Veteran investors with an interest in nickel mining — and that means anyone over 80 — might remember a big event in 1953 when Inco, a Canadian mining company, discovered Australia’s first nickel deposit at Wingellina, a place close to the centre of the country.

Most of the people involved with that event, near the point where WA, SA and NT meet, are long gone.

But the nickel is still there, and so is a metal regarded as unimportant at the time — cobalt.

Geologists might die, but geology never changes until it is mined.

That’s something Metals X (ASX:MLX), the latest owner of Wingellina, wants to do — which is one reason why its share price has been showing signs of life after a sell-off in January.

Whether it can breathe life into Wingellina (also known as Irrunytju) is a question that might get an answer later this year thanks to growing demand for electric cars, and a booming market for cobalt which is essential in long-life batteries.

Wingellina, also known as Irrunytju, has a population of about 100.

While Wingellina is a terrific story — one where history meets the modern world — it will only become a mine if Metals X can overcome Australia’s great curse, the tyranny of distance.

The nearest major centre in WA to Wingellina is Kalgoorlie, 900km to the south-west, roughly the same distance as it is to Alice Springs in the north-east, the closest major centre in the NT.

The prize in finding a solution to the remote location is a mineral system which ranks as one of the world’s biggest undeveloped nickel and cobalt structures, with bonus metals in the orebody, copper and scandium.

The latest news from drilling at Wingellina, including a cobalt assay up to an eye-catching 1.58% over a six metre intersection from a depth of just 12m, helped Metals X add 10c to 91.5c last week, but that was only a partial recovery to the $1.21 reached a month earlier.

Metals X shares over the past six months. (ASX:MLX)
Metals X shares over the past six months. (ASX:MLX)

Encouraging as the assays have been from the recently completed 41-hole infill program designed to fine-tune analysis of up to 15 separate deposits at Wingellina there is a lot of work for Metals X to do before it can be confident that it can do what earlier owners have failed to do, develop a mine.

And, even before that happens the mid-tier miner needs to resolve problems at other operations, particularly at the Nifty copper mine in WA where ore extraction has been slower than planned, crimping metal output, and the Metals X share price.

Wingellina, at this stage, is seen as an option with the potential to thrust Metals X into the recovering nickel market as well as cobalt, the hottest metal in the world today.

With a number of issues on its plate, investors should see Metals X as a stock to watch rather than one to rush, but that said there is the potential for Wingellina to attract a development partner keen to secure a future supply of cobalt.

Car makers, from Toyota to BMW, are scouring the world for cobalt to enable them to expand their electric car offering, a search becoming increasingly more difficult as the dominant producer of the metal, the Democratic Republic of Congo, slips closer to a re-run of the civil war which devastated the country two decades ago.

If Congo collapses again the global supply of cobalt will be affected, and even material coming out during (and after) a war will be closely watched by anti-corruption and ethical mining regulators.

The last thing a big-name car maker wants is to be accused of sourcing some of its raw materials from a war zone — and the human rights implications in that situation.

Wingellina, which is part of what Metals X calls its Central Musgrave Project, is already estimated to contain a resource of two million tonnes of nickel and 154,000 tonnes of cobalt.

Earlier studies have been based on a project producing 40,000t of nickel and year, plus 3000t of cobalt, over a mine life of 40 years.

Wingellina has always been a long shot thanks to its location and the challenge of the potentially mineable material being scattered along a 10km strike, as well as being in a series of separate deposits which adds to mining costs.

However, the stars might finally be aligning for Wingellina.

The nickel price is rising. Cobalt is on fire. Copper is creeping up, and scandium is finding multiple applications as an alloy to strengthen aluminium.

Macquarie Bank rates Metals X as a buy, tipping a price of $1.30 over the next 12 months, driven by an expected recovery in copper output at Nifty and an ongoing strong performance at the Renison Bell tin mine in Tasmania.

Further studies into the high-grade cobalt zones “could unlock a potential development path for Wingellina”, Macquarie said.