THE DRILL SERGEANT: Auroch Minerals (ASX: AOU) announced commencement of scoping studies at both its Nepean (Auroch Minerals 80%) and Saints nickel projects in Western Australia.
Auroch Minerals is conducting the studies to evaluate the economic viability of several mining scenarios at Nepean, including an initial open-pit mine of the known shallow high-grade nickel sulphide mineralisation which it believes could generate cash flow in the short to medium term, as well as potential underground mining scenarios of the known high-grade nickel sulphide mineralisation.
A scoping study of potential underground mining scenarios at the high-grade Saints nickel project will be run in parallel to the studies at Nepean, looking at taking advantage of synergies between the projects to reduce the overall costs of the studies.
Saints currently hosts a high-grade JORC 2012-compliant Resource of 1.05 million tonnes at 2 per cent nickel and 0.2 per cent copper for over 21,000 tonnes of contained nickel.
Auroch has an existing offtake agreement in place for Saints with BHP Nickel West.
Ore from the historic nickel mine at Nepean, when in production, was processed at the Kambalda Nickel Operations that BHP is currently preparing to re-start early next year.
Auroch has initiated the scoping studies to build upon these existing relationships with BHP and evaluate the viability of several mining scenarios that may lead to nickel sulphide production and cash flow in the medium term.
“We are very pleased to join forces with P1 Australasia and initiate scoping studies at our Saints and Nepean nickel sulphide projects,” Auroch Minerals managing director Aidan Platel said in the company’s ASX announcement.
“With the nickel price consistently around US$19,000 per tonne and forecast to increase, we believe there is great potential to take both projects forward to production and hence generate significant cash flow for the company in the medium term, and so we are eager to evaluate the economic viability for several different mining scenarios at these two projects.
“We have developed a good relationship with the processing team at BHP and have an existing off-take with them for Saints, so we are keen to develop this further and to potentially build a solid business case to provide high-grade nickel sulphide feed for their processing facilities to produce Class 1 nickel products required for batteries for the fast-growing electric vehicle (EV) market.
“Parallel to these studies, we continue with our aggressive exploration for a new nickel sulphide discovery across all three of our WA nickel projects.
“Our exciting Nepean Deeps diamond drill program beneath the historic Nepean nickel mine is currently underway, with the first hole NPDD008 on target and on schedule at a depth of approx. 400 metres.
“The hole is planned to reach a depth of 1,200 metres and we look forward to keeping the market informed of its progress.”
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