,” Mincor managing director David Southam said.
“Pleasingly, every parent drill hole and wedge intersected nickel mineralisation, demonstrating the continuity of the orebody, and most of these intersections contain massive sulphides.”
Two diamond drill rigs were working at the asset during the March quarter and the mineral resource includes the notable intersection of 7.17m at 11.49% nickel that was reported in mid-December last year.
In addition to Cassini, Mincor has also included data from a small drilling program at the Ken target which resulted in more nickel tonnes added to global resources.
Global resources at Mincor’s Kambalda tenements now stand at 3.5Mt at 3.6% nickel for 128,700t of contained nickel.
Mr Southam noted that drilling would continue at Cassini through the current quarter, with Mincor hoping to release a further mineral resource update.
Additionally, later in the June period, follow-up drilling will be carried out at Ken.
BHP offtake term sheet
The term sheet replaces a previous 20-year agreement and allows for Mincor to transport up to 600,000tpa of nickel sulphide to BHP Nickel West’s Kambalda facilities for processing.
Although processing costs weren’t disclosed, Mr Southam referred to the arrangement, as a “commercially attractive processing and offtake solution”.
Mincor’s revenue will be generated from its nickel-in-concentrate sales to BHP Nickel West, which will be dependent on the average monthly London Metal Exchange nickel price.
“The term sheet we negotiated with BHP Nickel West is compelling on a number of levels – most importantly with respect to price, risk and capital intensity – which clearly meant that this was the best economic outcome for our shareholders over the contract term with the lowest risk,” Mr Southam explained.
Mincor’s nickel ground in Kambalda covers more than 300sq km, with the company’s strategy to firm up five years’ worth of reserves across its Ken/McMahon, Cassini, Durkin North and Mittel/Burnett deposits.
Shares in Mincor lifted 4.35% to $0.48 on this morning’s news.