First Point stakes new nickel prospects

Nickel-iron alloy explorer First Point Minerals (FPX-V) has discovered promising showings of awaruite mineralization in Australia and the Yukon. The company has staked large land packages surrounding the showings and will look to drill both properties next year after conducting more detailed follow-up sampling and mapping.

The discoveries suggest similar mineralization at First Point’s flagship Decar nickel-iron-alloy project in northern B.C. may not be a unique occurrence, and point toward a new type of nickel deposit for development, should Decar prove commercially exploitable.

Cliffs Natural Resources (CLF-N) has an option to acquire up to 75% of Decar and completed 12,000 metres of drilling on the property this year.

First Point’s new 163-sq.-km Light property is located in New South Wales, Australia, along the northern end of the Coolac ultramafic complex. Preliminary surface rock sampling there has returned anomalous nickel-in-alloy values of 200 parts per million (ppm) to 400 ppm, with visible disseminated grains of awaruite ranging from 20 microns to 100 microns in size.

The newly staked Mich property in the Yukon is located 52 km east of Whitehorse and totals 11.5 sq. km in size. Surface sampling has defined a main zone of disseminated nickel-iron alloy mineralization that extends over 2,200 metres in length and ranges from 150 metres to 640 metres in width. Fourteen wide-spaced samples of sparse bedrock outcrops returned values ranging from 590 ppm to 1,160 ppm nickel in alloy at 0.06% to 0.12% nickel. In comparison, the average grade at Decar ranges from 0.1% to 0.15% nickel.

Ron Britten, First Point’s vice-president of exploration, tells The Northern Miner that “Mich has a nice size to it, and it’s in the right sort of ballpark in terms of grain size and grade of nickel-iron alloy values. I’d say it’s comparable to Baptiste [the main zone at Decar] in terms of grain size and grade. Obviously we have to do more surface work next year early on, but then we’ll drill as well. We’ll drill it next summer.”

As for the Light property, Britten says it is a known occurrence that the company found “based on earlier academic work. We followed up on that but we were waiting until the ground was open. Once it was released, we staked it. Probably just after Christmas we will do fieldwork on things we’d like to check out that haven’t been checked out yet.”

Britten expects more news from First Point’s other early stage properties in northern B.C., with assays due in the coming weeks. 

According to newsletter writer John Kaiser, First Point’s management “has gone beyond researching and sampling ophiolite belts elsewhere in the world for awaruite-style mineralization and is now in land-acquisition mode . . . management has been reluctant until now to admit this shift for fear that somebody else familiar with ophiolite belts will make a speculative land grab.” In other words, First Point is in the perfect position to snap up the best plums of this new type of deposit around the world, Kaiser says.

“If Decar turned out to be unique, the future for First Point would be a buyout by Cliffs of First Point’s thirty-percent net
interest, whose value would be a function of the net present value of the mining scenario Cliffs develops for Decar. That pessimistic outcome would likely have limited First Point’s upside to about two dollars, where the implied value of Decar would be nearly seven hundred million dollars, based on close to one hundred three million fully diluted and a thirty-percent net interest. But if First Point emerges with a portfolio of similar-scale, one-hundred-percent-owned awaruite-style nickel prospects, the strategic value of First Point as a company could eventually exceed one billion dollars, which would imply a price target of ten dollars, or better.”

At presstime on Nov. 16, First Point’s shares were up 2¢ to 54¢ on 89,500 shares traded. The company has a 52-week share price range of 47¢-$1.06.