(Alliance News) - URU Metals Ltd on Thursday said it plans to recommence geological exploration work shortly on its flagship Zebediela nickel sulphide project in South Africa.
Shares in URU were down 15% at 224.00 pence in London at midday.
Zebediela is located on the northern limb of South Africa's Bushveld Complex, hosting an estimated 11.9 million tons of nickel. The exploration work will target battery and higher-grade nickel-sulphide mineralisation located east of the Zebediela nickel-sulphide resource.
Zebediela itself contains an NI43-101-compliant nickel sulphide resource of over 1,600 million tons at 0.245% nickel and could produce more than 500,000 tons of nickel using an open pit method, which URU said would put it "amongst the top ten largest nickel sulphide resources globally".
URU has identified a target geological zone east of and adjacent to the existing Zebediela resource which has produced a result of 0.56% nickel over a width exceeding 4 metres from exploration drilling, as well as notable cobalt and platinum group elements, giving it a 3.01% nickel equivalent grade.
Drill hole Z017 has intersected 1.7% nickel and 0.7 grams of platinum plus palladium, rhodium, and gold per tonne of ore over a width of 2.25 metres, 20 metres below the NI43-101 complaint resource.
Additional exploration drilling is to test this target, which is an estimate 5,000 metes in strike length and has a varying thickness of between 1.8 metres and 10 metres from depth of 40 metres below surface down to depths exceeding 400 metres bellow surface.
"The project team is confident that this drilling will result in increasing the overall grade of the project," said URU.
Drilling is set to start in the fourth quarter of 2020 provided the company secures enough funding for the programme.
As a result of South Africa's Covid-19 lockdown, URU was granted an extension for the submission date of its environmental impact assessment and environmental management programme, which now are set to be submitted in January 2021. The EIA is underway.
Next steps for URU will be a 12-hole drill programme, set to start in October and complete in March 2021 with enough funding. Results of this will help the firm estimate the necessary infill drilling to update its project resource statement.
Chief Executive John Zorbas said: "With the current trend of increasing demand for class 1 nickel in battery technologies, we see a tremendous long-term growth potential for the nickel market. URU's Zebediela nickel sulphide deposit, located in a burgeoning nickel-PGE mining belt, is potentially an important future source of class 1 nickel due to a lack of major nickel sulphide mines coming online in recent years. URU is looking to improve the current project economics by targeting a higher-grade nickel resource, and ultimately develop the project in an environmentally friendly manner, eventually contributing towards green energy and helping to meet the increasing demand for battery-grade nickel products for use in the electric vehicle markets."
By Anna Farley; annafarley@alliancenews.com
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Uru Metals (URU)