It is fantastic to see Drake's impressive success here, with drillcore photos of the sulphides, and reported successive intersections of 9m, 15m and 31m of 10-30% total sulphides, within a 200m intersection of nickel and copper bearing sulphides starting from just 10m below surface.
Reiterating my comments of a month ago, pre-drilling, this mineralised body actually is a genuine Nova look-alike, despite the fact that it is on the other side of the world. The nickel sulphides at Granmuren occur in the same geological setting, in rocks of the same age and type, and have been produced same geological processes as those at Nova.
Not only that, but Drake as a Company is something of a Sirius look-alike: both companies were on the financial bones of their arse, with market caps of $7m and $9m respectively, when they clenched their sphincters and went out and drilled the best geophysical target that they had. And both have been rewarded with stunning success.
Who Dares, Wins!
That is about as far as the analogy goes though. When it comes to the question of the nickel grade required to make their discoveries economically-mineable, Sirius and Drake are in very different positions. Sirius needs very much higher nickel grade than Drake. Drake is in a much better position.
Whilst there is little doubt now that Sirius's Nova deposit will be economically mineable and probably highly profitable, their capital and operating costs will be very much higher than those for Drake at Granmuren: 1. The Nova orebody lies at between 100m and 300m depth and must be mined as a capital-intensive, high cost underground operation, 2. It is located in an extremely remote and undeveloped corner of Western Australia, on the edge of the Fraser Range National Park, where everything must be brought in overland by road and the whole operation and infrastrucute built from scratch, 3. It will require a 100km spur railway line to be built west to Norseman, or 250km of roads to be built and upgraded, and major trucking facilities and costs to transport the concentrate to the port of Esperance 4, It will then need handling and ship-loading facilities to be established at the now environmentally-hypersensitive port of Esperance (after Magellan Metals apparently poisoned the town with their poor lead concentrate handling procedures), and 5. It will then need the concentrate to be shipped to the Eastern States or to Scandinavia to be sold to a nickel smelter.
Drake's nickel discovery at Granmuren in Sweden on the other hand could not be in a more economically-favourable position or location: 1. It is a very thick body of bulk-tonnage mineralisation that states just 10 metres down, under thin glacial gravel cover: the ideal situation for low cost, open pit mining, 2. All the necessary infrastructure is already in place: grid electric power, roads, railways, skilled mining workforce, accommodation and supplies, and 3. the nickel smelters that would buy Drake's concentrate are close to the project and directly accessible by rail and road (the very same smelters that Sirius may be selling to from the other side of the world, with all the trucking/rail/handling/shipping costs that that would entail).
The relative advantage of all this for Drake is that if they establish a bulk-tonnage, open-pit mining operation at Granmuren, they actually only need to double the sort of assay grades that they have got in their earlier drilling at Granmuren for the deposit to be economically mineable.
For example, the equivalent Hitura copper-nickel deposit, in the same rocks just across the Gulf of Bothnia in Finland, which supplied the same smelters, was mined at an overall head grade of just 0.56% Ni, 0.2% Cu and 0.2% Cu, at a time when the nickel price was well below its present $16,300/tonne.
So Drake are in a very good position indeed at Granmuren. And that is why the managing director is so excited. He knows how low economically feasible grades are at that location and how close they already are to achieving them. And he also knows the significance of the immense width of this initial sulphide intersection and the fact that it starts at what is effectively the ground surface.
And not only that, but this discovery at Granmuren is looking the first major nickel discovery on the Swedish side of the Gulf of Bothnia. Whereas the Finns already have half a dozen nickel mines in the exactly same rocks on their side of the gulf.
And if you look at Drake's announcement of September 12 2012, the first thing that Drake did after they made the initial nickel sulphide discovery at Granmuren, was to go out and peg all the other Swedish nickel prospects they could find in the same type of rocks as they have at Granmuren. This is now looking like a very clever move indeed!
Well done Drake Resources!
Post 2 (Post: 8915898):
The significance of the Proterozoic age and deposit type I am referring to is the potential there for very large tonnages, especially where the bodies are large intrusive deposits of disseminated sulphide ore.
In fact Even if you consider the very much more ancient, usually volcanic massive sulphide Archaean nickel deposits of the WA Yilgarn block, the absolute standout, in terms of nickel content and value is the Mt Keith nickel deposit. This has volcanic sulphides too, but he main deposit is an intrusive disseminated orebody. It had initial reserves of 270 million tonnes at just 0.6% nickel and was a jewel in the crown for both WMC and now for BHP.
The Proterozoic-aged rocks, as at Nova in WA's Fraser Range province, Voiseys Bay in Canada and Granmuren in Sweden are where most of these large tonnage, lower grade disseminated nickel deposits occur.
But enough of the geology lesson. Just watch how this one evolves. It's a very interesting discovery.
(And pay no serious attention to any of my posts - I am not a financial adviser and they are not intended as any sort of advice. Purely as commentary)
Post 3 (Post: 8915974):
Thanks.
I suppose really my main point is that, whilst the high grades of the deep, relatively small, underground massive suplhide deposits that are generally prized in the Yilgarn in WA look far more seductive to the market at first take, you actrually cannot beat a large tonnage, low grade, open pittable disseminate nickel deposit for metal content, absolute asset value and profitability, as Mount Keith, with its 270mt at a grade of just 0.6% Nickel has demonstrated.
Looking at Granmuren in this context, the thickness of this recent 'true width' intersection, the 0.3-0.4% Nickel grade of the earlier, lower sulphide content intersections, the fact that the body comes virtually to surface and is open in all directions, and its proximity to all the necessary infrastructure make it a very interesting discovery.
If the market is naiively looking for several percent nickel grades from the initial assay results in January, but if it is looking for a substantial tonnage, economically viable nickel deposit, then it should be very happy with anything over 0.75% Ni plus copper and cobalt credits. You could dig that out and make a very nice profit profit.
(Once again, this is not intended as financial or any other sort of advice, merely informed commentary)
Given the noted association with Granmuren as an extension to the Ni belt in Finland, I thought I'd look around for Nickel mines in Finland and check out their grades.
Couldn't find specific assays but it appears that the average grade or the economic discoveries is in the order of 0.7% Ni.
The reference is from the Geological survey of Finland and the link is below:
http://en.gtk.fi/_system/print.html?from=/informationservices/commodities/Nickel/index.html ______ *****POST AMENDED TO INSERT THE "NICKEL IN FINLAND" INFORMATION FROM THE ABOVE LINK:
Nickel in Finland
Finland has a long history in nickel mining, beginning in 1941 at Makola and continuing at present at Hitura. Around 50 Mt of nickel ore, containing 0.3 Mt of Ni, has so far been mined.
As a by-product, nickel also comes from the talc mines in eastern Finland (so far 0.02 Mt Ni produced). A nickel refinery has been in production at Harjavalta since 1960 and nickel chemicals have been produced at Kokkola since 1993.
The Palaeoproterozoic orogenic deposits (Svecofennian, 1.9 Ga) have been the most rewarding exploration targets. Ten such deposits have been exploited for a total production of 43 Mt of ore at average grades of 0.7 % Ni and 0.3 % Cu. The total pre-mining resource of all the deposits known to date is about 60 Mt at 0.7 % Ni. At present, mining continues at Hitura, where production so far is 15 Mt at 0.60 % Ni and 0.22 % Cu. The ore resources at Hitura are still 5 Mt at 0.7 % Ni and 0.2 % Cu. The largest closed mine is Kotalahti with a production of 12.4 Mt at 0.66 % Ni and 0.26 % Cu.
The Kotalahti and Vammala Nickel Belts in central and southern Finland host several dozens of potential deposits, in some of which the average grade can be up to 2 % Ni. The deposits are hosted by mafic-ultramafic intrusions within migmatitic mica gneiss or in the contact zone of Archaean and Proterozoic rocks.
The Archaean komatiites (ca 2.8 Ga) in eastern and northern Finland and the Palaeoproterozoic komatiites (ca 2.05 Ga) in northern Finland provide a high potential for new discoveries. They have been explored for nickel since the 1960s but more actively only since 1990s. The largest deposit discovered is Ruossakero in northwestern Lapland with resources of 4.2 Mt at 0.52 % Ni. Numerous smaller deposits in komatiites and komatiitic basalts have been discovered in the Archaean greenstone belts of Kuhmo and Suomussalmi in eastern Finland. Low-grade disseminated occurrences have been found in the 2.05 Ga Pulju greenstone belt and growing interest is also shown for other belts of the same age (e.g. Sattasvaara). Also the komatiite-coeval, intrusion-hosted Keivitsa deposit contains a significant metal reserve (up to 432 Mt at 0.29 % Ni, 0.45 % Cu and 0.4 ppm PGM+Au). The possibility to find Pechenga-type deposits in northern Finland should also be kept in mind.
The 2.44 Ga layered intrusions typically contain Ni-Cu deposits where the PGMs are economically significant metals. These deposits represent newly defined class of 'contact style' Ni-Cu-PGE mineralization, which are found close to the basal contacts of the layered intrusions. The Ahmavaara deposit in the marginal series of the Suhanko Intrusion (Portimo Layered Igneous Complex) contains 1.8 Mt of ore at 0.90 % Ni, 0.80 % Cu, 5.04 ppm Pd, 0.69 ppm Pt and 0.19 ppm Au.
Other nickel deposit types in Finland include:
1) Low-grade black schist-hosted deposits (2.07–1.9 Ga); of these, the Talvivaara deposit is the largest, 339 Mt at 0.27 % Ni, 0.14 % Cu, 0.02 % Co, 0.56 % Zn. Bioshale Project
2) The deposits hosted by Outokumpu-type ophiolites (1.97–1.95 Ga) and Outokumpu-type quartz and calc-silicate rocks (1.9 Ga); their average nickel grade is usually <0.5 %.
3) Younger (ca 1.65 Ga) deposits include those hosted by dolerites, of which the Petolahti deposit was mined in early 1970s (0.09 Mt at 0.65 % Ni and 0.70 % Cu).***** _______
So if DRK is able to show long lengths of that order or above with (hopefully) massive or semi-massive intervals, then that will be a great result.
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Also went out and spent $20 on a report tabulating the Ni grade against the conductivity response from the EM survey at the Sudbury mine in Canada.
No surprises, the grade improves dramatically with an increased conductive response.
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Similarly from the same report they mention that given a dominate pyrrhotite sulphide presence that the Nickel grade shows a linear relationship to the amount of phyrrhotite present.
From the graph they produced, 30% sulphide equated to over 2% Ni.
From the initial release (not the amended one) DRK mentions that there are areas of between 10 - 30% pyrrhotite.
The site URL for the report is www.onepetro.org.
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As for the share price, well there is over $4m in options just sitting there at 58.5c. It'll have to be way north of that for those to be exercised. Who knows what will happen.
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All I know is that after too much food and much reading, I'm much more comfortable that Granmuren will turn out to be economic.
Therefore I'm tucking mine away for the next few months.
Commenting on the excellent results, Drake’s Managing Director Dr Bob Beeson said, “We are extremely excited by the visual mineralisation intersected in hole TS006. It confirms the Granmuren mineralisation is far thicker and more extensive than originally modelled from the airborne survey.”
“As yet we do not know the grade of this system, but Drake appears to have made a new discovery of a substantial nickel-copper deposit.”
Not long to wait until January's results!! The words "far thicker and more extensive" sounds very enthiastic and seen with the naked eye! That does it for me!
"Unlike some of the other would-be-Nova-hopefuls and near-ologists in Western Australia, the Granmuren prospect in Finland that is being explored by Drake Resources actually is a Proterozoic-aged, granodiorite-hosted nickel discovery (Nova is Proterozoic: about 1.5bn years old. The other WA Yilgarn nickel deposits are all Archean: 2-3 bn years old)."
"Granmuren is in the same northern hemisphere Proterozoic belt as the Canadian Voiseys Bay and Thompson’s fields and it has been metamorphosed and deformed like Sirius’ Nova mineralisation."
Im no geologist but I do know Sweden is alot more than a stones throw away from Nova but I think the gist of what this report is saying is that just because you are near a discovery doesnt guarantee success or even increase your chances of success.
Think about CDU and SFR how many nearologists actually made a follow up discovery?
After CDU's discovery the next was SFR on the other side of Australia and the next one after that was now SIRs Nova which is as close to SFR's DeGrussa as Tasmania is to our mainland.
The point is it seems Geology is by far the most important factor not location and geologically speaking it seems that Granmuren does tick the boxes
Santa has been very kind with DRK and the new year will be even bigger with confirmation of good results coming shortly as we get closer to an economicaly viable Nickel operation - I M O.
DRK Price at posting:
19.5¢ Sentiment: Buy Disclosure: Held
