Six months ago, when nickel was selling for more than $US7 a pound, the share price of St George Mining would have been rocketing higher – if it had then been reporting the sort of exploration results recently obtained at its Mt Alexander project in WA.

Unfortunately, excellent grades such as last week’s 8.03 per cent nickel recorded on an X-ray fluorescence (XRF) device over 6.39 metres of drill core, could hardly have been reported at a worse time, just before the nickel price took a fresh downward plunge to less than $US5/lb.

At $US4.89/lb nickel is back to exactly the same price it was at this time last year with the retreat wiping out the recovery and tearing a hole in the argument that nickel is poised to boom as a battery metal.

Novice investors have been running scared of the latest nickel-price crash, marking St George down from a high of 19c earlier this month to 16c, the same price as mid-June.

Seasoned investors have taken the rapid price (and mood) swing in their stride because there is no metal more prone to extreme price moves than nickel; boom today, bust tomorrow (and back again).

The cause of the latest 30 per cent fall in the nickel price is the same as every other fall in the 50-year history of nickel in Australia; too much supply bumping into declining demand for stainless steel, the major use of nickel.

Batteries, which have become the over-promoted tonic for a wide range of metals, might one day come to the aid of the nickel sector, especially if a demarcation develops between the sort of nickel St George has discovered and the low-grade laterite material from Indonesia and the Philippines which has flooded the Chinese stainless-steel industry.

Nickel, as someone once said about oil, ain’t nickel. Or at least that’s the theory with St George’s “sulphide” nickel, believed to be perfect for conversion to battery grade metal, whereas laterite nickel is believed to have a single major use, as stainless-steel feedstock.

In time, batteries might drive nickel, but getting to that point is a slow-moving process even if the world’s biggest producers, including Russia’s Norilsk and Australia’s Nickel West (BHP), would like to see the development of a two-tier market with high-grade material attracting a price premium.

Splitting the nickel market into two classes will take time, and might never actually happen thanks to Chinese metallurgists finding a way to get battery grade nickel out of laterites.

A better way to see nickel is as a metal which is likely to see-saw with market demand with the determining factor for investors being grade; the higher the better, and preferably not far from the surface.

At first glance that appears to be what St George has at its Mt Alexander discovery which is located near the heart of a nickel-rich region that is home to some of the world’s best nickel mines, including Mt Keith, Cosmos and Perseverance.

Discovered decades ago by BHP’s Nickel West Division (when known as Western Mining Corporation), the Mt Alexander mineralised system broadly follows a geological structure known as the Ida Fault which runs south towards Kalgoorlie and north towards Wiluna.

St George’s involvement is via a joint venture with the nickel-mining specialist, Western Areas, with St George doing all the spending to earn a 75 per cent stake.

Exploration results have been encouraging, though for the average investor they have also been hard to follow with too much geological gobbledegook and not enough clear explanation from management.

The starting point in finding a way through the technical chatter to what is a good underlying story is in understanding that Mt Alexander is the over-arching project name, within which are three exploration targets; Investigators, Stricklands and Cathedrals.

As if to confuse a casual reader, each of those three discoveries lie along a stretch of ground called the Cathedrals Belt which has the makings of a large mineralised system if it can be found that the different discovery areas are connected.

If that’s the case, and if is a big word in geology, then St George could be sitting on a significant nickel discovery stretching along a zone measuring 4.5 kilometres.

The nature of nickel deposits in WA is that they are generally found in relatively narrow structures, sometimes flat-lying or gently dipping like the ancient lava flows they are (komatiites) near the home of Australian nickel at Kambalda.

St George is yet to establish exactly what it has at Mt Alexander but the fact that it has made three separate nickel-rich discoveries along what looks to be a channel of mineralised events is quite encouraging, even if the nickel price is not.

All the company can do is push ahead with its exploration program and hope that the global forces buffeting the nickel price, such as the China v U.S. trade war, abate at some stage – which they always have in the past.

For investors with patience, and the time to decipher the company’s geology-heavy reports, St George could be a rewarding punt. It has made a discovery, it is now a case of proving how big and whether it has commercial significance.