By Dr. Michael Green
Truly there’s a lot going on at Corcel, the natural resource exploration and development company with interests in battery metals and flexible energy generation and storage. This morning investors got a good update on the company’s 50%-owned Dempster Vanadium Project with the results of a highly compelling external report, along with the news that the focus is going to be expanded to include a review of the nickel potential.
In a nutshell, the results of a Corcel commissioned review of the project by CSA Global confirmed the potential to also pursue nickel targets. In the past, the company’s work has been mainly focused on vanadium exploration, pretty well ignoring the nickel potential of these tenements.
Oh, and it gets better than that as potential may actually exist for the nickel/molybdenum (NiMo) horizon as either a stand-alone development or a by-product for the vanadium focused Canol Formation. Timing for a broadening of this project couldn’t be much better in light of prevailing high global nickel prices and issues around security of nickel supply and Russian exports.
Truth is that little work has been done on the nickel potential, but the presence of this NiMo layer throughout the property has been known since 2007. However, past drilling has never looked at where this might thicken, such as in structurally complex zones, fold hinges or dome hinges.
Corcel’s progress has been such that the company has already identified one such target – a fold hinge in the north of the project area. Dempster just begs the application of some geophysical techniques and structural analysis to generate more drilling targets. This NiMo has the potential to be a bit of a game changer as apparently the historic results from Dempster’s NiMo horizon suggest relatively small zones of NiMo horizon thickening could prove to be independently economic, or at least provide by-product credits to any mining operation.
NiMo is nickel/molybdenum metal bearing, organic-rich black shales with platinum group metals (PGMs). Rich NiMo deposits of small areal extent are known in both Peru and China, with high grade NiMo layers reported at some other projects in the Yukon. Nickel has been mined from NiMo horizons within vanadium bearing formations in Songlin, Zunyi, Dayong, Guizhou and Hunan provinces, China. Importantly, the Talvivaara mine in Finland is an example of a similar head grade nickel deposit hosted in black shales and offers a method of processing that could be applied here which has with relatively low capex required.
Looking at the vanadium, the next steps are to define mineable limits with a focus on waterway avoidance and define an inferred resource definition with an initial programme of 5-20km of 400m x 400m spacing. The team will be exploring the bi-metal potential that might improve project economics as well as examining remote exploration options for zones of significant thicker mineralisation. The material derived from drilling is planned to be used in metallurgical testwork. While all this is going on the team will be exploring additional tenement additions in the area.
The Dempster Vanadium Project is located in Yukon, Canada and lies some 65km north of the Eagle River Lodge. There is excellent infrastructure access with the whole project lying within easy access of the Dempster highway. In all, the project includes 196 claims over an area of 40.96km².
The project covers a mineralised trend which has over 20km of potential strike. The primary exploration target is vanadium in black shales which are termed Vanadium-rich Black Shale, or BSV deposits, which represent regional scale contract between two distinct sedimentary formations. In these types of deposits, the BSV horizon lies at the bottom of the upper formation and at the base of the BSV horizon is a discrete layer of metal-bearing, organic-rich black shale. BSV deposits are suitable for low-cost mining/processing and at the moment similar sorts of plays are being developed in Nevada, USA, by Cellcube, Prophecy and First Vanadium.
So, lets welcome the Dempster Vanadium and Nickel Project. It has to be said that in the very beginning this was a nickel project which fundamentally has not been drilled very much. But when these results were determined nickel was really out of favour and so interest alighted on the vanadium potential.
Certainly, the NiMo represents an exceptionally rich but thin horizon where there is probably a good chance of this horizon thickening in specific areas where there is folding – which is what the team will be looking at with geophysics. Around the world, reassuringly there are other operators mining NiMo economically.
At this stage the vanadium horizon is where the value arises but there will be high upside from geophysics on the NiMo ahead of drilling identified targets. Compared to global vanadium projects, Dempster actually looks very strong and better than the management had thought – with a better grade than many of the deposits around the world – although it has its challenges as it might be thought to be a bit remote. It looks to us there might be an opportunity to vend in the rest of Dempster into Corcel ahead of this work on the ground – which will very neatly fit the company’s battery metals narrative.
Over recent months the perception of Corcel must surely be clearly changed for all to see as now the company’s two largest assets, the Mamabre and Wowo Gap nickel projects, have a much clearer pathway to production that might include, offtake/funding support/partnerships.
Now on top of this, the Dempster Vanadium and Nickel Project is beginning to show its spurs with its highly thought-provoking nickel potential which makes this project ultimately more valuable as well as being more likely to be progressed to an operating mine in the Yukon. We know that Corcel has the ability to take its projects to the next level – whether that be advancing its projects to cash flow or an exit – and so has the ability to also push Dempster rapidly up the valuation curve.
By any yardstick we believe Corcel is well undervalued. We initiated coverage on the shares in July 2021 with a Conviction Buy stance when the shares were trading at 1.625p and have since upped our target price a touch to 20.03p. At the current price of 1.30p, our stance of Conviction Buy remains unchanged.
Read our full research report on Corcel HERE
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