With Legend Mining (ASX: LEG) entering a trading halt last Thursday and then requesting a trading suspension on Monday, speculation has been rife the company may have made a Nova-style discovery, with renowned prospector and investor Mark Creasy and nickel miner Independence Group (ASX: IGO) holding major stakes in the explorer as well as being active in the region.
Through his various wholly-owned entities known as the Creasy Group, Mr Creasy owns at least 26.84% in Legend, with Independence Group upping its own holding to 14.18% at the end of last month.
All up, the top 20 Legend shareholders hold more than 63% of the entity, with Independence Group also given the right to appoint a director to Legend’s board.
Legend requested its trading suspension due to pending exploration results at its Rockford project in Western Australia’s Fraser Range, where it is primarily exploring for nickel.
In addition to Independence Group and Mr Creasy possessing a substantial stake in Legend, the duo has also managed to lock-in respective slices of the Rockford project tenements through various joint venture agreements.
The Creasy Group has also pegged up substantial ground surrounding Legend’s tenements with Mr Creasy’s private entity Great Southern Nickel Pty Ltd lodging a mining lease application for its tenements in the area last year.
Meanwhile, late last month, Legend revealed diamond drilling at Area D within the project had intersected nickel-copper sulphides in gabbronorite host rock.
At the time, Legend managing director Mark Wilson said assays and petrology would provide further information.
A week later, Legend announced the third diamond drill hole was underway to follow up on the earlier results at Area D.
Mr Wilson said the hole targeted the gabbronorite host rock beneath the previous identified nickel and copper mineralisation.
What Mr Creasy and Independence Group are hoping to uncover is a similar nickel discovery to Independence Group’s Nova deposit, which is currently being mined.
The Fraser Range duopoly
Either by locking-in a large stake in an explorer or securing a joint venture over Fraser Range tenements, both the Creasy Group and Independence Group have monopolised the region.
Through their various investments both companies stand to benefit from any major discovery.
Exploration companies in the Fraser Range region
If Legend has indeed made the region’s next “Nova discovery”, as speculators suggest, it’s worth looking at nearby explorers that may be sitting on a similar find.
Galileo Mining (ASX: GAL)
Via his wholly-owned entities, Mr Creasy also has a large stake in Galileo Mining as does Independence Group.
Galileo was pulled up by the ASX on Thursday last week after its shares rocketed from $0.11 to an intra-day high of $0.15 on the speculation due to its proximity to Rockford.
In its ASX response, Galileo noted it has previously told the market its own tenements lie along strike of Legend’s.
Additionally, at the beginning of November, Galileo reported aircore drilling at its Lantern prospect had “confirmed a highly prospective intrusive gabbronorite rock unit” above a previously identified conductor — similar to what Legend has been pulling up at Area D.
Galileo also pointed out it was actively exploring its own tenements with planning for a reverse circulation drilling program underway.
Since then, Galileo’s shares have continued soaring to close out Monday at $0.215 – up 10.26% for the day alone.
Before market open on Tuesday, Galileo announced it had uncovered the Delta Blues prospect in the northern Fraser Range, which is 4km along strike from Legend’s Crean prospect.
Fraser Range Metals Group (ASX: FRN)
Perhaps the only explorer that Creasy or Independence Group don’t have their hands on in the region is Fraser Range Metals Group, which owns a small tenement package adjacent to Rockford.
Since Thursday the company’s share price has rocketed 40% from $0.02 as drilling started at its namesake project and investors quickly worked out how close the company’s tenements are to Legend’s.
The drilling program at Fraser Range Metals’ wholly-owned namesake project will comprise up to five reverse circulation holes and will be testing five distinct electromagnetic plates identified from a surface EM survey earlier this year.
On Monday alone, Fraser Range Metals’ share price closed up more than 16% at $0.028.
Independence Group (ASX: IGO)
After acquiring Sirius Resources back in 2015, Independence Group got its hands on the Nova nickel discovery other explorers in the region are aspiring to emulate.
The deposit has now been commercially mined for more than two years. During FY 2019, Nova generated 30,708t of nickel in concentrate, 13,693t of copper concentrate and 1,090t of cobalt concentrate.
In its latest September quarterly, Independence Group revealed Nova was exceeding its FY 2020 quarterly guidance range for all metals.
For the period, nickel concentrate production from the mine was up 2% to 7,724t of metal, while copper concentrate output lifted 1% to 3,490t and cobalt rose 1% to 282t.
As well as actively mining at the deposit, Independence Group is actively drilling for similar mineralisation and is focusing on its ground within 15km of the mining lease.
Ausquest (ASX: AQD)
Ausquest recently kicked off drilling at the Telegraph prospect within its Balladonia project in the Fraser Range.
Reverse circulation drilling will test beneath the anomalous results found at Telegraph to provide a clearer indication of its potential.
Ausquest managing director Graeme Drew described the project as a “potential company-maker”.
Classic Minerals (ASX: CLZ)
Independence Group is earning a stake in Classic Minerals’ Fraser Range project after executing an agreement in July this year.
The nickel miner can lock-in a 51% interest by spending $1.5 million on exploration over two years. It can then up its stake to 70% by investing a further $1 million on advancing the asset over another two years.
Constellation Resources (ASX: CR1)
Investors have already uncovered Constellation Resources with the company getting a speeding ticket from the ASX on Monday.
Constellation owns the Orpheus project which encompasses 552sq km in the Fraser Range where it is reviewing newly acquired data along with historic geophysical surveys.
The company owns 70% of three exploration licences and once application with Enterprise Metals (ASX: ENT) retaining the remaining 30%.
Constellation also wholly owns another exploration licence in the region.
In response to the ASX speeding ticket, Constellation referred to Legend’s trading halt and pending Rockford exploration results.
Constellation’s share price surged from $0.19 last Wednesday to close at $0.27 on Monday – up more than 42%.
Buxton Resources (ASX: BUX)
Buxton Resources has a 10% free carried interest to a decision to mine at its Fraser Range project, which is owned in joint venture with Independence Group.
The duo has firmed up multiple high priority targets including the large Solar anomaly along strike of Creasy’s Silver Knight discovery.
Carawine Resources (ASX: CWX)
Another project Independence Group has shouldered into in the region is Carawine Resources’ Fraser Range project which hosts the Big Bullocks and Aries prospects.
Independence Group has the right to secure 70% of the tenements.
Carawine also wholly-owns the Big Bang tenement which was recently granted and lies in the central Fraser Range.
The company noted it is close to recent nickel and gold discoveries including those made by Independence Group and Galileo.
Boadicea Resources (ASX: BOA)
Boadicea Resources’ flagship project is its own Fraser Range, which it believes has potential for Nova-style mineralisation.
The company has two granted licences and five priority ballot licences for 406sq km across the Fraser Range, including a licence adjoining Creasy’s Silver Knight discovery.
Boadicea also has submitted 12 exploration licence applications that lie north and south of Nova.
The company’s focus is Symons Hill which is a granted licence adjoining Nova and covers 73sq km.
Arrow Minerals (ASX: AMD)
Africa focused Arrow Minerals has a 10% interest in the Plumridge nickel project within the Fraser Range.
Independence Group is actively exploring the asset and now owns 90%.
Mount Ridley Mines (ASX: MRD)
With the recent exploration activity in the Fraser Range, Mount Ridley Mines has dusted off its own namesake project in the region and commissioned an independent review of available data.
The company noted its Mt Ridley project was “hugely underexplored” with only a limited part of the asset tested.
Mount Ridley claims its own tenements could potentially host Nova-style mineralisation.
Orion Minerals (ASX: ORN)
Independence Group is drilling Orion Minerals’ Fraser Range tenements under a joint venture agreement.
Drilling follow-up on anomalies identified from geophysical surveys.
Rumble Resources (ASX: RTR)
Independence Group plans to drill Rumble Resources’ Thunderstorm project in the Fraser Range.
However, the focus at this asset is a high-grade gold discovery.
Under the joint venture agreement with Independence Group, Rumble is free-carried 30% up to completion of a pre-feasibility study.
Creasy Group private entities
Via Great Southern Nickel and Ponton Minerals, Mr Creasy has prime holdings adjacent to Nova and Independence Group’s other nearby tenements.
Because the companies are private, no information on any exploration is available.
Timing perfect for nickel discovery as LME stockpiles continue eroding
With the nickel market hanging in a deficit since 2016 and stockpiles eroding to under 70,000t since October, the timing for a Nova-style discovery couldn’t be better.
The diminished London Metal Exchange inventory of 68,280t represents less than a month’s supply – squeezing an already tight market that has a dry project pipeline and is facing mounting demand from the rapidly accelerating electric vehicle and renewable energy sectors in addition to its main use in steel.
Despite the dire supply situation, the nickel price hasn’t pushed upwards as quickly as many had anticipated and was last trading at US$13,805 per tonne – its lowest point since July this year.
It’s expected the price won’t languish for much longer as stockpiles continue eroding and new supply takes years to come online.
Any new Nova-style discovery would definitely attract a lot of attention from miners and investors alike.