On 21 January, Australian Mines Limited (ASX: AUZ); USA OTCQB: AMSLF; Frankfurt Stock Exchange: MJH) announced further outstanding near-surface results from the company’s cobalt and nickel exploration and drilling program at its wholly owned Sconi Project in North Queensland. The Resource expansion drilling program has continued to define high-grade cobalt and nickel intersections across the project area with impressive grades as high as an astounding 3.4% cobalt.
The cobalt grades over an individual metre in hole LKM1217 is an impressive discovery from Sconi Project, as is the recurrence of intersections across the project area that grade in excess of 1.0% cobalt. This is in comparison to the industry-accepted definition of “high grade” of 0.1% cobalt when referring to non-Africa projects (or one-tenth the grade that is being intersected at Sconi). With such impressive exploration results, the Sconi Resource Expansion drilling program is continuing to retain its status as a world-class deposit.
High-grade intersections included:
12 metres at 1.07% cobalt from 1 metre depth, 9 metres at 1.02% cobalt from 1 metre depth, 10 metres at 0.75% cobalt from 5 metres depth, 12 metres at 1.02% nickel from 1 metre depth, 13 metres at 1.11% nickel from surface and 16 metres at 1.00% nickel from 2 metres depth.
The company’s exploration technical team has discovered the consistency of these cobalt and nickel intersections between drill holes and thereby considers a huge potential in the Sconi Project’s Mining Resource upgrade. The Company has hired a leading independent resource consultant group to immediately commence a re-estimation of the Sconi Mineral Resource, with the updated Resource statement expected to be announced by April 2019.
On 20 November 2018, the company presented the Bankable Feasibility Study which highlighted the commercial viability of the Sconi Project. Subsequently, any increase of the cobalt grade in a revised Mineral Resource Re-estimation will add to the economic benefits.
As stated by the Australian Mines Managing Director, Benjamin Bell, The Sconi Project has a bright potential to grow the cobalt and nickel Resources, beyond the already strong commercial viability stated in the earlier Bankable Feasibility Study. The company’s technical team has successfully estimated the extensional potential at both the Greenvale and the nearby Lucknow deposits ahead of the campaign and it is clear from these results that the drilling has the potential to reinforce that modelling in a significant way. The Sconi Project reflects even greater potential as suggested by almost 3.5% record cobalt assay results. The company further intends to incorporate these results in a re-estimation of the Mineral Resource for the Sconi Project. The company gives due credit to the technical team for successful planning and execution of the drilling program.
Stock performance: Post the announcement, the AUZ shares are trading high at A$0.046, up by 4.55% with a market capitalization of A$124.18 million and 2.82 billion outstanding shares (as at 2:50 PM AEST, 21 January 2019). Although the stock offers a negative return of 46.34% over the last six months, the share price has risen by 12.82% since the last three months.