Class 1 Nickel shares jump on Alexo-Dundonald resource update in Ontario

Shares in Class 1 Nickel and Technologies (CSE: NICO; US-OTC: NICLF) gained 43% Thursday to 20¢ apiece after the company released a second resource update in a month for the Alexo-Dundonald project in northern Ontario.

The Alexo North deposit shows a 63% increase in indicated material to 42,600 tonnes grading 0.92% nickel for 864,000 lb of metal (8% over the prior estimate). The inferred resource, though small, doubled to 500 tonnes at 0.32% nickel for 3,000 lb. of metal.

The Alexo North deposit is about 45 km northeast of Timmins. It’s one of four high-grade nickel deposits in the project, covering about 19 sq. km. The $31-million market-cap company said on April 24 that the Alexo South deposit hosted an indicated resource of 572,000 tonnes at 0.61% nickel for 7.7 million lb. of metal. Inferred resources now total 125,000 tonnes at 0.54% nickel for 1.5 million lb. of metal.

“We now look forward to future drilling programs, expanding our resources at Alexo-Dundonald and moving into economic studies such as our first preliminary economic assessment which is planned for 2024,” CEO David Fitch said in a statement.

Exploration potential

The deposit is open along strike and the company has completed a new geological model that’s yielded more targets for future drilling.

Updates on the remaining Dundonald South and North deposits are expected in the coming months.

Fitch said that management was not only focused on developing Alexo-Dundonald, but also exploring the potential to target and develop large-tonnage, low-grade, ultramafic-hosted nickel deposits in the Timmins area, citing Canada Nickel‘s (TSXV: CNC) Crawford deposit, EV Nickel‘s (TSXV: EVNI) CarLang A deposit, and Aston Minerals’ (ASX: ASO; US-OTC: WMMMF) Boomerang project.

Nickel prices have been under pressure, with current levels hovering around US$20,638 to US$20,462 per tonne, a 63% drop from the record May 2007 high of US$54,050 per tonne. This is mainly due to an influx of cheap nickel from Indonesia, driven by Chinese investment.