Great Boulder: The hunt for the missing Nickel
In our last note, we talked about GBR hunting for the source of the intrusion that is feeding the copper-nickel-Cobalt system Mt Venn. At Mt Venn they discovered the copper rich, later stage part of the system, and the goal is to find the earlier stage part of the system, which they believe could be nickel-rich.
The next steps included surface drilling and airborne EM, to identify conductors, which they reported yesterday. And if you are a shareholder of GBR, then the EM results are pretty much exactly what you would like to see. The airborne EM has confirmed a high number of late-stage conductors over a 6km strike length.
This is an exciting step in confirming the model for the Eastern Mafics potential. Key takeaways from the announcement (Highly successful EM survey identifies multiple conductors at Mt Venn copper-nickel-cobalt):
- Size - EM hit conductors over 6km of strike length. They initially thought the target area in the Eastern Mafic might be around 2-sq-km. They are now thinking around 4sq-km
- Late time EM response - perhaps the most important aspect is the most technical, in that late time EM responses are often associated with massive sulphide mineralisation. They are also seeing many more times the conductors they found when the ran the EM over Mt Venn. (when the airborne is flown they release a charge, that charge reflects back quickly from non-chargeable soil/rocks, later stage or slow responses can be associated with mineralisation/sulphides)
- Depletion vs Enrichment zone - this was the other part of the model they wanted to confirm with the EM. And they are finding areas with no conductors in the depletion zone, which helps support the model.
- Geo-chem supports earlier stage in the formation - the initial geochem results also suggest the eastern mafic signature was earlier in the formation sequence (as the earlier stage is often significantly richer and may contain the nickel)
To quote the MD:
“These results reveal an exceptionally large number of strong late-time conductors which show the Eastern Mafic complex has the potential to host significant massive sulphide mineralisation."
Next steps and potential catalyst - Ground EM
They will rank drilling targets following a ground-based moving loop EM (“MLEM”) survey. Ground EM is around 10x's stronger than the airborne, and they are intending to run it with tighter spacing compared to the ground EM they ran over Mt Venn.
As a shareholder of GBR, this is exactly what you would hope for from the EM survey of the Eastern Mafic. The technical work is supporting the theory they may have found the neck or early stage part of the system which may be nickel-rich. The big plus for GBR is the size of the target area, and if you can combine grade to that, GBR may be on to something significant. Technical observers will be watching closely for the ground EM results, and from there it will be a much-anticipated drill campaign (so plenty of newsflow). Whilst great steps in building the model, we also need to note that everything is theoretical, and drilling is the only way to test the theory, to highlight the exploration risk involved.
GBR has enough cash to see them through the immediate campaign, however, timing a future raise will be up to the board.
GBR has a fully diluted market cap of $25.4m at $0.35. As at 31 March $2.797m in cash.
Disclosure - The author of this desk note owns shares in GBR.ASX
Important Note - This note is not a recommendation or advice to buy or sell GBR shares mentioned. GBR shares should be considered very speculative, high-risk, and volatile. There are significant risks inherent in mining exploration that are not discussed in this note.You should always seek professional advice before considering any share purchase or sale. Please read the disclaimer in full below. This is a desk trading note, and not a research document, and the view of the authors only.
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Tom is a Founder and Head of Wealth Management. For the past 10 years, he has been running the Wentworth Model Portfolios, focusing on macroeconomics and tactical equity positioning. These portfolios were initially created as a solution for "core...