Western Mines expands Mulga Tank resource beyond 7Mt contained nickel

Mulga Tank resource reaches 7.2Mt of contained nickel

Western Mines Group Ltd (ASX:WMG) has more than doubled the contained nickel headline at its Mulga Tank project, reporting a 2,647 million tonne Mineral Resource Estimate at 0.27% nickel. The resource contains 7.2 million tonnes of nickel, alongside 347,000 tonnes of cobalt, 205,000 tonnes of copper and 1.6 million ounces of platinum and palladium.

The estimate covers shallow disseminated nickel sulphide mineralisation in the main dunite body of the Mulga Tank Ultramafic Complex in Western Australia’s Eastern Goldfields. It is reported at a 0.20% nickel cut-off and comprises 1,121Mt in the Indicated category at 0.28% nickel and 1,526Mt Inferred at 0.27% nickel.

32 drilling holes upgrade the resource

The update incorporates 32 Phase 4 and Phase 5 holes totalling 9,634 metres. The company said the drilling increased Indicated resource tonnes by 98%, while higher-grade tonnes above a 0.32% nickel cut-off rose by 80% in the Indicated category and 18% across the total resource.

The result follows Phase 5 drilling results, which reported broad nickel sulphide intersections alongside cobalt, copper and platinum-group elements. Western Mines said the latest modelling focuses on an approximately 3.7 kilometre by 2.0 kilometre area and excludes nickel in the oxidised and transitional zones.

Large scale, low grade and still unconstrained

There is an important qualification beneath the headline tonnage. The estimate is unconstrained, meaning it has not been limited by an open-pit shell, and the company cautions that a pit-constrained resource could produce materially different figures. The mineralisation is considered shallow and potentially amenable to open-pit mining, but that remains a development concept rather than an established project outcome.

Western Mines is working on a Scoping Study based on a potential operation processing 20Mt to 40Mt of ore each year. Preliminary flotation testing has recovered nickel sulphides from all tests conducted so far, but the company is currently assuming a 40% to 45% recovery range until more extensive metallurgical work is completed. Those assumptions, along with capital and operating costs, will determine how much of the contained metal can translate into an investable project.

Independent review and the next economic test

Independent consultant ERM reviewed the data inputs, interpretation and estimation methodology and concluded they were reasonable and acceptable for reporting a JORC 2012 Mineral Resource Estimate. That supports the classification of the resource; it does not amount to a feasibility study or establish commercial viability.

Western Mines Managing Director Dr Caedmon Marriott described Mulga Tank as potentially Australia’s largest nickel sulphide deposit and among the world’s top 10, but those ranking claims are the company’s own assessment. The more useful comparison will arrive with the Scoping Study, which is expected to test pit-constrained tonnes, mining rates, recoveries, capital requirements and operating costs. Until then, the project has scale in abundance, while its economic case remains a work in progress.