Botswana Metals (ASX:BML) is building up to a highly anticipated infill drilling program at Maibele North in Botswana, which has the potential to lead to early cash flows.
The 8200 metre program is designed to upgrade resources to Indicated from Inferred, evaluate the economic potential to mine the ore at Maibele North and process it through the existing BCL Processing and Smelter operations.
The smelter is located at Selebi Phikwe, which is only 55 kilometres away from the BML resource.
Botswana Metals is already in a joint venture at Maibele North with BCL Limited - which is owned by the Botswana Government.
The joint venture completed a 6000 metre drill and exploration program in 2014.
The longevity of the BCL mine is dependent on additional ore outside of its existing nickel resources being made available.
Botswana could potentially provide ore to the BCL mine and smelter.
Already two drill rigs have been deployed to site with up to four rigs planned to be used in this aggressive program.
One of several step out holes planned will test an EM anomaly 1 kilometre to the East of the Maibele North resource model.
The program will comprise both reverse circulation and diamond drilling.
Currently Maibele North hosts 2.38 million tonnes at 0.72% nickel, 0.21% copper and 0.63g/t 4PGE+Au using a 0.3% nickel cut-off grade. The resource was calculated based on the primary (sulphide) mineralisation only, and is open to the east, west and at depth.
With a market cap. of circa $5 million, Botswana Metals is leveraged to exploration success.
The company is set to start drilling an extensive reverse circulation and diamond program covering 8200 metres, targeting an upgrade in confidence to the current resource.
Considering its joint venture partner is BCL Limited, which at the same time is running out of ore to process at its smelter, Botswana Metals has positioned itself for potential cash flows.
While it is still early days for Botswana Metals, drilling success would position the company for a re-rating.
Catalysts from drilling:
- Resource Upgrade: Infill drilling to allow a resource upgrade to Indicated status suitable for undertaking pre-feasibility studies.
- Resource Extension: numerous geophysical and mineralised target zones along strike of the current resource remain untested. Any additional resource tonnes will add significant upside to mining feasibility studies
- Metallurgical and Geotechnical: Collection of further met samples is required to further advance the positive recovery test work so far undertaken. Geotechnical drill holes are required to allow necessary engineering and mine planning for feasibility studies.
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