West Australian base metals explorer NickelX (ASX: NKL) has now advanced its nickel plans by signing a binding term sheet for an option over 100% of the Cosmos South nickel project located on the Wiluna Greenstone Belt.
The option signed with the private vendor over Cosmos South, which was high on NickelX’s target list, will see the company commit to $500,000 in exploration spending over 24 months and issuing the private vendor $300,000-worth of new shares in two tranches.
Last month the two parties signed an exclusive dealing agreement over what was described as a highly prospective but poorly explored tenement.
In fact, the company has not found any recorded exploration reports.
‘Very limited’ exploration due to transported cover
NickelX said then that, despite being surrounded by major nickel miners, the M36/580 licence area has undergone “very limited” exploration and represents one of the very few independently owned projects on the Wiluna belt now dominated by BHP and Western Areas.
NickelX managing director Matt Gauci said the option represents a significant step for the company due to its being key position on the greenstone belt.
“The Cosmos South nickel project ranked highly on our target list and, following due diligence, the team believes the project represents a very compelling nickel target,” he added.
This had been demonstrated by geological interpretation, strong magnetics including ultramafic rocks and what the company describes as “very strong and large bedrock conductors”.
NickelX notes that the project has not been systematically drilled due to the targets lying under transported cover.
The majority of the ground is covered by alluvium draining into Lake Miranda, a 10,000-hectare sized lake (when full) located near Leinster.
‘Significant’ discoveries to the north and south
However, “significant” exploration and discoveries have been undertaken directly north and south of the project where the bedrock outcrops.
A preliminary review of existing magnetics data has been interpreted as showing that ultramafic rocks hosting nickel to the north and south strike through the Cosmos South property.
NickelX is a nickel and copper exploration company targeting sulphide deposits, initially in the Albany Fraser Orogen (AFO).
It is also aiming to generate additional projects in the eastern goldfields and South West Yilgarn, all located in Western Australia.
The company owns 100% interest in its six granted exploration licenses at the Biranup project in the AFO, including numerous high priority targets at Fire Dragon, Silver Dragon, Black Dragon and Red Dragon.
The Wiluna Greenstone Belt hosts the large Leinster nickel operations, Mt Keith, Yakabindie, Honeymoon Well and Cosmos.