Base Metals: Tyranna gets into nickel next door to St George in WA

Iron ore-turned-gold explorer Tyranna Resources (ASX:TYX) is now getting into nickel and has picked up ground right on the doorstep of St George Mining’s (ASX:SGQ) Mt Alexander project.

Those who follow St George will know the company has been enjoying continued success, having now uncovered shallow, high-grade nickel and copper sulphides across a 5.5km section of its 16km-long Cathedrals Belt project in WA.

Just yesterday, St George announced that the discovery of new targets from deeper drilling indicated that the large, high-grade mineral system at the Cathedrals Belt was “live” at depth.

Now others are entering the area in the hopes of making similar discoveries.

Moho Resources (ASX:MOH) recently applied for tenements in the emerging nickel province, and now Tyranna has picked up two projects – Dragon and Knight – in the region the company dubs “WA’s leading nickel neighbourhood”.

The Dragon and Knight tenements are around 26km east of St George’s Mt Alexander project, with the Knight project directly connecting to Mt Alexander.

Location of Dragon and Knight projects. Pic: Tyranna

All the ultramafic belts in the Yilgarn which have nickel sulphides are north-south trending, but Cathedrals is unique in that it runs east to west.

Tyranna said that over time, St George had materially extended the known east-north-east trending high-grade nickel-copper-cobalt massive sulphide orebodies that potentially delivers the Mt Alexander project scale.

The Dragon and Knight projects, which span 352sqkm, host 36km of strike of a regional sheeted dyke that originates west at St George’s Mt Alexander project.

Tyranna’s initial focus will be on exploring that 36km strike for nickel massive sulphide mineralisation because of the “significant exploration upside”.

“Entering into this transaction reflects the board’s strategic decision to secure direct exposure to nickel at a time when the global demand-supply fundamentals are increasingly favourable,” director Joe Graziano said.

Nickel is usually found in two main ore types – sulphide or laterite.

Sulphides are much cheaper and easier to turn into battery grade nickel sulphate than nickel laterites and fetch a higher price.

Supply of nickel sulphides is also declining because of a lack of new discoveries while demand continues to climb.

Demand predictions out to 2030 indicate there is going to be a big step change in demand for nickel used in batteries — driven by a global push by battery makers to use less cobalt and more nickel.

Deal specifics

Tyranna is acquiring Clean Power Resources, which owns the Dragon and Knight projects in WA and the Pacific Express project in northern NSW.

Following successful due diligence, the company will issue 30,769,230 shares or about 3.16 per cent of its issued capital.

Tyranna also has to issue up to 123,076,923 additional shares and either a further $1m worth of shares or cash when it meets certain milestones, plus a 1 per cent royalty.

In other ASX base metals news:

Chase Mining (ASX:CML) shares spiked over 70 per cent this morning on news it had intersected wide massive sulphide zones of nickel and copper at its high-grade Alotta prospect from just 32m down. Drilling delivered a 41m mineralised intercept – the biggest downhole hit so far at the prospect.

Mincor Resources (ASX:MCR) has reported a new high-grade hit of 8.1m at 5.7 per cent nickel from drilling at its Cassini project. This latest intercept was made between two previous high-grade intercepts. Mincor is now working on an updated resource, which is due out in November.

Minotaur Exploration (ASX:MEP) has started drilling of the Hastings VMS target in Queensland. The program will involve around 1,400m of drilling across 12 holes to test the over 3km long anomaly that sits under shallow cover and is open to the east.