Carnavale positions itself as an attractive nickel-cobalt explorer with new resource
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Special Report: Carnavale Resources has just released a nearly 15 million tonne nickel laterite resource that makes it look extremely attractive compared to its peers.
Most other small cap nickel laterite explorers have market caps ranging between $19m and $252m, but Carnavale (ASX:CAV) has a market cap of just $3m.
The next closest is the $19m Barra Resources (ASX:BAR).
But by Tuesday, Carnavale had delivered a total resource of 14.6 million tonnes at 0.75 per cent nickel and 0.049 per cent cobalt containing 110,000 tonnes of nickel metal and 7200 tonnes of cobalt metal for its Grey Dam project.
Interestingly, this grade is higher than Barra Resources’ 25.1 million tonne resource for its Mount Thirsty project.
Investors appreciated the news, sending shares up 20 per cent to an intra-day high of 0.6c.
Carnavale’s Grey Dam resource is shallow and flat lying, with the laterite style mineralisation occurring from surface to about 50m deep.
This means it will likely have a low strip ratio and can be mined using simple open pit methods.
Strong individual high grade nickel or cobalt domains occur within the upper portions of the deposit, with the bulk of the high grade mineralisation being less than 30m deep.
Already over 70 per cent of the resource is in the higher confidence indicated category.
Mineral resources are categorised in order of increasing geological confidence as inferred, indicated or measured.
“We would have to be one of the cheapest with a nickel laterite resource,” managing director Andy Beckwith told Stockhead.
“We have defined a high-value shallow resource that should be readily amenable to an open pit mining strategy.
“Our next step is to assess metallurgy and deliver on a low-cost processing strategy.”
Carnavale’s ground has also revealed its potential for deeper fresh sulphide nickel, cobalt and copper mineralisation.
Previous drilling intersected promising sulphide mineralisation that has not yet been followed up.
Carnavale is currently assessing the application of a detailed electromagnetic survey to target this style of mineralisation.
Nickel is usually found in two main ore types – sulphide or laterite.
It is a key metal in lithium-ion batteries, used to make the cathode.
Laterite deposits are much more common than sulphide deposits and found at shallow depths.
With the rapidly rising demand for lithium-ion batteries to power electric vehicles, market watchers suggest battery makers will need to source supply from nickel laterite deposits and not solely rely on nickel sulphides.
With nickel sulphide production on the decline, advancements are being made to improve processing techniques to make producing nickel laterites easier and less costly.
Carnavale has is now readying itself for a program of test work to determine potential processing options.
The test work will initially focus on possible low capex options including heap leach, vat leach on site processing and simple physical upgrading to a higher grade concentrate for direct sale to interested third parties.