Lunnon Metals Ltd (ASX:LM8, OTC:LNMLF) has lifted the JORC 2012-compliant mineral resource estimate (MRE) by 10% at Foster South deposit within the Foster-Baker Project (FBA) of its broader Kambalda Nickel Project (KNP) in Western Australia’s Kambalda region.
An updated MRE has recorded 17,600 tonnes of nickel metal at 4.7% nickel, which represents a 10% increase in total tonnage as well as grade and confirms Foster South as a key high-grade component in any future Foster mine re-start.
Foster South is a high-grade and unmined nickel deposit approximately 300m south of the end of the historical decline at Foster.
The MRE upgrade comprises 264,000 tonnes at 4.7% nickel for 12,400 tonnes in indicated resources and 111,000 tonnes at 4.7% nickel for 5,200 tonnes in inferred resources.
KNP hosts 110,700 tonnes
Lunnon’s global MRE across the KNP now stands at 4.1 million tonnes at 2.7% nickel for 110,700 contained nickel tonnes, with the FBA component on the south side of Lake Lefroy now totalling 3.0 million tonnes at 3.0% for 92,200 contained tonnes.
This latest resource increase means Lunnon Metals has now discovered 2.86 million tonnes at 2.5% nickel containing 71,700 tonnes of nickel metal since its June 2021 listing on the ASX.
High-priority deposit
Managing director Edmund Ainscough said: "The Foster South deposit is our second highest ranking nickel deposit after Baker. It is high-grade at 4.7% nickel, giving us great confidence to expect a high rate of conversion from the indicated category of mineral resource to our future mine plan.
"Just a few hundred metres off the south end of the Foster decline, these 17,600 tonnes of nickel metal were left unmined by WMC at the end of Foster’s operational life and represent a high-priority target, not just for our current PFS work, but also once a future re-start at Foster is underway.”
The MRE update follows a metallurgical diamond drill program completed in late 2023 with assay results reported on October 9 and 17 and the metallurgical test work results on December 8, 2023.
The KNP (red outline) with Kambalda regional geology and location of key mines/infrastructure.
Mining Proposal approved
As part of the ongoing de-risking of the path to production at Baker, Lunnon submitted a Mining Proposal in the December 2023 quarter to the Western Australian Department of Energy, Mines, Industry Regulation and Safety.
This has now been approved, enabling the company to mine the Baker deposit from underground with decline access from the West Idough Open Pit and transport the ore offsite to a third-party concentrator at a time of its choosing.
"It’s also excellent to report the approval of the Baker Mining Proposal. This means we can start Baker at a time of our choosing when the nickel market environment is more conducive,” Ainscough said.
"Continuing to de-risk our nickel portfolio now, by completing the Baker-Foster PFS and permitting Foster, are low-cost initiatives that save time and add huge value.
"In parallel, the team can seek to complement our high-quality nickel portfolio, by adding more value to our gold portfolio, after excellent early success, particularly at Plentiful and Lady Herial.”
About the KNP
The KNP features about 47 square kilometres of tenements in the Kambalda Nickel District and is about 50-70 kilometres south-southeast of Kalgoorlie in the Eastern Goldfields.
It comprises two project areas, Foster and Baker with 19 contiguous mining leases and Silver Lake and Fisher with 20 contiguous mining leases.
This district has produced in excess of 1.6 million tonnes of nickel metal since its discovery in 1966 by WMC Resources Ltd.
In addition, more than 15 million ounces of gold in total has been mined, making the Kambalda/St Ives district a globally significant gold camp in its own right.
Regional location of the Kambalda Nickel Project and other nearby nickel deposits.
The KNP is broadly surrounded by tenements held by St Ives Gold Mining Co. Pty Ltd (SIGM), a wholly-owned subsidiary of Gold Fields Limited and the company’s major shareholder.
At Foster and Baker SIGM retains rights to explore for and mine gold in the 'Excluded Areas', as defined in agreements between Lunnon Metals and SIGM, and on the remaining area of the tenements, has select rights to gold in limited circumstances.
At Silver Lake and Fisher, Lunnon has the exclusive rights to nickel on 19 mining leases and related access rights on one additional tenure.