Blackstone has been bitten by a ‘King Cobra’ nickel find in Vietnam; shares get a bump
Special Report: Blackstone Minerals’ strategy of picking up a past producing nickel mine is proving to be a very good move indeed, with the discovery of a new near-surface nickel sulphide zone hosting semi-massive sulphide veins at its Ta Khoa project.
While results of the discovery are still pending, Blackstone (ASX:BSX) reported near-surface downhole intervals of up to 60m and visual estimates of up to 20 per cent sulphide mineralisation from the new aptly named “King Cobra” zone.
The news pushed shares up nearly 9 per cent to 12.5c on Wednesday.
Ta Khoa is about 160km west of Hanoi in Vietnam and includes the Ban Phuc nickel mine that has a 450,000-tonne-per-annum concentrator that was built to Australian standards and is expected to require little work to bring online.
Ban Phuc was operated as a mechanised underground nickel mine from 2013 to 2016 and generated $US213m ($310.9m) in revenue during this period of falling nickel prices.
Managing director Scott Williamson says the new find is a “step change for exploration of the deposit”.
“Blackstone is very pleased with the rapid progress and exciting results to date that are outlining a near-surface, large scale disseminated nickel and platinum group elements (PGE) deposit at Ban Phuc,” he told investors.
Nickel sulphides are much more highly sought after than nickel laterites because they are much cheaper and easier to turn into battery grade nickel sulphate and fetch a higher price.
Supply of nickel sulphides is also declining because of a lack of new discoveries at the same time that demand continues to climb.
The King Cobra discovery includes the first-ever intersection of massive sulphide vein and breccia styles of sulphide mineralisation within the Ban Phuc intrusion.
More importantly, this new discovery could point the way to high-grade “feeder zone” mineralisation.
Blackstone has also reported its broadest hits yet from the project — 106m at 0.45 per cent nickel and 51m at 0.73 per cent nickel.
These intercepts included higher grade zones of 15.6m at 1.08 per cent nickel and 18.1m at 1.37 per cent nickel, respectively.
“A substantial thickness of disseminated and potentially higher-grade Nickel – PGE mineralisation within a few metres of surface may prove to be a bulk mineable opportunity,” Williamson said.
Ta Khoa is not just shaping up as a potentially profitable nickel opportunity, but it also could have even better economics with the earlier discovery of PGEs.
Blackstone says all the nickel intersections so far are associated with copper, cobalt and significant platinum, palladium and gold that combined have returned assays of up to 51m at 0.44 grams per tonne (g/t), including 18.1m at 1.01g/t.
The PGEs could give Blackstone a nice by-product credit, which would reduce the company’s operating costs.
The potential of the Ta Khoa project has also been recognised by Korea’s largest battery cathode maker.
Earlier in December, Blackstone signed an MoU with South Korea-based Ecopro BM to investigate the development of a downstream processing facility at the project.
The company is well advanced with an initial scoping study evaluating mining and processing options, including potential in-country downstream processing to deliver high value nickel sulphate into Asia’s rapidly expanding electric vehicle (EV) industry.
The deal with Asia’s largest and the world’s second largest EV battery cathode manufacturer represents a significant step toward making this a reality.
The cathode is used to conduct electricity flows out of a battery or device.
Battery manufacturers have found that adding nickel to their lithium-ion batteries increases their energy density, which allows them to store more power.
While just 5 per cent of nickel goes into batteries at this point, Williamson told Stockhead previously this could increase to almost 50 per cent of all nickel production in the future.
As you would expect, the company is continuing its aggressive exploration campaign with four drill rigs in action.
Drilling is testing the Ban Phuc disseminated nickel sulphide body and includes priority step out drilling of the new King Cobra discovery.
Right now mineralisation has been encountered in drill holes over an area spanning 1,000m by 500m and remains open to the southeast and at depth, which means Blackstone hasn’t found the end yet.
The company also wants to see what else may lie beneath this once active mine and has bought its own electromagnetic and induced polarisation (IP) equipment.
Blackstone has begun an extensive ground-based geophysical survey of the Ta Khoa project, which it took a 12-month option on in May to acquire a 90 per cent stake.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.