Disappointing drilling results from a nickel project in Western Australia has sent Mithril Resources shares plummeting 23 per cent to 1c. 

Three holes drilled at the northern end of the “Kurnalpi” project found no significant nickel; although the main nickel sulphide target was not reached due to unfavourable ground conditions. 

Nickel resources are usually either nickel sulphide or laterite – sulphide ores are easier and cheaper to produce than laterite nickel. 

Drill testing of this main nickel sulphide target remains a priority, but Mithril will probably need to use diamond drilling to reach it.  

Mithril Resources (ASX:MTH) share price over the past year
Mithril Resources (ASX:MTH) share price over the past year

Mithril managing director David Hutton said nickel sulphide exploration was difficult and took patience “but we are confident that ongoing exploration will be ultimately successful, and we look forward to carrying out further ground EM [electromagnetic] geophysics and drilling as soon as possible”.

Mr Hutton told Stockhead that these initial results were “probably more of a setback than disappointing”.

“The inability to drill test the main nickel sulphide horizon due to unfavourable ground conditions is frustrating; but can happen during the exploration process,” he said.

“The results do nothing to change our confidence in the project’s potential.

“Exploration success takes time and patience – we believe that ongoing work at Kurnalpi will be successful, so further work is justified.”

On the upside, a new exploration opportunity was established with a sample of historic drilling returning 1.5 per cent copper and 1.1 per cent cobalt on a new tenement in the projects southern area.

Mr Hutton said identification of a new copper cobalt target was “highly encouraging” and reinforced the project’s potential.

Mithril shares have traded between 1c and 6.6c over the past year.