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In This List

Legend Mining shares soar on 'new frontier' Fraser Range nickel discovery

Mining Exploration Insights December

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State of the Market: Mining Q2-2019


Legend Mining shares soar on 'new frontier' Fraser Range nickel discovery

Legend Mining Ltd.'s ASX stock soared to a "multiyear high" Dec. 9 after the announcement that it opened a "new frontier" with the discovery of massive nickel-copper sulfides at its Rockford project in the West Australian Fraser Range property.

The company said Dec. 9 that its third diamond drill hole RKDD007 in Area D, now called Mawson, intersected a 14.9-meter sulfide zone grading 1.07% nickel, 0.75% copper and 0.06% cobalt from 114 meters, occurring within a larger 70.15-meter disseminated sulfide halo which starts 76 meters below surface and is open in all directions.

Managing Director Mark Wilson said that result, which also included 2.1 meters at 2.03% nickel, 1.34% copper and 0.11% cobalt from 115.5 meters, has "all the hallmarks of a substantial mineralized system." Assays are also pending for 40.15 meters of disseminated sulfide halo.

SNL Image
Legend Mining Managing Director Mark Wilson with Area D core.
Source: Legend Mining Ltd.

Wilson said the result was a "watershed moment," not only for all Legend stakeholders but "all of the Fraser Range."

Having been in a trading halt since Nov. 28, Legend shares reached 12 Australian cents on Dec. 9, closing at 8.1 cents for a more than 92% gain.

Legend's announcement said the intersection of massive, semi-massive and net-textured nickel-copper sulfides at Mawson is significant as it is the first time such sulfides have been discovered outside of the "western stratigraphic trend" that hosts Independence Group NL's Nova, prospector Mark Creasy's recently discovered Silver Knight deposit, and Legend's own Octagonal prospect.

Legend has a large tenement holding over the newly defined "eastern stratigraphic package," which Wilson told S&P Global Market Intelligence was a "new frontier" that the discovery had opened up in an area believed to hold more significant mineralization.

The discovery was thus a "proof of concept" for the broader industry, particularly for that eastern side, as "a different magnetic rock package" to the other known mineralizations of massive nickel-copper sulfides such as Independence's Nova.

Going forward, Legend will undertake structural logging of the hole to guide future targeting, submit core samples for assay from the disseminated sulfide intervals above and below the main 14.9-meter sulfide zone, and analyze geophysical results.

It will also do a full interpretation of geological, geochemical and geophysical data from drill holes RKDD007 and RKDD005, with further diamond drilling to define the extent of nickel-copper mineralization.

Analyst optimism

Financial advisory MineLife's founding director Gavin Wendt, who initiated coverage on Legend when it was trading at 1.1 Australian cents per share in late 2015, said in a Dec. 9 LinkedIn post about Legend's "multiyear high" that it may be argued that the results are "the most significant since the discovery of the world-class Nova-Bollinger nickel-copper deposits by then-minnow, Sirius Resources."

Jon Bishop, head of research at Euroz Securities, which initiated coverage on Legend in October, said in an interview that such a mineralized envelope suggests it is unlikely to occur in a discrete zone.

The discovery also benefits from being shallow, and Bishop said its grades, "generally speaking," are equivalent to Nova, which lured investor attention to the Fraser Range when it was discovered in 2012.

Though there are still some companies winning tenements prospective for nickel in the area through a state ballot process, Bishop said the "big swathes" of acreage are now locked up by Creasy Group Pty. Ltd., Independence Group and Legend, in that order.

Creasy owns 26.8% of Legend and has a substantial holding in Independence Group, which in turn owns 14.2% of Legend.

Legend also noted Creasy's exploration team, which advised on Legend's discovery hole, after signing three "transformational" agreements with Creasy and Independence Group in July.

Legend inked joint venture agreements over several tenements within the Rockford project with Independence Group and Creasy in July. However, S&P Global Market Intelligence has learned that discovery hole RKDD007 was not from any of those, but from a tenement Legend bought from Creasy in 2015.

SNL Image
Prospector Mark Creasy, Legend Mining's Mark Wilson and
Independence Group CEO Peter Bradford signing agreements
in July 2019.

Source: Legend Mining Ltd.

Joint ventures

Legend said July 9 that it would raise A$9.8 million at 3.6 cents per share in a two-tranche subscription agreement with Independence Group, and inked a new joint venture agreement with Creasy over Fraser Range tenements E28/1716 and E28/1717 on the western margin of the Fraser Zone.

Legend, Independence Group and Creasy also entered into a separate joint venture agreement over Rockford North tenements E28/2190 and E28/2191, whereby Independence Group will hold 60%, management rights and responsibilities, and Creasy and Legend will have free carried interests at 30% and 10%, respectively.

Legend and Independence Group also entered into a new joint venture agreement over three 100%-owned Legend tenements — E28/2675 to E28/2677 — whereby the latter will hold 70%, management rights and responsibilities, and Legend will have a free carried 30% interest.