Sydney-based, ASX-listed REZ was on the hunt for gold at the Springfield prospect in WA when it happened to also find nickel, which backs up historical findings by mining giant BHP and opens up the potential for further discoveries at the East Menzies project.

Led by Executive Director Richard Poole, Resources & Energy Group (ASX:REZ) was looking to bolster its East Menzies gold resource with the discovery of more of the precious metal at its Springfield prospect.

But in true Indiana Jones-style, the company stumbled across what could be the holy grail – nickel.

The news intrigued investors, who scrambled to get on board, pushing the share price up over 31% on Monday morning to an intra-day high of 4.2c.

Resources & Energy Group (ASX:REZ) share price chart

 

 

 

Interestingly, decades before CRA and BHP had both reported finding nickel in the broader Springfield prospect but decided to walk away because they were only interested in gold.

While it is still early days, the results back up the historical CRA and BHP findings as well as the potential for further discoveries at the East Menzies project in WA.

After realising Springfield was also playing host to nickel, REZ got its hands on two historical drilling reports, one by CRA in 1969 and the other by BHP in 1986.

These reports both included strong intervals of nickel sulphides.

Now if you’re going to find any kind of nickel mineralisation, sulphide is definitely the one you want.

Nickel resources are usually divided between laterite or sulphide deposits – with sulphide deposits favoured because they are easier and cheaper to process.

This is why nickel sulphides are the preferred choice of electric vehicle battery makers.

High value, near-surface nickel

BHP reported significantly high values of nickel, with a peak grade of 2.9%, and as close to surface as just 6m.

Values greater than 1% included 3m at 1.53% from 15m, 3m at 2.27% from 31m and 2m at 1.24% from 6m, according to the BHP report.

Resources & Energy Group
Borehole location plan showing geology and intervals of sulphide mineralisation

This was at the Cepline prospect in the Springfield Venn zone, some 800m north of the REZ’s recent scout drilling program.

Nearly 20 years earlier, CRA reported surface rock samples grading 0.95% to 1.43%, and drill results of 10ft at 1.49% from 55ft and 15ft at 0.77% from 170ft.

After reading these reports, REZ decided to undertake multi-element analysis of two intervals of massive and semi-massive sulphide mineralisation from one of its drill holes and reviewed previous exploration in the area.

Despite being 800m south of Cepline, results from the multi-element analysis included anomalous nickel with a peak assay of 3m at 0.16% from 34m, and 6m at 0.11% from 61m.

This same hole also returned a peak gold assay of 1m at 1.7 grams per tonne (g/t) from 53m.

“The results from the recent and historical exploration suggest that the nickel potential within the broader East Menzies project has not been exhausted. The interflow sediments, when in close contact to underlying Komatiites are prospective for nickel and base metals.” – Executive Director Richard Poole.  

“An analysis of historical exploration indicates that there has been little or no focus on this prospectivity over the past 35 years or so and follow up investigations in today’s commodity environment are warranted.”

REZ now plans to undertake multi-element analysis for nickel and platinum group elements on the three drill holes that hit the target zone.

This is aimed at assisting in identifying the nature of the mineralisation and the prospectivity of the sulphides.

 

This article was developed in collaboration with Resources & Energy Group, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.