Western Mines Unveils Massive Nickel Sulphide Zones and Secures Key Royalty Deal
Western Mines Group has completed its Phase 3 drilling at the Mulga Tank Project, revealing extensive nickel sulphide mineralisation and securing a royalty extinguishment that enhances project value. The company also raised over $1.2 million to advance exploration.
- Phase 3 RC drilling confirms broad nickel sulphide mineralisation with multiple ~200m intersections
- Petrological analysis identifies pentlandite as dominant nickel sulphide mineral
- Royalty extinguishment deal completed on key Mulga Tank tenement, unlocking funding options
- Capital raise of $1.23 million supports ongoing metallurgical testing and resource modelling
- Strategic portfolio review leads to project rationalisation and focus on flagship assets
Mulga Tank Drilling Success
Western Mines Group Ltd (ASX: WMG) has reported a highly productive quarter at its flagship Mulga Tank Ni-Co-Cu-PGE Project in Western Australia. The company completed a five-hole regional reverse circulation (RC) drilling program as part of its Phase 3 campaign, which has now concluded with strong assay results confirming a major nickel sulphide mineral system.
The drilling targeted interpreted komatiite channel flows, a geological setting known to host high-grade nickel deposits. Assays revealed extensive intervals of nickel sulphide mineralisation, with multiple holes delivering broad intersections around 200 metres in length. Notably, hole MTRC055 returned 216 metres at 0.30% nickel, while MTRC056 delivered 201 metres at 0.31% nickel, both accompanied by cobalt, copper, and platinum group elements (PGE) credits.
Petrological investigations of select holes confirmed pentlandite as the predominant nickel sulphide mineral, a positive indicator for potential economic extraction. The widespread presence of disseminated sulphides across 55 of 58 holes drilled to date underscores the scale and continuity of the mineralised system.
Strategic Royalty Extinguishment and Capital Raise
In a significant corporate development, Western Mines completed a binding agreement to extinguish a 1% net smelter return (NSR) royalty on tenement E39/2132, the core area of the Mulga Tank Project. The transaction involved issuing shares, options, and performance rights to the original vendor, effectively removing a financial encumbrance and enhancing the project's value.
This move not only improves the economics of Mulga Tank but also opens avenues for future project funding through potential royalty resales to specialised investors. The company’s ability to negotiate this deal reflects confidence in the project's long-term potential.
Supporting its exploration momentum, Western Mines successfully raised $1.23 million during the quarter. The funds are earmarked for advancing metallurgical test work, geological modelling, and further drilling preparations. The metallurgical program has already yielded encouraging results, with nickel concentrate produced via standard flotation methods from diamond core samples.
Portfolio Rationalisation and Future Focus
Alongside its flagship project progress, Western Mines undertook a strategic review of its broader portfolio. This led to the surrender of the Rock of Ages and Broken Hill Bore tenements, reflecting a sharpened focus on high-potential assets. Other projects, including Jasper Hill and Youanmi, continue to see targeted exploration activities, with soil sampling and geophysical surveys underway to identify drill targets.
The company is now progressing towards an initial inferred resource estimate for the central core of Mulga Tank, supported by a growing dataset of high-grade intersections and comprehensive geological modelling. The prospectivity of komatiite channels along a 15-kilometre trend within the Minigwal Greenstone Belt suggests significant upside potential beyond the current drilling footprint.
With a market capitalisation of approximately $12.65 million and cash reserves of $1.08 million at the end of December 2024, Western Mines is positioned to maintain its exploration drive. The company’s disciplined approach to capital management and project prioritisation will be critical as it advances towards resource definition and potential development pathways.
Bottom Line?
Western Mines’ robust drilling results and strategic royalty buyback set the stage for resource definition and funding options at Mulga Tank.
Questions in the middle?
- How will upcoming metallurgical test results influence the project’s processing strategy and economics?
- What are the timelines and targets for the planned Phase 4 drilling campaign at Mulga Tank?
- Could the royalty extinguishment deal attract new investors or partners through future royalty sales?
