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Sep 2005 - Nickel at Kambalda

Finding More Nickel at Kambalda

The purchase of WMC’s old nickel mines at Kambalda by a number of junior mining companies has resulted in a number of listed companies with lives greater than 7 years (based on minable resources) such as at Independence’s (IGOs) Long mine, Consolidated Minerals’ (CSMs) Beta Hunt, and Mincor’s (MCRs) Widgiemooltha operations, all of which we (ERA) have visited this year (to August 2005). It should be noted that this column has been based on observations which may not conform to some geological theories.

When the nickel mines were acquired they were not expected to last so long, after all they appeared to the market to be simply mined out lava channels with maybe some remaining pillars or small orebodies that WMC had left behind and perhaps some extensions could be found. Looking at plans and initial presentations by the junior companies, the lava channels were depicted as very simple ribbons of mineralisation within a channel – which very broadly, is true.

It is generally accepted that the nickel mineralisation in WA from Mt Keith, south through Jubilee, Kambalda and Widgiemooltha was all part of the same semi-continuous event in geological time, with lava flows either passing over or around what became the Kambalda and Widgiemooltha domes and then being disrupted by post-depositional activity to result in the current ore deposits there.

The lava channels formed what are called embayments in the surface through which they passed (mostly in basalt), and ingested sediments to effectively form nickel sulphide mineralisation. Then the channels were disrupted by folding, faulting (broadly E/W and N/S) and in some cases, vertical rotation. The massive nickel sulphide has been described as “toothpaste” for the manner in which it appears to have flowed and been squeezed, and we have seen it having flowed around angular blocks of basalt both at IGO’s Gibb South and MCR’s Wannaway.

For some reason, the eastern-side of the domes appears to contain larger orebodies than the western side both at Kambalda and Widgiemooltha. At Kambalda the nickel orebodies on the eastern side of the dome / ridge are have all have produced more than 100,000tNi based on Otter-Juan (7.9mt @ 3.6%Ni for 281,000tNi), Durkin (3.2mt @ 3.2%Ni for 103,000tNi, Long (4.5mt @ 3.7%Ni for 182,000t Ni) and Lunnon/Silver Lake (4.5mt @ 2.7%Ni for 123,000tNi). Hence the anticipation by CSM over what could happen at Beta-Hunt’s East Alpha.

At Widgiemooltha, MCR’s Miitel was not mined by WMC and yet with its extensions it appears to extend over 3km on strike and still remains open north and south (on strike). The Widgiemooltha dome was always regarded as the poorer cousin compared to Kambalda (despite average Ni grades being similar and high tenor nickel also being present) although it may have been partly prejudiced due to its distance from the Kambalda concentrator of ~50km or so. Consequently, it could contain material upside because it has largely been overlooked.

An idealised cross-section through a channel consists of nickel mineralisation in the form of a higher grade massive sulphide on the contact with the basalt floor, overlain by what is called matrix ore and then low grade disseminated ore dispersing into the ultramafic hangingwall. Such idealised sections do occur with widths or thicknesses of typically about 1m or so.

However, as shown in Figure 1a of a 3d model of the basalt ultramafic contact at CSM’s Beta Hunt, the channels are uneven due to the post depositional disruption. CSM’s Beta has also been encountering “bubbles” or pods of matrix ore containing flecks of massive sulphide in their 40 surface (or channel). Such bubbles appears to lie in a position where the channel appears to be rising back up towards surface (and in cross-section the impression in the basalt floor looks like a “bubble”).

The first one was north-south on strike at the 1840 position and was mined in DQ 2004 generating about 1000tNi (23,600t @ 4.3%) from dimensions 50m long x 20m high x 6m wide. Almost 24,000t of ore was stoped, and there was also fairly extensive development establishing what had been found, such that the original contained tonnage in the “bubble” may have been >40,000t of ore. The second “ballroom or bubble” at the 1942 position could contain more than 1000tNi (at 3% to 4%Ni) based on its dimensions to date, (lying east-west more than 30m long x 20m wide x 20m high) which was still being delineated when we visited it in mid-July 2005.

I had never seen such “bubble” mineralisation before and it appears neither have a number of people. More common is hangingwall (being a massive nickel lode situated in ultramafic above the main lode channel) and flanking mineralisation (being mineralisation on the overhanging lips of the embayment). The original Silver Lake mine had all these features : hangingwall lodes (it had 4 of them throughout the mine, extending over most of the whole main channel’s length and in some cases two overlying each other), plus flanks and the usual contact ore.

The representation of the nickel mineralisation at the old mines and targeting of extensions has been significantly simplified by the advances in computers and computer software that was not available when those mines closed, as illustrated by the 3d modelling of the basalt contact in Figure 1.

In addition the relatively old timers did not have downhole EM as an exploration tool. The accurate delineation of the drop faulted nickel sulphide lode extension south of MCR’s Miitel is astonishing for its accuracy and remains open, despite have been delineated over a 300m long length containing possibly 7,000tNi (at 3.5%Ni).

Downhole EM has become a standard practice with its accuracy also clearly shown in the discovery of IGO’s new McLeay orebody. On the 10 and 16 June 2005, IGO reported the evolvement of a new surface south of Victor South into a new orebody called the McLeay orebody and by early August 2005, 3 shoots had been delineated, aside from the primary lava channel (Shoot 1). Shoot 2 in the form of remobilised massive nickel sulphides was intersected for 15m along a drill drive that was being developed 130m beyond Victor South to drill-out Shoot 1 of the McLeay mineralisation lying below Victor South.

It can be seen why the junior mining companies are able to have bought the old WMC nickel mines and resulted with at 10-year life operations. Just how long beyond their 10 year lives can be achieved remains to be seen, however, the application of Anglo American’s SQUID by IGO or even BHPB’s Geoferret could unlock further potential, aside from evolving 3d software and computer grunt.

Disclosure and Disclaimer : This article has been written by Keith Goode, the Managing Director of Eagle Research Advisory Pty Ltd, (an independent research company) who is an Authorised Representative with Taylor Collison Ltd, and with his associates, holds interests in some of the stocks mentioned in this article. The opinions expressed in this article should not be taken as investment advice, but are based on observations by the author. The author does not warrant the accuracy or completeness of any information and is not liable for any loss or damage suffered through any reliance on its contents.

Figure 1. 3 Dimensional Section through CSM’s Beta Hunt and East AlphaGDNsep05

  • Written by: Keith Goode
  • Thursday, 01 September 2005