The first nickel boom was powered by stainless steel for the Vietnam War, the second by the rise of Asian urbanisation.

Whether a third comes from the growth of EVs remains to be seen, but one location that remains a barometer for these swings is the tidy WA town of Kambalda.

It was there on January 28, 1966, that dead-eyed driller Jack Lunnon made Australia’s first discovery of note – a treasure of a hit grading a rollicking 8.3%.

It became the Lunnon Shoot, starting a naming convention across the multitude of mines on the Kambalda and nearby Widgiemooltha Domes, which have delivered roughly 1.7 million tonnes of high grade nickel since 1966.

That famous name is now coming back in new float Lunnon Metals, a team of heavy hitters aiming to revive the under the radar Foster/Jan nickel mines.

“Obviously Jack Lunnon looked like quite a character, the geologists as they learnt the geology of the site and put together the stratigraphy, the basalt that sits in the footwall of all the main orebodies was called the Lunnon basalt,” Lunnon managing director Ed Ainscough told Stockhead.

“Given the fact that basalt underpins the nickel across the entire district we thought it was a pretty good name to underpin our success in the future hopefully.”

When it lists later this month Lunnon will be among only a handful of listed small caps providing exposure to the high-grade Kambalda district.


A new beginning

Lunnon Metals was born out of the ACH Nickel business backed by Kambalda mining entrepreneur Ian Junk.

In 2014 it sealed a JV with Gold Fields to farm into 51 per cent of the Foster and Jan nickel mines.

Foster operated between 1986 and 1994, producing around 60,000t of nickel metal and at one point supplied up to 30 per cent of the Kambalda Nickel Concentrator’s primary feed.

Jan meanwhile was a shaft mine with nickel shoots down to a depth of 560m which produced 30,000t of nickel metal up to its closure in 1986.

Jan had high grade nickel sulphides recorded below the mine workings, indicating the mineralised system may be open at depth.

Kambalda Nickel Boom
The Jan shaft produced 30,000t of nickel metal up to its closure in 1986. Picture: Lunnon Metals

Both Foster and Jan missed the mid 2000s nickel revival – characterised by the revival of WMC’s idled Kambalda mines by Mincor Resources (ASX: MCR), IGO (ASX: IGO), Panoramic Resources (ASX: PAN) and Ian and Leigh Junk’s Donegal Resources – because they were sold as part of the St Ives gold package to Gold Fields.

“The fact that they were shut and shut early in the history of the district is the quirk that saw them ultimately being sold along with the WMC gold business, which was the reason they missed that last nickel boom,” Ainscough said.

“All the companies that did buy assets from WMC obviously did fabulously well between the early 2000s and 2010-11 before sentiment and the market changed.

“They made an enormous amount of money both from mining what they bought but also having aggressively explored and found extensions of those nickel shoots.

“That is something unique about Lunnon Metals, that it gives the opportunity for two assets that missed that cycle to receive the same attention.

“We’ve called it the Kambalda playbook. We’re hoping to reproduce the successful outcomes those listed companies experienced.”


Learning from history

Since Lunnon predecessor ACH began work on the mines in 2014, Foster and Jan have been a hidden secret.

The ownership structure with minority partner Gold Fields was one aspect, but with the nickel price in the doldrums, the bounty of historic drill core sitting in the St Ives coreyard became Ainscough and exploration manager Aaron Wehrle’s best friend.

“While we were aware of historical estimates from the closure of the two mines we were very focused on doing the necessary modern technical work to be able to report JORC resources,” he said.

“With the nickel price softening quite dramatically between 2014 and this current resurgence in the nickel price, in hindsight it was a really good decision to focus our resources on that historical data.”

That work has given Lunnon a starting resource of 39,000t of nickel metal at a typical Kambalda average grade of 3.2% across its Warren Shoot, 85H Surface and Foster South deposits.

With $15 million in the bank from the raising, new drilling will take place for the first time in decades.

“We think it’s a huge opportunity now to be able to do both what we were doing previously and far more aggressively test some of the concepts we’ve generated in the meantime,” Ainscough said.

“We’ve got a pretty aggressive drill program at site.

“There’s over 12.5km of diamond drilling planned and roughly 15km of RC drilling.

“We’re starting at surface, but we’ve put some money aside to scope out the cost of potentially dewatering the top 250m of Foster mine, very much from an exploration focus.”

If all goes well, future plans may involve re-entering the mine to drill from underground platforms.


Nickel on the rise

Lunnon is one of a number of active or proposed nickel floats firing up as the market for the stainless steel and EV battery ingredient turns.

But Lunnon may be the most attractive of the lot, given its history and proximity to BHP’s Kambalda Concentrator, which will be in operation for the first time in four years once ore from Mincor’s new Cassini mine is delivered in early 2022.

Kambalda nickel boom
Lunnon Metals is in the heart of the Kambalda district dominated by Mincor. Picture: Lunnon Metals

It gives Ainscough confidence that with good exploration the project can stand up outside the EV thematic.

“My view is that if we continue to find more resources at Foster/Jan, because it is in Kambalda and the resource grade is 3.2 per cent, typically if we find new mineralisation it will be pretty good grade,” he said.

“The backdrop clearly is that people believe the electric vehicle thematic and with the net zero target that countries and corporates are setting now … it will require a lot more nickel and copper in the future, which should be good for the nickel price.

“Generally, I think everyone agrees it should be higher, but we’re determined to make sure we’re not reliant on the nickel price.”

Also on Lunnon Metals’ side is its board and management team, which features plenty of prominent WA mining identities with intimate knowledge of the Kambalda nickel space.

The aforementioned Ian Junk – Ainscough’s next-door neighbour from their Kambalda days – is a non-executive director.

PCF Capital Group managing director and Solgold chairman Liam Twigger is also on board as Lunnon’s non-executive chairman.

South African gold giant Gold Fields will have corporate executive Ashley McDonald as its representative on the board, having sold their stake in Foster/Jan into the float to become a major shareholder.