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Mining Projects Group: Upstart Explorer Has Sirius Nickel Strength

Published: 15:14 14 May 2014 AEST

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Mining Projects Group (ASX: MPJ) has aspirations to find another Sirius Nova style nickel discovery.

With the team it has on board, they may have arrived.

Sirius’ Nova and Bollinger nickel deposits had Newexco’s Bill Amann instrumental in their discoveries.

Newexco is now behind MPJ.  Newexco's Bill Amann and Adrian Black have agreed to take shares in MPJ for their services.

That shows their confidence in MPJ making a major nickel discovery in Western Australia.

Neil Hutchison will also take shares in MPJ for his services.  

Neil was the geologist behind the discovery of the Windarra Nickel Project & Cerberus Nickel Deposit, and the Cosmos Nickel Project.

Between Newexco and Neil they have found most of the major modern nickel discoveries made in Western Australia.

Sirius went from $0.05 to $5…with Newexco.  MPJ has Newexco and Neil Hutchison.

China’s massive International Mining Inner Mongolia Geology & Minerals Group also likes what they see at MPJ’s 
tenements. 

IMMG is looking to farm into MPJ’s tenements.  But there could be other groups wanting “in” as well...

We think we’ve found the next “nickel” in the rough.

Sirius Resources sparked “The Great Nickel Rush” in WA’s Fraser Range when it hit not one, but two mammoth nickel deposits, resulting in its share price rocketing from $0.05 to $5 in matter of months.

That’s a 100 bagger.

Not surprisingly, no less than thirty explorers are frantically trying to make the next monster nickel discovery in the region.

Again, the same geophysicists that were behind Sirus’ Nova nickel discovery - Newexco have agreed to accept shares in MPJ instead of cash.

Just in case you have been living in Alaska for the last 12 months, here is what happened with Sirius (ASX:SIR). Sirius was trading unloved at $0.05 – then with two huge nickel discoveries, first Nova, then Bollinger, it became a 100 bagger, creating fortunes for those who bought in on the ground floor.

The remote Fraser Ranges became the new final frontier, lined the pockets of Sirius shareholders, and sparked a nickel rush of grand proportions.

MPJ has three projects, one that has already found high grade nickel.

Fraser Range East


Newexco has commenced the first stage Moving Loop Electro Magnetic Survey (MLEM) at the 100% owned Fraser Range East Project.  This is located approximately 70km from the Nova-Bollinger Deposit.

The MLEM programme has been designed to test for the presence of bedrock conductors which may be associated with nickel mineralisation. 

The program is testing for a Nova style and size conductor.  EM surveys are designed to find intrusive hosted conductive bodies in the ground.

Another Fraser Range explorer, Segue Resources found two separate ground EM conductor bodies at its Plumridge Nickel Project using the very same MLEM survey.

It has a valuation over 4 times that of MPJ.

So look at the upside in MPJ’s shares.

The proposed acquisition of the Balladonia Tenement adjoining MPJ’s existing Fraser Range East Project would expand MPJ’s total exploration area to 601.4km². 

This project borders Fortescue Metals Group and Sirius Resource’s tenements located to the south-east of the Nova-Bollinger Nickel deposit.

MPJ wanted more ground at Roe Hills due to the 30km belt of ultramafic rocks, which is what you want in nickel 
discoveries and approximately 50 kms North-West of Sirius’s Nova and Bollinger discoveries.

Roe Hills


Unlike other early stage nickel explorers, MPJ’s tenements have a high grade historical nickel find to their name already at Roe Hills Nickel Project located 110km east of Kalgoorlie.

Roe Hills has a 40km strike length of highly strained greenstone belt.

So it is a massive area of nickel potential.

Historical exploration at Roe Hills was completed by WMC Resources Ltd and Inco Ltd between 1995 and 2006 were targeting nickel sulphides.

Both programs consisted mostly of shallow aircore holes for geochemical identification. 

Of the holes that were drilled into the fresh rock, komatiitic ultramafic rocks were intercepted as well as low grade nickel sulphide. So they didn’t find the source.

But now MPJ has combined all drilling information, existing electromagnetic data and geochemical results to vector in on zones of significance.

Talc Lake Prospect

The Talc Lake Prospect is located at the southern edge of the Roe Hills project on E28/2117 and is considered the one with the most potential of finding the next nickel discovery.   

Previous drilling for nickel sulphide mineralisation there defined three prospective ultramafic flows.

These are important as they are analogous in style to that seen at Kambalda. 

There is strong encouragement to continue exploration at depth and along strike - based on historic drilling results which included: 

- 0.5m at 6.15% Ni from 155.5m in RC drill hole ROE 114; 
- 1.9m @1.65% Ni from 131.55m; 

Significant areas of the ultramafic basal contact at Talc Lake remain untested at depth, to the north and south of high grade historic intercepts.

Now it is up to Neil Hutchison who uses what could be termed “Predictive Geology” in unearthing nickel discoveries to find where that “smoke” comes from.

As a director of MPJ, Neil will provide expert knowledge in the exploration of the Company’s portfolio.

So at Talc Lake it’s all about finding where that “smoke” came from with the nickel hits. Neil is taking a different approach than previously.

He is looking at database and geology different traverse and drill spacing, understanding the rock and the nickel:

No close space drilling but wide space drilling.

Find where source is, go deeper and use downhole EM.

To date, 3 komatiitic flows and nickeliferrous gossan outcrops have been identified. The next phase of exploration may involve, but not limited to, detailed large moving loop electromagnetics (MLEM) over significant areas of the belt to identify further conductors for drilling.

Now who better than Bill Amann of Newexco will conduct geophysical review and recommendations on final drilling programs?

So expect plenty of exploration news flow for MPJ, which moves markets in the lead up. 
 
But there is also gold.

Gold was also intersected from historic drilling including 24m @1.01g/t  gold from including 2m @11g/t Au and another of 5m 13.7g/t gold from 48m.

Dingo Range Tenements 

The Dingo Range Tenements include four mineral tenures comprising a total area of 326.8km². The tenements border the Rox Resource’s Mt Fisher Project and Cullen Resource’s Mt Eureka Project on both the east and West sides.

Next steps 

So there is opportunity to discover massive sulphide nickel mineralisation and gold mineralisation at Roe Hills.  

Where there is smoke there is fire.

The opportunity is currently defined by three key indicators: 

1. Evidence of a nickel and gold mineralising process within the Roe Hills have been confirmed; 
2. Identifiable targets for nickel sulphide mineralisation have been interpreted from the electromagnetic data; 
3. Geological units located under thick surface cover have not been tested 

This is where Newexco’s Bill Amann comes in.  He will be involved in the lead up to drill programs at Talc Lake, Roe 1 and Roe 2.

Using his considerable experience interpreting electromagnetics for massive nickel sulphides and the design of exploration programs - which led to the recent discoveries at Spotted Quoll and Nova. 

Let’s recap.

So MPJ is located smack bang in the epicentre of the hottest nickel sulphide exploration province in the world.

It’s no wonder that the nickel industry experts instrumental in finding most of the major nickel discoveries in Western Australia are happy to take shares in MPJ.

Staged Exploration


MPJ’s exploration program is a continuous prioritisation process, where more intensive work is to be conducted on a smaller number of progressively more prospective targets.

Currently MPJ’s aim is to systematically find drill targets, honing in on those with the highest potential nickel sulphide prospectivity. 

Here is MPJ’s technical expert and nickel sulphide specialist Neil Hutchison outlining MPJ’s exploration plans and exactly how to find the next nickel discovery. 

We did a double take when we first looked over the company, and compared MPJ’s market cap of $2.4 million against the other companies in the region like Segue Resources valued at $11 million.

That is 4.5 x the value of MPJ. 

MPJ has multiple near term price catalysts, with a focused, progressive, and impressively organised exploration campaign that is already in progress. This campaign will evaluate and prioritise targets. As well as China's IMMG in the mix.

China’s IMMG likes what they see 

Don’t forget...there is a Chinese partner sitting in the wings. As well there could be other companies looking to joint venture with MPJ – no doubt.

China’s IMMG has already signed a framework agreement which could lead to an investment and joint venture. It could be an investment in the Roe Hills (Talc Lake) and Fraser Range tenements. 

The International Mining Inner Mongolia Geology & Minerals Group Co. Ltd, is a massive  Chinese corporation.

So right now is a potential opportunity to scoop up the best exploration companies at undervalued, bargain prices. 

Helped along by the star commodity of the hour - nickel.  

Why Nickel?


You might think the current sentiment towards mining stocks means limited upside for junior metal explorers.

Even if nickel prices stay where they are, a good discovery could still light a fire under the share price – given that Sirius currently sits at over $3.05 a share – 61x what it was before they drilled the Nova eye.

Nickel is one of the best commodity plays at the moment. There is no doubt and one for the portfolio.

Nickel is the best performing commodity.

Nickel has climbed to US$20,925 a tonne, to a 27 month high. This is based on supply concerns.

Indonesia’s ban on unprocessed export ore has been a key behind that.

Indonesia had accounted for 18-20% of global nickel supply, shipping 41.5 million tonnes of nickel ores in the first nine months of 2013.

Rising tensions between Ukraine and Russia – with Russian President Vladimir Putin saying the country was testing its combat readiness, contrasting with claims earlier this week that it was pulling back from the Ukraine border – could add further pressure if more economic sanctions are placed on Russia, which is home to Norilsk Nickel, the biggest producer of refined nickel.

This is likely to be helped by Glencore Xstrata saying earlier this week that output from its Koniambo ferronickel plant – also in New Caledonia, was below expectation due to various factors and that forecast full-year production of 26,000 tonnes is being reviewed.

Deutsche Bank analysts have forecast that nickel could reach US$27,000 per tonne.

Investing in speculative explorers carries high risk, high return – there is simply nothing certain with these companies.

Price Catalysts: Are there upcoming catalysts?

So MPJ is not known by many, has the expertise of those geologists that made the nickel Nova/Bollinger and other major discoveries in Western Australia, has an agreement with China’s IMMG and has a tiny tiny market cap.

Talk about under the radar!

As targets are refined, fieldwork commences and drilling programs draw closer, MPJ’s activities will increase, leading to potential for a market re-rating.

This exploration work should culminate in multiple, high prospectivity, drill-ready targets which is all important in current markets. 

Conclusion

MPJ stands out from the herd in several key areas, particularly:

Genuine likelihood of a significant discovery, with subsequent share price appreciation.

Potential investment from a Chinese or other partner at a higher price than currently. 

Miniscule market cap, much smaller even than Sirius pre-discovery, and before the nickel potential of the Fraser Range was known; savvy, focused geologists and management with shares in MPJ so they are aligned with success and making a major nickel discovery to ensure momentum. 

Level of market excitement expected in the lead up to and during drilling.

With high impact exploration begun, likely to correspond with further strength in the nickel price, investors (and prospectors) will be taking a very keen interest!

With a market cap of just $2.8 million, this tiny company has started exploration at Fraser Range East with a high impact program, high probability drilling not far away, and is located smack bang in the epicentre of the hottest nickel sulphide exploration region in the world.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

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