higher grade nickel extensions, page-18

Brilliant! What's to not like about this result?

I am so much more comfortable with known assay results, from a bulk tonnage, low grade nickel deposit, in the middle of Sweden, surrounded by infrastructure, which comes almost to the surface beneath flat ground.

That has got to be a lot less risky than a potential bulk tonnage copper deposit, of as-yet unknown grade, lying under 380m of rock, at a lung-watering 4,500m, in a south American country best known for the quality of its coke, for which the Australian government travel advisory reads: 'Exercise a High Degree of Caution'. Not that there's anything wrong with taking a risk..

Apart from anything else though, nickel is $16,000 a ton, whereas copper is only $8,000 a ton (so just multiply the nickel grade by two to get the copper equivalent).


And yes, Drake have now cracked the 1% Ni barrier over several metres at Granmuren.

In fact they have drilled a 7.8m true width intersection of 1.14% Ni, 0.2% copper, which has an in-ground value of $198/ton, lies at just 110m vertical depth, and is open down dip and along strike in both directions.

This intersection is equivalent to 7.8m at 2.5% copper (double the nickel grade and add in the copper), or 7.8m at 4.0 g/t gold. And there is plenty of grade elsewhere throughout the hole.

Another point of significant interest is the fact that this layered ultramafic body is widening out down dip and also increasing in nickel grade. This is exactly what you would expect to see if you were moving towards the feeder zone, which is the optimal site for a high grade nickel accumulation in one of these layered ultramafic bodies.

It is also interesting to consider the geological similarites between the Inca exploration target at Chanape and the Drake exploration target at Granmuren. There is one very important similarity between these two:

Both Inca's 'porphyry copper-gold target' and Drake's 'layered ultramafic nickel-copper-cobalt target' are the same type of geological beast: both are intrusion-hosted orebodies. Both form from large intrusions of molten magma, from which potentially economic deposits of metals separate out as as the magma cools.

They are at opposite ends of a compositional range (Chanape is silica-rich; Granmuren is silica-poor), and so they each contain a different set of metals, and they mineralise in a very different manner: the porphyry intrusive boils metals off at the top, in an explosion of gas-charged fluids as it solidifies; the slower-cooling ultramafic intrusive allows early-solidifying metal sulphides to sink to the bottom, as the still molten magma cools, and form dense sulphide layers there (eg. down dip, around the feeder zone).

Both types of intrusions tend to come in several pulses, each with the potential to form additional mineralisation, hence the occurrence of several overprinting episodes of porphyry copper-gold mineralisation, and of several stacked layers of ultramafic nickel-copper-cobalt mineralisation (as appears to be the case at Granmuren).

The great thing that both of these deposit types have in common though is that they form from very large magmatic intrusions. You don't tend to get small layered ultramafic orebodies: the small intrusives cool too fast.

So as a result they usually form large, very valuable, low grade bulk tonnage metal deposits, which are exactly the sort of deposits that the majors really want to get their hands on: the Escondidas and the Mt Keiths.

Anyway, the next thing for Drake at Granmuren seems to be 1. downhole EM, to trace the immediate lateral extension of these recently drilled high grade zones, and 2. detailed surface EM, to map the entire extent of this sulphide mineralised body, and get some idea of its ultimate potential tonnage.

The surface EM will be far more revealing than the low-resolution, airborne VTEM data shown in Drake's announcements to date. Airborne VTEM is flown at high speed, on widely-spaced lines, at considerable distance above the ground, so it is a very rough regional first pass. It was what got them into this alluvial covered area in the first place. The closely spaced lines of stationary ground EM, in direct contact with the ground surface, will now map the detail of these conductors, and it will penetrate to greater depth and should directly pick the higher grade zones.


As an afterthought, somebody wisely said to me yesterday: 'always separate the trade and the fundamentals'. And I am doing this in this case. But it's the fundamentals I am buying, to hold. This one's not a trade.


Back to real work..


(And pay no direct attention to what I say. The above is for interests sake only. I am not a financial adviser and this is not intended as financial advice)