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Aug 2014 - Viable PGE Orebody

Has Sirius discovered Australia's first viable PGE orebody?

Following up a known historical intersection by Anaconda in the 1970s of ~23m @ 0.56%Ni (incl 2.1m @ 1.27%Ni & 0.13%Cu), Sirius "hit the jackpot" with their first drillhole at their Taipan prospect on the Polar Bear peninsular of Lake Cowan. That drillhole (SPBD0046) had an intersection from 104.4m of 4.1m @ 3.8%Ni, 2.45%Cu & 0.08%Co and 0.89g/tPt + 1.60g/tPd (incl from 106m of 2.15m @ 5.84%Ni, 3.73%Cu, 0.12%Co & 1.10g/tPt + 1.65g/tPd).

Those PGE (platinum group element) values probably did not raise many eyebrows, except that they are comparable to the PGE grades being mined at Ngezi and Mimosa on Zimbabwe's Great Dyke (see the Aquarius and Zimplats October 2002 reports available on www.eagleres.com.au).

In February 2010, Sirius discovered a Ni-PGE gossan on an island (called Halls Knoll) in the Lake Cowan salt lake near the Polar Bear shaped peninsular, north of Norseman as shown. About 20 samples were taken from the 40m long gossan, with grades of 0.5% to 1.0%Ni, 0.4% to 3.1%Cu, and combined Pt + Pd mostly ~4g/t to 15g/t. At the time a ~40m long gossan apparently did not receive much attention, even though most enriched gossans I have encountered are usually over much smaller distances.

Completed assays of the full 10-mineral PGE suite were reported in March 2010, with a grade range for the gossan samples mostly Pt >1g/t (1.46g/t to 3.95g/t), Pd >1g/t (1.55g/t to 22.66g/t), Rh >0.7g/t (0.73g/t to 1.93g/t) and Au >0.01g/t (0.01g/t to 0.28g/t), for resulting 4EPGE grades >5.0g/t (4.96g/t to 24.94g/t), (ignoring the Ru, Ir & Os values as usual). Bearing in mind of course that minerals in a gossan are remobilsed and enriched.

Sirius commented in March 2010 that, "the gossan was located within a high magnesium ultramafic unit and not on its basal contact, suggesting possible structural remobilisation along a shear zone, and spatially detached from its original location". It was also stated that high palladium values are diagnostic of gossans derived from massive nickel sulphides like those at Kambalda.

Some historic near surface drillhole results (1968 to 2008) were reported in July 2010 of typically 14m to 20m @ 0.4%Ni to 0.6%Ni, although there was an intersection in ~1970 of 2.23%Ni over 1.13m from 29.4m (HKD4) and 5.7%Ni over 0.15m from 100.3m (HKD1). While another gossan (Dundas) near the surface of the salt lake was discovered in Jan 2011 with grades of 0.8%Ni, 2.8%Cu & 3EPGEs of 8.4g/t (1.8g/tPt +5.6g/tPd+1g/tRh).

However, subsequent drilling only delineated ~6m to 10m @ ~0.2% to 0.4%Ni & ~0.3g/tPt +Pd, so SIR switched to focus on gold exploration and has identified gold mineralisation (mostly >4m @ ~2.5g/t to 5g/t) under the Lake's surface in the NW/SE trend  between the Higginsville gold mine region to the NW and the old Killaloe Mine to the SE, but the target area is fairly large.

The Zimbabwean PGE grades for Mimosa (Aquarius) in October 2002 (prill split so divide by the MCF of 96%) were : Pt 1.92g/t, Pd  1.47g/t (ie Pt +Pd = 3.39g/t, Pt/Pd ratio 1.31x), Rh 0.17g/t, Au 0.29g/t (ie 4EPGE 3.85g/t) over 1.70m (4EPGE 6.55g-m). And for Ngezi (Zimplats) measured 2013 ore resources: Pt 1.79g/t, Pd  1.43g/t (ie Pt +Pd = 3.22g/t, Pt/Pd 1.25x), Rh 0.15g/t, Au 0.26g/t (ie 4EPGE 3.63g/t) over 2.20m (4EPGE 7.99g-m).

On the same basis but excluding Rh(odium) and Au, as the assays have yet to be completed and reported, and (admittedly) using the intersected downhole width because the true width has yet to be reported :

For Taipan's Discovery hole SPBD0046 from 104.4m: Pt 0.89g/t, Pd  1.60g/t (ie Pt +Pd = 2.49g/t, Pt/Pd ratio 0.56), Rh nya (not yet available), Au nya (ie 4EPGE 2.49g/t) over 4.10m (4EPGE 10.21g-m). And from 106m : : Pt 1.10g/t, Pd  1.65g/t (ie Pt +Pd = 2.75g/t, Pt/Pd ratio 0.56), Rh nya, Au nya (ie 4EPGE 2.75g/t) over 2.15m (4EPGE 5.91g-m).

Taipan's second drillhole ~1km further north and as reported on 21 July 2014, drilled through a number of horizons of blebby and disseminated to trace nickel sulphide intervals between 49.5m and 420m, with remobilised copper-nickel sulphides near the end of the drillhole. The drillhole had not yet been assayed for nickel, copper or PGEs as at 21 July 2014.

Sirius drew comparisons with units in typical Australian nickel deposits at Kambalda and Mt Keith,  in which such nickel deposits range from high grade massive sulphide lenses (eg Kambalda style : Long, Otter Juan, Cosmos, Silver Swan) to large low grade disseminated (eg Mt Keith style : Mt Keith, Honeymoon Well, Black Swan, Cosmic Boy) with intermediate examples having characteristics of both styles such as Perseverance and Maggie Hays.

Sirius also commented that the ultramafic sequence at Polar Bear is also complexly folded and very thick, possibly structurally thickened by thrust faulting. This also occurs at Kambalda and Widgiemooltha and can result in repetitions of the prospective basal horizon on parallel trends. Such thrusting can also cause remobilisation of nickel sulphide mineralisation and produce high grade massive sulphide deposits (like Flying Fox, Spotted Qoll and Emily Ann).

A subsequent review by SIR of historical reconnaissance electromag (EM) data highlighted a number of untested EM conductors as shown in Figure 1. One of these conductors is apparently ~500m long and located ~500m on strike SE of the Taipan SPBD0046 Discovery hole in which the massive nickel-copper sulphide zone was intersected.

Admittedly Taipan's combined Pt + Pd grades are lower in SPBD0046 at 2.5g/t to 2.75g/t compared to the Zimbabwean 3.2g/t to 3.4g/t, BUT the nickel and copper grades of the Zimbabwean deposits are only 0.10% to 0.16%Ni & 0.07% to 0.12%Cu.

The nickel and copper percentages sound minimal but in a PGE orebody they are essential when it comes to metallurgical recovery, because they are the collector minerals for PGEs. If they are not sufficiently present in an orebody,  then they have to be added and then removed again - which happened to one of the Bushveldt PGE orebodies in South Africa.

However, in the Taipan discovery drillhole the massive grades were significant at 3.8%Ni & 2.45%Cu over 4.1m and 5.84%Ni & 3.73%Cu over the included 2.1m interval shown in Figure 1. Taipan's copper grades are unusually high, with a Ni/Cu ratio of 1.55x- which is also relatively high.

Based on reports that we/ERA have written on various nickel orebodies in which the copper grades have been disclosed in Australia according to:  Ni%, Cu%, Cu/Ni ratio: Long Nickel (4.0, 0.29, 13.8x); Lanfranchi (2.75, 0.20, 13.8x); Widgiemooltha (Titan [Armstrong, Widgie, McEwen]: 1.6, 0.64, ~2.5x); Savannah (1.3, 0.53, 2.5x); and in Zambia : Munali (1.2, 0.13, 9.2x). For all of Mincor's operations in 2005  (Mariners, Miitel, Redross & Wannaway), with then respective Ni grades of (1.9-2.2, 2.2-3.0, 2.5-3.0, 1.6-2.2), the copper content was ~10% of the nickel content inferring an Ni/Cr of ~10.x

We do not have the Cu grades for Cosmos or are even aware if they exist at Mt Keith. The copper grades at (then LionOre's) Emily Ann and Maggie Hays in 2002 were regarded as zero (with Cu by-product credits in DH03 of $0.5m and Co at $1.25m with Ni revenue then at $59.2m).

The closest comparison Ni/Cu ratio wise is actually with (then LionOre's) Tati nickel mine in Botswana, in 2002 with Phoenix probable reserves (0.56, 0.34, 1.7x) and Selkirk remaining ore resources (2.43, 1.62, 1.5x). Since by comparison for Taipan's SPBD0046, the 4.1m becomes (3.8, 2.45, 1.6x), and 2.1m (5.84, 3.73, 1.6x). 

Looking back at the March 2010 Polar Bear reporting, in the Halls Knoll gossan quite often the Cu grades are higher than the Ni grades, e.g. PBHK: 02: (0.52, 2.27, 0.2x, 4EPGE 12.7 [Pt/Pd 0.45x]), 07: (1.09, 0.29, 3.8x, 5.8PGE [2.3x]), 13 : (0.23, 0.45, 0.5x, 16PGE [2.0x]) and 20 (0.27, 0.44, 25PGE [0.06x]), and similarly at the Dundas gossan (0.8, 2.8, 0.3x) - but gossans are known for the remobilisation of minerals.

At Kerry Stevenson's extremely well attended (>180 people/investors - which caused Kerry to remark "the market's turned") Symposium evening in Sydney on 22 July 2014, Alistair Cowden presented his Altona company. I spoke to Alistair afterwards (having first met him when he was an exploration geo with Delta Gold logging drill core at Hartley Platinum in Zimbabwe, quite a few years ago).

I asked Alistair what he thought of the PGEs at Polar Bear, to which he remarked "look at Raglan, there are some similarities in various parts of Australia". Raglan of course being the Canadian Ni-Cu-PGE mine and region once owned by Falconbridge and now owned by Xstrata / Glencore.

A paper given at the 11th International Platinum Symposium June 2010 by Simon Jowitt from www.academia.edu/245199 entitled "New Insights into the Geology and Mineral Potential of the West Raglan Ni-Cu-PGE Project, Cape Smith Fold Belt, Quebec", contains a very detailed map on which can be seen on screen:  the various deposits with Ni%, Cu% and PGE gt/ in the ~250km long Raglan belt. Intersected widths appear to often be very high at ~35m to 50m in ultramafics, peridotite boundaries, such as in the Frontier zone of West Raglan with 36.4m at (2.66, 1.1, 2.4x, 2.54PGE).

The article does not specify if the PGEs are 4E or 6E. 4E or 4 element is actually 3 P(latinum) G(roup) elements + Au (gold). 6E when quoted often includes Ruthenium, Iridium and Osmium which when treated are usually lumped in with Co as by-product credits. The value is usually in the Ruthenium and Cobalt. Iridium was often not much and Osmium used to be very unstable with limited uses, and hence was usually ignored. The main value items are Pt, Pd, Rh & Au or 4EPGE.

The Raglan mine itself is (2.9, 0.8, 3.6x), with Allammaq (1.3, 1.52, 0.9x, 4PGE), Mesamax (1.9, 2.5, 0.8x, 4.4PGE), Expo (0.78, 0.79, 1.0x, 1.7PGE), Mequillon (0.78, 1.0, 0.8x, 3.5PGE) and Ivakkak (1.2, 1.5, 0.8x, 3.5). We have not visited the Raglan area and hence have not seen ore samples from that region to draw any comparisons with Taipan or other orebodies.

SPBD0046's Ni & Cu grades are clearly significantly higher than any of the comparisons, however, such orebody comparisons may have higher grade zones that have been diluted down to result in the overall reported resources, reserves and even intersections.

The SPBD0046 drillcore shown in Figure 1, in our / ERA opinion, resembles a bas/bas (basalt/basalt) contact immediately above and below the distinctive ~2.2m intersection, with the sulphides themselves remobilised as shown. It was commented that there are ultramafics above and below the ~30m core interval that we looked at (and some have been intersected in SPBD00047).

However, the Taipan intersection does not resemble any Kambalda / Widgiemooltha lava flow-types that we/ERA have seen before, so perhaps Taipan is a completely different type of Ni-Cu-PGE orebody

Consequently, it is going to be interesting to see how Taipan unfolds, especially the Pt and Pd (and possibly other 4EPGE) grades, together with the Cu percentages and Ni/Cu ratios.

Although it is at a very early stage, Australia may have its first viable PGE (actually Ni-Cu-PGE) orebody - and discovered by Sirius at Norseman - yet another discovery in a relatively well walked over area of Australia!

Disclosure and Disclaimer : This article has been written by Keith Goode, the Managing Director of Eagle Research Advisory Pty Ltd, (an independent research company) who is a Financial Services Representative with Taylor Collison Ltd.

Figure 1. Sirius Resources' SPBD0046 Nickel Sulphide Taipan Discovery at  Polar Bear GDNaug14-2

  • Written by: Keith Goode
  • Friday, 01 August 2014