Lunnon Metals (LM8.AX) is working on its Kambalda nickel project which already contains approximately 64,300 tonnes of nickel across all resource categories and the company recently completed metallurgical test work on the Baker Shoot, a specific high grade zone with approximately 8,100 tonnes of nickel in the indicated resources and 7,700 tonnes of nickel in the inferred resource category at an average grade of 2.8% nickel.
That’s an excellent nickel grade, but a project always depends on the metallurgy as not the amount of nickel in the ground is what matters, but the amount of nickel you can actually recover from the rock. Lunnon’s test work zoomed in on a sample with an average grade of 2.81% nickel, 0.27% copper, 0.06% cobalt and 16.4% Fe. According to the results of the test, the average recovery rate for the nickel was a pretty good 86% resulting in a concentrate grade of 16.9%.
The other metals also yielded relatively high recoveries (95.5% for the copper and 85.3% for the cobalt) but we’re unsure how the copper and cobalt grade in a nickel concentrate will impact the payability percentage of the three main metals. The test work appears to be robust as the company used BHP’s (BHP) Nickel West concentrator and perhaps there’s some additional potential here as about 40% of the sample came from core of three drill holes located outside of the resource estimate. That means a substantial portion of the sample submitted for metallurgical testing was sourced from the weakly mineralized hanging wall to ensure the minimum weight requirement was achieved.
Since those first three holes were drilled, an additional 58 holes have been completed including 15 diamond drill holes so we can likely expect the company to continue its metallurgical test program with more sample material.
Disclosure: The author holds a long position in all stocks mentioned in this article. Please read our disclaimer.