Botswana Metals (ASX:BML) is on track to benefit on the back of a Prefeasibility Study for the Maibele North nickel project to be released in the first quarter of 2016 and an resource upgrade.
The study is expected to add value by reclassifying the project’s inventory from an inferred to an indicated and/or measured category.
There is also potential to significantly increase resources tonnes at the site.
Maibele North already hosts a resource of 2.38 million tonnes at 0.72% nickel, 0.21% copper and 0.63g/t of PGE, plus gold.
Mining licence applications have also begun on the project, offering another near-term potential catalyst for Botswana stock.
Also, the project's Takane area contains new drill targets which represent a discovery opportunity in a chronically underexplored part of Botswana known as the Limpopo Mobile Belt.
Limpopo analogues include the Albany-Fraser region in Western Australia, where the Nova-Bollinger deposit boasts 14.3 million tonnes at 2.4% nickel and 0.9% copper as well as the Tropicana Gold discovery (117 million tonnes at 2.06 g/t gold).
Maibele North is only 50 kilometres from the mining town of Selebi Phikwe, where 175 million tonnes have already been mined.
Botswana Metals' portfolio in this area contains up to 32 kilometres strike length of the same geology.
The right partner
Botswana Metals is developing Maibele North under a joint venture with Botswana government-gowned mining company BCL Limited, which has pursued an aggressive exploration program at the site to date.
BCL is hungry for ore after mining 175 million tonnes to 1 kilometre depth over the past 50 years.
The company's mining and smelting operation is supported by a town of more than 50,000 people and employs 5,000 people from the local area.
The joint venture with Botswana Metals is a priority exploration play for BCL as the project lies only 55 kilometres from the BCL mining operation.
BCL is funding the joint venture project until completion of the Bankable Feasibility Study and is funding exploration for potential new discovery areas at Takane.
An offtake agreement is already in place with BCL.
Exploration results hinting at upside
Recent drilling at Maibele North has delivered significant sulphide mineralisation along strike to the east of the project resource.
This includes several zones of massive and semi-massive mineralisation.
These new intersections are both infilling and adding depth extents to the new discovery zone.
Step-out drilling in November returned the following results:
- 4.37 metres: Massive, semi-massive and strongly disseminated sulphides (MARD0146), including 0.15 metres massive sulphide (1.04m + 0.35m), 0.86 metres cumulative thickness semi-massive sulphide (0.72m + 0.14m);
- 2.1 metres: Massive and stringer sulphides (MARD0148), including 0.29 metres massive sulphide; and
- 0.83 metres: Strongly disseminated and stringer sulphides (MARD0145).
The upcoming Prefeasibility Study at Maibele North could deliver a significant catalyst to Botswana Metals stock by improving confidence in the resource and crystallising the potential marketability of the property.
Additional catalysts may be realised through new discoveries on highly prospective VTEM anomalies in the Maibele North area.
A new discovery on the Limpopo Belt could be a game-changer for Botswana Metals, especially considering the Takane prospect's similar style of anomalies to the Nova-Bollinger discovery.
Maibele North is expected to benefit from long-term nickel prices being underpinned by a dearth of planned nickel project and a decline in the production of cheaper nickel pig iron.
LME nickel stockpiles have been declining since mid-2015, which along with an ongoing ban on exports in Indonesia, has prompted most forecasters to predict nickel price rises in the medium to long term.
Botswana Metals is supported in the context by a strong local partner in BCL with 50 years of mining experience in the region.
Importantly, BCL’s prioritisation of its joint venture work with Botswana Metals is underpinned by a need for more material at its nearby plant, which is accessible by truck.
Also, BCL is funding until completion of the Bankable Feasibility Study, which is a critical advantage in a challenging capital market.
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