BATT

It has been a while since we published an update on BlueBird Battery Metals (BATT.V), as the company was busy with a drill program at Canegrass during the summer. The company also conducted some changes on the corporate level as unfortunately CEO Peter Ball and Chairman Alf Stewart stepped down from the company and were replaced by Nav Dhaliwal as interim-CEO and Gary Nassif as President. And earlier this month, director Terry Topping was replaced by Leigh Hughes.

This didn’t have an impact on the ground work in Australia, and Bluebird completed 10 drill holes (for a total of 1856 meters) at Canegrass to follow up on the previously known electromagnetic anomalies and outcropping vanadium zones.

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A brief recap of the Canegrass project

Canegrass is located in Western Australia’s Mt. Magnet region and was the subject of (small) exploration campaigns by previous owners.

Canegrass Ni-Co-Cu Project in Western Australia

In a five-year period between 2010 and 2015, the project was subject to the standard array of early stage exploration methods, and after completing a sampling and mapping program in 2010-2012 and an aerial VTEM survey in 2013, the logical next step was to further define drill targets by completing a ground Electro-Magnetic and normal magnetic surveys over some of the ‘hot spots’ from the VTEM survey.

Canegrass Property – High Resolution Airborne Magnetics with Historical V2O5 Surface Rock Chips
Canegrass Property – High Resolution Airborne Magnetics with Historical V2O5 Surface Rock Chips

Once the previous owner reduced the amount of drill targets, two of the 14 targets were effectively drill-tested with 2 holes (diamond) on one target and 7 holes (6 diamond, 1 RC hole) on the second target. Nine of the ten holes have intersected anomalous cobalt, copper and nickel mineralization. A good start, as the smoke indicates there might something to be found there, but let’s be clear about the status of Canegrass: it’s an early stage project.

That’s also why the acquisition terms were so favorable. Bluebird paid just C$25,000 in cash (and issued 3 million shares) and will issue an additional 1.875M shares on both the 1st and 2nd anniversaries of the deal. So the cash component is very small and whilst some could complain about the ‘dilution’, the 6.75M shares had a value of less than C$1.35M based on the share price of Bluebird Battery Metals when it was still called Golden Peak Minerals, trading at just C$0.20 per share.

Once the final acquisition paperwork was completed, Bluebird Battery immediately started a drill program to follow up on the airborne and ground magnetic anomalies and to follow up on the discovery of vanadium-rich zones at surface.

A total of ten holes has now been completed with the amount of holes evenly spread between Reverse Circulation drilling (five holes to follow up on an airborne anomaly and a vanadium sampling anomaly) and diamond drilling to target the electro-magnetic anomalies.

Canegrass Ni-Co-Cu Project

The assay results of the first hole have now been released

Bluebird has released the assay results from the very first drill hole (one of the RC holes) at the Canegrass project earlier this week. Companies usually wait for the lab to report on a few holes so they can release a ‘batch update’, but in Bluebird’s case it makes sense to immediately publish the results of the first drill hole as we agree with the company it’s a material event.

This first hole encountered a zone of 12 meters (the true width remains unknown at this time) containing 1.17% nickel, 0.93% copper, 0.76% V2O5, some platinum (0.4 g/t) and palladium (0.51 g/t) credits as well as 0.05% cobalt. Within this 12-meter interval, Bluebird encountered a slightly higher grade zone over six meters.

12.0 m (1) averaging 1.17% Ni, 0.93% Cu, 0.05% Co, 0.76% V2O5, 0.40 g/t Pt and 0.51 g/t Pd
Including
6.0 m (1) averaging 1.40% Ni, 0.96% Cu, 0.06% Co, 0.94% V2O5, 0.48 g/t Pt and 0.60 g/t Pd.

RC Drillhole Section
RC Drillhole Section

Not only is it encouraging to hit mineralization on the very first drill hole, the average grades are very decent as well. 1.17% nickel has a gross rock value of approximately $148/t (excluding recoveries and payability percentages by the smelters) while 0.93% copper also is nothing to sneeze at. Sure, the interval of 12 meters is pretty short and we will need to see some longer mineralized intervals to make the project economic, but we also shouldn’t ignore the location of the mineralization at just 66 meters down-hole. This will make it easy to complete step-out holes to figure out the extent of the mineralization but will also make it easier to develop an open pit mine plan.

Canegrass Property – Regional Geology with VTEM ™ Anomalies
Canegrass Property – Regional Geology with VTEM ™ Anomalies

Of course, talking about a mine plan after just one drill hole is still very premature, but it’s encouraging to see the company hitting the expected mineralization in the very first hole. This one hole is extending the strike length of the mineralization by approximately 2,000 meters for a current total strike length of the trend of about 5,000 meters.

And just to make your life easier; we have calculated the gross metal value per tonne based on the 12-meter intercept and the current commodity prices (we did use a lower price for vanadium). The gross value by itself is meaningless as you will still have to apply the appropriate recovery rates and payability rates by the smelters, but it gives you an idea of why Bluebird couldn’t ‘sit’ on these assay results.

table1-bluebird-battery-metals-batt

Conclusion

This first hole contains high-grade nickel, copper and vanadium intervals and while that’s a very encouraging start of the drill program, it still is a long way to Tipperary. The assay results of the next 9 drill holes that still have to be released will be very interesting as those holes will provide us with much more information about the geological structures at Canegrass.

The assay results of those holes should be in later this month, and these will be the basis to design future exploration programs at Canegrass.

Canegrass Ni-Co-Cu Project: Exploration Commences April 2018Canegrass Ni-Co-Cu Project

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