TopTung is now a ‘class-one’ nickel and copper explorer with a new project
Special report: It’s not too often a junior explorer lands itself a high-grade nickel sulphide discovery close to the surface with a simple path to production — but that’s what TopTung has done.
TopTung (ASX:TTW) recently moved to acquire Australian explorer Zeus Minerals, which has two advanced nickel and copper sulphide projects in Quebec, Canada.
The company has successfully completed due diligence and now kicked off drilling at the high-grade “class one” Alotta project.
Nickel is usually found in two main ore types – sulphide or laterite.
Laterites are harder and more expensive to mine and process, whereas sulphides are much cheaper to turn into battery grade nickel sulphate than nickel laterites and will fetch a premium price.
The acquisition of Zeus Minerals was a strategic one for TopTung, which calls nickel sulphide the “silent battery metal”.
“There’s not that many nickel sulphide deposits and the discovery rate for those is quite low,” chairman Dr Leon Pretorius told Stockhead.
“So if you can find a region like this that has some historical showings of high-grade nickel sulphide then you’ve obviously got to follow up on it.”
All the projects are hosted in the Belleterre-Angliers Greenstone Belt in the Temiscamingue area of south-western Quebec.
The project areas contain a number of drill-proven high-grade massive sulphide mineralised zones intersected by shallow drilling, and also host a past-producing copper and nickel mine.
Nickel grades of as high as 6.2 per cent from 51.55m and copper grades of up to 20.53 per cent from just 25m were uncovered in historical shallow drilling.
Normally nickel sulphides are found at least 100m underground, but the region hosts a lot of high-grade pods close to surface, Mr Pretorius says.
“Where we are drilling at Alotta the nickel mineralisation is at or close to surface, so they’re amenable to simple open-pit mining and they also contain recoverable amounts of cobalt, copper and platinum group elements. Gold is also present,” he said.
“So if you can find them and you can process them they’re very economical because there’s additional by-product credits.”
The big advantage for TopTung is that is doesn’t need to build expensive infrastructure to process all of the different commodities.
The company can simply truck mined rock about 200km (3 hour drive) to Sudbury, which already has established smelters and refineries that are built to process ores typically found in the Zeus area.
“So our focus and what we need to achieve is very simple – we just need to locate and define a few of these high-grade pods, whether that be through acquisition or exploration, and we’re off to the races,” Dr Pretorius said.
“We don’t need to build a refinery. It’s going to be a very low-cost simple process.”
Highly prospective and underexplored
The Belleterre-Angliers Greenstone Belt and the greater Abitibi Greenstone belt is considered highly fertile and hosts numerous significant deposits.
It is home to the Belleterre gold mine, which produced just under 1 million ounces of gold at an average grade of 10.73 grams per tonne (g/t) between 1936 and 1958.
Anything over 5g/t gold is considered high-grade.
Meanwhile, the second largest nickel reserve in the world, fifth largest nickel sulphide discovery ever made and eighth largest cobalt reserve in the world lie 150km northeast of the project area.
TopTung’s new landholding contains the historic Lorraine mine that produced 14.3 million pounds of copper and 6.3 million pounds of nickel. Production records from this gabbro sill (about 600,000 tonnes of ore) shows that over $100 million worth of metal was extracted in less than two years.
Gabbro sills within the Belleterre-Angliers Greenstone Belt host numerous nickel and copper sulphide occurrences.
While there are several major discoveries in the broader region, the patch of land that TopTung has got its foot on has had very limited modern exploration.
One of the previous owners, Aurora Platinum, did some drilling and uncovered several high-grade pods, but a much bigger company-making discovery in the neighbouring Sudbury Basin eventually took precedence and Aurora Platinum was eventually taken out by a major player.
“The drilling that was done there was really high-grade, and the market got quite excited about it at the time, but the downturn in the Nickel price led it to be forgotten about until now,” Dr Pretorius said.
“I think that’s where the opportunity lies for us now is to move in there and systematically explore the region.”
TopTung has started a seven-hole, 700m drilling program running 24/7 that will be completed in 10 days.
It has also started compiling data to generate follow-up drill targets.
Top notch team and strong shareholder network
TopTung is headed by Dr Pretorius, who was a key part of the Paladin Energy team that developed the Langer Heinrich uranium deposit into an operating mine — becoming the market darling in the peak of the uranium boom.
Dr Pretorius is the company’s largest shareholder followed by GTT Ventures, which is the second largest backer and TopTung’s corporate advisors. The Zeus acquisition has also brung with it a strong suite of industry players.
As part of the Zeus Minerals acquisition, Marnus Bothma also joined the board as a non-executive director.
Mr Bothma is experienced in early to mid-stage exploration having conducted numerous technical programs in Australia, Canada and Korea.
He has significant experience in multi-commodity project management and acquisition.
Mr Bothma has direct experience in the style of nickel and copper sulphide mineralisation that lies within the Belleterre-Angliers Greenstone Belt.
The proactive management team has already received all the necessary permitting and land owner agreements, and started drilling after only just completing the acquisition.
Looking mighty attractive
Top Tung is well capitalised with about $4.3 million cash in the bank. It has a market cap of $9.7 million and enterprise value of $5.4 million.
Dr Pretorius says the company is one of the cheapest advanced class one nickel explorers on the ASX, with most peers trading between $15 million and $40 million.
This special report is brought to you by TopTung.