Nickel hopeful Nimy Resources aspires to replicate De Grey Mining’s success under Simon Lill’s helmBy
Tim Treadgold-
October 21, 2021
De Grey Mining is famed for its massive 6.8Moz gold discovery Hemi, within its 9Moz Mallina gold project in WA’s Pilbara.
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De Grey Mining’s (ASX: DEG) chairman Simon Lill as he ventures into nickel via the Nimy Resources IPO?
The chairman of the hugely successful gold explorer De Grey, has turned his hand to nickel as chairman of classic grass roots explorer Nimy, which has its foot on a big chunk of outback WA largely ignored by early prospectors.
Nimy is in the process of trying to raise up to $7.5 million to fund exploration of a 1,761 square kilometre tract of ground in an inhospitable location near the historic
BHP (ASX: BHP) iron ore mining centre of Koolyanobbing.
The rugged countryside, difficult access, and poor drilling conditions deterred the few explorers who did take a look before they moved on to something easier despite early sniffs of near-surface nickel mineralisation.
Similarities to De Grey’s storyNo more than drill 208 holes have been drilled into the current Nimy tenement area, which is roughly twice the size of Canberra, is a key similarity to De Grey’s story.
There is also the failure of early explorers on De Grey’s tenements to understand the geology of its Mallina project in the Pilbara region of WA’s northwest, an area best known for its iron ore.
The core problem at Mallina was in trying to apply a geological model common in the WA goldfields where most mineralisation is found in shear zones, cracks in the earth’s surface through which mineralised magma has risen before solidifying.
A belief that what applied elsewhere in WA would also apply in the Mallina project area led to a handful of modest gold discoveries, but not enough to retain interest as explorers moved on to the riches around Kalgoorlie and the broader Yilgarn province to the south.
De Grey’s secretDe Grey’s secret, which has turned a company which once wore the tag of penny dreadful when it was trading at $0.05 early last year into a $1.5 billion mid-tier success story, has been to re-interpret the geology of the Mallina region.
Rather than the gold being shear zone hosted it is now recognised as being deposited by intrusions, effectively “blobs” of mineralised magma which have pushed up into older rock layers in a process similar to a lava lamp – a tasteless lighting appliance of the 1970s.
Having found a key to Mallina’s geology, De Grey is now proceeding with a project which aims to produce 450,000 ounces of gold a year at a cost of A$1,111/oz – less than half the current Australian gold price.
Nimy’s ambitionsNimy’s ambitions for its Mons nickel project east of Koolyanobbing and 140km north of the wheatbelt town of Southern Cross, have a similar starting point – a close look at the geology to see what the handful of early explorers might have missed.
After the former WMC Resources’ early nickel hints, other companies that looked over the Mons area were mainly looking for gold – without success.
Nimy’s genesis lies in a six-year claim pegging operation by one of its directors, Luke Hampson, followed by a maiden 20-hole drilling campaign which intersected substantial widths of nickel mineralisation which have helped identify 30 additional drill targets along 80 kilometres of strike.
Some of the best intersections in that first phase of drilling by Nimy included assays such as 0.123% nickel over 169 metres starting at a depth of 3m, and 179m at 0.117% nickel from 7m, results which appears to have similarities with early drilling at the big low-grade Mt Keith nickel project near Wiluna in central WA.
Similar structures to Kambalda nickelBut more important than the thick low-grade intersections is an early WMC geologist’s report that the near-surface nickel encountered was in a setting known as a komatiite, first identified in Finland, hence its tricky name.
The importance of the komatiite observation is that they are the structures which contain most of the nickel around Kambalda, being long-solidified lava flows from volcanoes which erupted up to three billion years ago sending out long liquid trails with nickel and other minerals in the enriched lower section.
Bearing a rough resemblance to the veins on a cabbage leaf (hence the name Cabbage Leaf Geological Model) komatiite nickel deposits can be fabulously rich, with some assaying more than 10% nickel, and with a chemical composition (high in sulphur) that is ideal for making battery grade nickel.
Mons is located at the northern end of the Forrestania nickel belt which runs to the west and in parallel to the Kambalda belt and is home to a number of high-grade nickel mines to the south, including Flying Fox, Cosmic Boy and Spotted Quoll.
Initial drilling proves Mons fertile for nickelTaking Mons from a theory that it could host geology similar to Kambalda and the Forrestania mines is the primary aim of Nimy, according to Lill, who said in his introductory letter in the company’s prospectus that the 20-hole drilling program had proven that Mons was “fertile for nickel sulphide mineralisation”.
“The results show that the region shares key geological characteristics with Kambalda and has the potential to be a significant nickel sulphide district,” Lill said.
Electromagnetic survey to begin after ASX listingNimy’s managing director, Christian Price, said the next phase of exploration would start with a moving loop electromagnetic survey immediately after the company listed on the ASX.
“The result of that survey will be used to identify bedrock conductor plates that will be used to refine the nickel exploration targets for a diamond drilling program,” Price said.
“Outside of the recent nickel focused exploration program, Mons has had very limited exploration at depth and never had modern exploration techniques applied.”
Nimy’s float is being managed by Melbourne-based Raven Corporate with new shares priced at $0.20 to raise a minimum of $6 million and up to $7.5 million.
The company expects to list on the ASX on 22 November.
