Power Nickel says drill results boost confidence in Lion zone’s potential

Canadian junior explorer Power Nickel (TSX-V: PNPN) reported high-grade assay results from recent drilling in the Lion zone of its majority-owned Nisk property in Quebec that the company says boosts confidence about future output.

Drill hole 079, which intersected the main high-grade zone, shows 0.88 gram of gold per tonne, 23.2 grams of silver per tonne and 2.36% copper, Power Nickel said Tuesday in a statement. The company also released drilling results for two other holes located further west.

Buoyed by a recent $20-million financing round backed by billionaire investor Robert Friedland and mining veteran Rob McEwen, Toronto-based Power Nickel is working to boost drilling capacity at Nisk. The expansion will allow for “a much quicker turnaround of drill results, building the potential mineral resource in a shorter time,” the company said.

The drilling results “continue to inspire the team on how exciting the Lion zone is so far and its potential,” CEO Terry Lynch said in the statement. They “validate the expected strike, dip and plunge extensions to the Lion deposit model and increase the level of confidence about the continuity of the zone.”

‘Mildly’ positive

In a note to investors published Wednesday, analysts at Red Cloud Securities in Toronto called the latest results “mildly positive.” Results from Hole 79 “demonstrate continuity of mineralization in this portion of the zone,” they said.

Red Cloud on Wednesday raised its target price for Power Nickel to $1.25 a share from $1.05.

Power Nickel stock rose 4.6% to $1.14 apiece by mid-Wednesday in Toronto. It has traded in a 52-week range of 19¢ to $1.23.

Hole 080, drilled about 75 metres west of hole 079, returned “sporadic” metal values of 0.38% copper, 0.213 grams per ton of palladium and 0.36% copper in separate assays, Power Nickel also said Tuesday. Hole 081, about 100 metres below, caught the top edge of the main Lion zone and returned 4.85 metres of 1.85% copper equivalent, the company said.

Autumn drilling

Power Nickel expects to complete another 15,000 metres of drilling by the end of April. Results from 14 more holes from the autumn drilling program are yet to be disclosed.

Although assay laboratories have been backed up, “we hope to update the market in the coming weeks with more results along with clarity around the plans and objectives for the rest of this program,” Lynch said.

The Nisk project is located 55 km east from the Cree Nation of Nemaska community in the Eeyou Istchee James Bay territory of Quebec. Power Nickel holds an 80% interest in the 46-sq.-km property.

Nisk, in Quebec’s James Bay region, is expected to become Canada’s first carbon-neutral nickel mine by using carbon capture and hydroelectric power.