Lonmin doubles down on Wallbridge JVs in Sudbury

VANCOUVER — U.K.-based platinum group metals (PGM) outfit Lonmin (LSE: LMI; US-OTC: LNMIY) remains bullish on the Sudbury basin and its expansive joint venture with junior Wallbridge Mining (TSX: WM; US-OTC: WLBMF). On Sept. 20 Lonmin pledged another US$5.5 million in exploration capital over a big piece of Wallbridge’s 650 sq. km PGM portfolio in Ontario, which will expand on the US$5.4 million it funded this year.

Lonmin’s commitment includes $1.5 million in exploration expenditures and $1 million in cash-option payments on the Wisner properties; and $1 million in exploration at the North Range properties, which together comprise the North Range joint venture. Lonmin will also fund $2 million in exploration on the Sudbury Camp Joint Venture (SCJV) properties.

Lonmin’s new funding commitment follows what were labelled “encouraging results” during Wallbridge’s 2014 exploration program, which included 20,100 metres of drilling and extensive geophysics, mechanical stripping and geological fieldwork. The companies will soon finalize plans for their 2015 program.

Wallbridge’s Wisner program included 12,540 metres of mostly shallow scout drilling various targets as well as airborne, ground and borehole geophysics. Drilling reportedly intersected copper-PGM mineralization in 13 holes at four of the eight targets tested.

A discovery was made at the Twisted Wrench target after Wallbridge followed up on mechanical stripping that yielded 0.96% copper, 2.63 grams platinum per tonne, 5.13 grams palladium per tonne and 0.36 gram gold per tonne over 2.4 metres in channel TW-1. Drilling revealed similar mineralization over narrower intervals, including: 0.8 metre of 0.34% copper, 1.33 grams platinum, 1.41 grams palladium, 0.13 gram gold and 1.16 gram silver from 20 metres deep in hole 163.

At Wisner’s Southwest zone, hole 168 returned 1.55% copper, 3.21 grams platinum, 3.51 grams palladium, 0.53 gram gold and 22.6 grams silver over 2 metres from 32 metres deep.

Meanwhile, drilling on structure at Wallbridge’s small Broken Hammer open-pit mine extended mineralization to the east, with hole 136 yielding 1.2 metre of 2.2% copper, 0.64 gram platinum, 3.58 grams palladium and 0.17 gram gold over 1.2 metres from 23.4 metres deep.

The company reports that open mineralized trends have been identified extending from the Broken Hammer pit to the west.

The 2014 exploration program on Wallbridge’s SCJV properties included 7,500 metres of drilling and geophysical surveys on the Trill and Skynner Lake properties, as well as detailed geological modelling on the Windy Lake property.

No drill results were reported, but exploration identified the potential for several large embayment structures at relatively shallow depths at Windy Lake. Wallbridge notes that “embayment structures host over half of the ore deposits mined in Sudbury over the last century, and are attractive exploration targets.”

Proposed work will focus on Windy Lake, with drilling and geophysics planned.

The program on Wallbridge’s North Range joint venture involved ground and airborne geophysical surveys. The 2015 program on the North Range properties will reportedly include drilling and geophysics to follow up targets, and explore untested offset dykes.

In August Wallbridge reported concentrate shipments from Broken Hammer with a net payable metal value of US$1.3 million. The mine is expected to operate through second-quarter 2015, but will provide near-term cash-flow to Wallbridge, with the company shipping ore to Northern Sun Mining’s (TSX: NSC; US-OTC: LBEFF) Redstone mill in Timmins.

Wallbridge shares have traded within a 52-week range of 4¢ to 12¢, and closed at 4.5¢ per share at press time.

The company has 162.3 million shares outstanding for an $8.4-million market capitalization, with Lonmin holding a 15% equity stake.

Wallbridge recently secured a $1.5-million bridge loan from Auramet International, which includes an offtake agreement wherein Aurament will take all of the precious metal content in gravity concentrate produced at Broken Hammer.

South Africa-focused Lonmin reported US$71 million in cash and US$589 million in committed debt facilities in May.

The company was hit this year by labour strikes, and saw its annual metal-in-concentrate sales drop 41% to 215,117 oz. platinum.

The company recorded a US3.5¢-per-share loss in the first half.