miningnews.net article

Kimberley calling for nickel junior

Michael Quinn

Monday, March 29, 2004
The rugged Kimberley region of Western Australia is emerging as an exciting destination for miners and explorers alike.

The Sally Malay nickel mine is under construction, Kimberley Diamond Co is enjoying production and exploration success on the diamond front, and Argyle, the world's biggest diamond mine, keeps on keeping on for Rio Tinto. Meantime there's a-swag of other projects such as the Panton PGE project and the Pillara zinc-lead projects that are generally waiting on better prices or a weaker Australian dollar.

Geologically, it's recognised as one of only three areas in Australia prospective for intrusive related massive nickel-copper-cobalt sulphide deposits - the Arunta Block and Musgrave Ranges being the other two. If you really want to get the heart pumping in terms of the potential of this sort of geology, think Voisey's Bay in Canada and Norilsk in Siberia.

The point is, it's a well mineralised part of the world that's been under-explored to date, but which has been attracting increased attention from juniors and majors alike as recognition of its potential grows.

Northern Star got its current interests in the area a few years back via well-known geologists and consultants Ian Chalmers and Terry Ransted - both non-executive directors of the new company.

Both have been involved in various guises in the Kimberley for many years. Chalmers was involved in the discovery of lead-zinc-silver deposits in the Kimberley at Lennard Shelf whilst with the metals division of Shell Australia, and was instrumental in the formation and listing of Panorama Resources, a company that also had interests in the region in the 1990s. Ransted was also involved with Panorama, and these days, as with Chalmers, spends most of his time with Alkane Exploration, discoverer of the promising Wyoming gold deposit in New South Wales.

Indeed it was via Alkane that Jubilee Mines came into the picture, with the main players in the two companies knowing each other via joint ventures in the Leinster area where Jubilee's outstanding Cosmos operation is churning out the nickel.

Jubilee subscribed for 9.375 million shares at 8c during the seeding stage, and a further 3.375 million shares at 20c in the company's $5 million IPO. That makes it Northern Star's biggest shareholder with a 25.68% stake.

Its very much a win-win situation with Northern Star providing Jubilee with exposure and leverage to an emerging mineral field, and Northern Star having a big brother to back it as and when required. It's also testament to the prospectivity of the east Kimberley, with Jubilee already having plenty of targets in its own part of the world.

Heading Northern Star is the youthful looking, but experienced, former WMC Resources exploration manager Charles Wilkinson. Not surprisingly, Wilkinson's also got some good form. In an 18-year exploration career, he led the exploration that discovered the intrusive-related Nebo-Babel nickel mineralisation in the West Musgrave area, as well as the discovery of WMCR's two million ounce Argo gold deposit near Kambalda.

Wilkinson's brief at Northern Star takes in three projects centred on Halls Creek in the east Kimberley - called East Kimberley Nickel, Halls Creek and Wilson River. East Kimberley is the flagship, at least in the medium to longer term. It covers around 1460 square kilometres and features many geophysical anomalies identified by previous explorers but never drilled. The more promising prospects, including Red Billabong, Springvale and Castlereagh, will be tested with further geophysics in the next few months as the 2004 field season gets into full swing.

As part of its independent geologists report for Northern Star's prospectus, RSG Global's Dr Christopher Stephens described the project as having "significant potential for the discovery of nickel-copper-PGE mineralisation", and noted the paucity of drilling.

Stephens also said the company would benefit from the "significant advances in the understanding of the formation of magmatic nickel-copper-chrome-PGE deposits, and in the geochemical and geophysical exploration methods available to explorers for mafic hosted sulphide exploration."

In terms of drilling, some $636,000 has been budgeted over the first two years, with various geophysical surveys expected to cost around $415,000.

The Halls Creek project covers around 570sq.km and is considered prospective for gold, tantalum and base metals. Golden Crown is the prime prospect at Halls Creek. It's located along strike from the abandoned Palm Springs gold mine that was worked in the 1990s by Precious Metals Australia before that company decided to focus on vanadium at Windimurra.

Northern Star is targeting a similar resource style at Golden Crown, where many high grade intercepts have already been previously recorded - for example 4m grading 64.2 grams per tonne, 7m at 11.4gpt and 5m at 23gpt.

Establishing the continuity of the high-grade mineralisation is a priority for Northern Star which expects to begin drilling in March/April. The company believes that a resource could be established in the short-term and thereafter development, with Wilkinson saying Northern Star's board is well aware of the market's preference for juniors who are able to self-fund.

Project three is Wilson River click here to read on

* This report, first published in the February/March 2004 edition of RESOURCESTOCKS magazine, was commissioned by Northern Star Resources