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White Cliff Minerals Ltd: THE INVESTMENT CASE

White Cliff Minerals focuses on cobalt projects, maximising value while commodity price soars

Pending exploration results combined with those from a second drill program should allow the company to establish a resource estimate.
Drilling at Coglia Well
INVESTMENT OVERVIEW: WCN The Big Picture
The initial drill program is testing an 800-metre long section of the 5,700-metre long mineralised zone

White Cliff Minerals Ltd (ASX: WCN) has started reverse circulation drilling at its Coronation Dam cobalt project near Kookynie in Western Australia’s north-eastern Goldfields.

The drilling is targeting extensive shallow cobalt and nickel mineralisation at the central and fence line zones identified by historical drilling.

This is an important juncture in the company’s exploration program, particularly given that management recently stamped its three cobalt-nickel projects as key priorities in 2018.

Mineralisation identified at shallow depths

The 3000-metre drilling program will focus on cobalt mineralisation identified in historical drilling.

A feature of previous exploration was the occurrence of wide intersections at shallow depths.

Some of the more prominent returns were 16 metres at 0.42% cobalt and 1% nickel from 20 metres, including 24 metres at 0.23% cobalt and 0.80% nickel from 20 metres.

Another relatively broad intersection at a shallow depth was 28 metres at 0.13% cobalt and 0.74% nickel from 8 metres.

Drilling paves the way for resource estimate

The initial drill program is testing an 800-metre long section of the 5,700-metre long mineralised zone with 200-metre drill line spacing and 100-metre hole spacing.

These exploration results combined with those from a second drill program should allow the company to establish a resource estimate.

As mentioned, the cobalt projects generally are a priority, but the Coronation Dam project is of particular significance given it contained the best grades.

READ: White Cliff Minerals commences drilling cobalt targets at Coronation Dam

Coronation Dam is also in a prime location, 90 kilometres south of Glencore PLC’s (LON:GLEN) Murrin Murrin mining operation.

It is also only 45 kilometres south of GME Resources’ (ASX:GME) proposed Mt Kilkenny nickel-cobalt processing facility.

Hibberd keen to take quick advantage of cobalt price

White Cliff managing director Todd Hibberd said: “We are very pleased to commence drilling at Coronation Dam as it has the highest cobalt grades in our portfolio of cobalt-nickel projects.

“The program aims to validate the historical results and create a platform for the company to rapidly develop JORC compliant cobalt-nickel resources with subsequent drill programs.

“In an environment of rising cobalt prices, limited cobalt supply capacity and rapidly growing cobalt demand, there is an opportunity to substantially increase shareholder value through the development of the project and other promising cobalt-nickel assets in our portfolio.”

Cobalt price still flying high

Indeed, the cobalt price remains in good shape having increased more than 300% from US$23,250 per tonne in May 2016 to an all-time high of US$95,250 per tonne in March.

While there was a retracement to about US$89,000 per tonne in April, the price appears to have since plateaued and is currently US$88,750 per tonne.

Forward indicators looking sound

The Purchasing Managers Index (PMI) is a useful lead indicator of economic health, particular activity in the manufacturing sector which consumes a large proportion of cobalt.

This indicates that the demand side of the equation should provide commodity price support in the immediate term.

These numbers were fairly buoyant in April, even though China didn’t deliver its normal outstanding performance.

Compensating for this though was the European region where there were strong performances from Germany (58.1), France (53.8) and the UK (53.9).

The US was also robust at 56.5 and with President Trump looking to crank up the rustbelt, there should be significant support for the manufacturing industry.

Assay results received from Coglia Well

Aside from Coronation Dam, White Cliff has also been active at its Coglia Well project near Laverton in Western Australia.

Assay results were received for holes drilled along the first two of six lines, showing shallow and wide intervals of cobalt and nickel mineralisation.

READ:  White Cliff Minerals drills out near-surface cobalt and nickel

Among the best results were 20 metres at 0.1% cobalt and 0.7% nickel from 32 metres and 16 metres at 0.12% cobalt and 0.5% nickel from 40 metres.

Management highlighted that the initial results confirmed the high grade of cobalt and nickel mineralisation along that particular line.

It expects assays from the other lines will provide further evidence of the grade and potential scale of the Coglia Well deposit.

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