Nickel miner Western Areas NL and gold producer Troy Resources NL says they have accelerated drilling at their Sandstone joint venture in Western Australia after making an interesting new nickel discovery.
The companies told the ASX yesterday that drilling had intersected a potentially significant zone of nickel sulphide mineralisation at the Sandstone project, about 600 kilometres northeast of Perth in the East Murchison region.
Western Areas said drilling at Sandstone was at an early stage, but results to date had been very encouraging.
Further drilling and testing of early assays will be needed to confirm the indications of a good nickel values in early assays.
"A second drill rig is being sourced to accelerate the drilling program and to start testing other targets along the belt," the company said.
But it cautioned "there is insufficient information at this stage to estimate the true width of the sulphide zone".
Western Areas said a drill hole in the Area C zone at Sandstone had encountered between 1% and 1.5% disseminated nickel and up to 9.5%t nickel in vein form at shallow depth.
This was the first known significant occurrence of nickel sulphides at Sandstone, where there had been little previous drilling.
Further drilling will give the company information to estimate the true width of the sulphide zone.
The latest find has seen Western Areas advance the idea that it is outlining a major nickel province extending 500 kilometres from the south coast of WA to the Sandstone project.
"While the drilling at Sandstone is still at a very early stage, the results are already considered to be very encouraging.
"The association of prospective ultramafic rocks with nickel sulphide mineralisation in a favourable structural setting point to the outstanding potential of the Sandstone project, 400km north of Western Areas 100% owned Forrestania Nickel Project.
"The Company has interests in six regional nickel projects (excluding Forrestania) in what is interpreted to be a major nickel province extending for 500km from the south coast of Western Australia to Sandstone.
"Including the recent results at Sandstone, there are four recent nickel discoveries on Western Areas projects, ? within this province, outside Forrestania.
Western Areas is earning a 70% stake in the project with Troy holding the rest.
Separately yesterday, Reed Resources Ltd reported that a joint venture agreement with Western Areas has lapsed.
Under a deal signed in February 2007, Western Areas was to earn a 51% stake in the Mt Finnerty nickel project 130km west of Kalgoorlie in WA by spending about $1.5 million by February 26, 2010.
But WSA had only spent $1.32 million by that date, according to Reed, and the option lapsed.
Shares in Western Areas were up 6c cents at $4.91. Troy shares were down 2c at $2.18.
