Lunnon Metals Ltd (ASX:LM8, OTC:LNMLF) has welcomed the clarity gained from BHP’s recent announcement stating the major mining company would temporarily suspend its Nickel West operations from October this year.
LM8 holds the Baker and Foster nickel deposits in the Kambalda region of Western Australia, as well as the Silver Lake Nickel Project and Fisher Nickel Mine nearby.
The company has an interest in processing its nickel through the Kambalda Nickel Concentrator, part of BHP’s Nickel West subsidiary operations.
The concentrator was slated to be put into care and maintenance last month, but the mining giant has been silent on the future of the processing operation.
Multiple processing options available
With the clarity from BHP’s announcement, Lunnon is currently considering the following options to process future nickel ore from its projects:
- (a) build a new, right-sized concentrator; or
- (b) re-purpose or utilise an existing processing facility, to meet the needs of the various local stakeholders in Kambalda or further afield. Initial discussions have been ongoing in this regard.
LM8 is considering a site on its own tenements in Kambalda near the historical St Ives Gold plant where infrastructure, utilities and, importantly, tailing storage facilities are available.
Zoomed-in plan view of the previous St Ives gold plant site during its operational life, associated tailing storage facility and supporting infrastructure.
The Baker Project’s mineral resource estimate currently sits at 1 million tonnes at 3.3% nickel for 33,700 tonnes of nickel metal, while Foster hosts 1.99 million tonnes at 2.9% nickel for 58,400 tonnes of nickel metal.
The global mineral resource estimate for the broader Kambalda Nickel Project, which includes all of Lunnon’s assets local to the Kambalda region, stands at 4.2 million tonnes at 2.7% nickel for 113,600 tonnes of nickel metal.
The company has also completed extensive metallurgical test work demonstrating that these deposits produce a high-quality, high-grade nickel concentrate product rich in copper and cobalt and low in deleterious elements.