Nickel Exploration
Southern Cross Goldfields' nickel sulphide exploration is focused on the Bullfinch North Project, which covers the northern 66km of the Southern Cross greenstone belt in Western Australia. The Company recently announced (ASX Announcement 2 August, 2011) that it had entered into an agreement with Western Areas whereby Western Areas will acquire 70% of the Company’s nickel rights across much of SXG’s tenement package. The agreement with Western Areas excludes some tenements including the tenements at SXG’s Copper Bore project and the Company’s non-iron rights on Radar Iron’s tenement north of Copper Bore.
Previous exploration undertaken by SXG and others has resulted in the identification of multiple nickel sulphide targets within the Bullfinch North tenements, which include a 66km strike length with known favourable nickel sulphide host rocks (olivine cumulates). These include multiple targets, some with known drill intersections, such as Trough Well, Lady Agnes, Scorpio and Sirius. At Trough Well, previous RC drilling has intersected multiple zones of nickel sulphides within a classic Kambalda-style setting including an intercept of 20m @ 0.62% Ni including 4m @ 1.41% Ni. The Company is very pleased to have concluded a nickel rights agreement with Western Areas, a dominant and highly successful nickel sulphide explorer and producer in the region.
The agreement will ensure that appropriate focus and resources are allocated to testing the nickel potential of the Marda and Southern Cross tenements by Western Areas. It provides SXG shareholders with a highly leveraged exposure to any exploration success across much of SXG’s extensive tenement holding. The agreement has been structured in such a way that SXG retains exposure to any future nickel exploration upside by retaining a 30% interest in any nickel mineralisation discovered.
The Company believes that its tenements hold some of the best under-explored nickel ground in WA, hosting two of the highest grade nickel deposits in the world - Flying Fox (2Mt @ 4.7% nickel) and Spotted Quoll (2Mt @ 6.2% nickel), both owned by Western Areas NL. These deposits lie approximately 190km south of Southern Cross' tenements.