The company reported a stand-out intersection from the first drilled hole, with 6 metres grading 2.14% nickel, 0.74% copper and 1.62 g/t platinum group elements (PGEs) from 46 metres.
Argonaut Securities has maintained a Speculative Buy recommendation for SGQ in its latest research update.
Following is an extract from Argonaut’s report:
Assay results from drill hole MAD152 have confirmed that the Radar prospect is a new shallow discovery within the Cathedrals Belt. The hole returned 6m @ 2.1% Ni, 0.7% Cu and 1.62g/t PGEs from 46m, including 2.6m @ 4.3% Ni, 1.5% Cu and 3g/t PGEs from 49m. Mineralisation now extends over a 5.5km strike incorporating mineralisation at four prospects, including Investigators, Stricklands, Cathedrals and Radar (from west to east). Importantly, drilling has only tested down to maximum depth of ~450m with most drilling less than 200m below surface. We believe it is improbable that a system this long will truncate at such a shallow depth. Recent stratigraphic holes to ~450m deep have proven that the host ultramafic geology continuous at depth and is still bearing Ni/Cu sulphides. Argonaut maintains a Speculative Buy recommendation.
Event & Impact: Exploration Drilling - Positive
Underneath the Radar: SGQ is planning further drilling at Radar following the high grade assays results of hole MAD152 with 6m @ 2.1% Ni, 0.7% Cu and 1.62g/t PGEs from 46m. Diamond drilling commencing this week will test for up and down dip extension to mineralisation.
Commencing a Scoping Study: SGQ has commenced preliminary work on a Scoping Study on the Mt Alexander Project. The Company has appointed environmental consultants to commence base-line flora and fauna surveys. Studies into potential mine development will commence shortly. Argonaut estimates the current mineral inventory could be initially up to 50kt contained Ni Eq. Given that all four mineralised prospects commence within 50m of surface, there is a potential for numerous small open pits. The competent nature of the granite country rock, means that pit walls could be designed at steep angles, reducing strip ratios. We believe mineralisation could either support a small on-site wash plant or tolling to a number of processing facilities within trucking distance, including Sinclair (SAR), Cosmos (WSA) or Leinster (BHP).
Plenty of room for a big discovery: Recent deep stratigraphic holes to 450m downhole at Investigators, Stricklands and Cathedrals show that the ultramafic host rock is present and containing blebby to disseminated Ni/Cu sulphides. As mineralisation in the Cathedrals Belt is characterised by pods, rather than continuous flows, the presence of sulphides is positive for proximal massive sulphide mineralisation. SGQ will now test these holes with downhole EM. More than 10.5km of the belt remains untested, including the Fish Hook prospect ~2.5km east of Radar. Fish Hook has returned the strongest geochem soil anomaly of any prospect to date.
Argonaut maintains a SPEC BUY recommendation. As SGQ is pre-resource, we do not assign a target price.