Drilling on the Block 2 deposit at the Kabanga nickel-cobalt prospect owned by Sutton Resources (VSE) returned a number of wide, near-surface intersections confirming the project’s bulk-tonnage potential.
Drilling results included a 74.9-metre intersection grading 0.86% nickel, 0.15% copper and 0.09% cobalt; an 85-metre intersection grading 0.76% nickel, 0.13% copper and 0.07% cobalt; a 144-metre intersection grading 0.66% nickel, 0.11% copper and 0.057% cobalt; and a 125.5-metre intersection grading 0.72% nickel, 0.15% copper and 0.067% cobalt.
Sutton has exclusive exploration rights to over 25,000 sq. km in northwestern Tanzania known as the Kagera area and recently reached an agreement with BHP Minerals International, giving that company the right to earn a two-thirds interest in the project. To earn the interest, BHP must fund exploration and development costs on the project to the completion of a feasibility study and a production commitment.
The recent drilling was done in the Kabanga portion of the property which falls under a separate agreement with BHP.
BHP can earn a 58% interest in the Kabanga by funding 50% of costs incurred between July 1, 1992, and June 1, 1993, up to a maximum of US$75,000 per month and 100% of all costs thereafter to the completion of a feasibility study and a commitment to develop a mine on the property.
Based on previous drilling on Block 2 by the United Nations in the 1970s, and by Sutton more recently, preliminary reserves were last estimated at about 20 million tonnes grading 1.22% nickel, 0.17% copper and 0.08% cobalt contained in a larger reserve measuring over 36 million tonnes grading 1.05% nickel, 0.21% copper and 0.11% cobalt.
A new reserve estimate based on the recently completed 10-hole drilling program has not been completed.
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