Nickel Cobalt

The Wilconi Project is situated 700 kms from Perth and has excellent associated infrastructure in the vicinity. BLK has a 280-man camp and operates a fly-in fly-out mining roster for its Wiluna Gold Operation. Power generation is fuelled by a gas pipeline connected to the Goldfields Gas transmission line with backup diesel power. The township of Wiluna lies immediately east of the project.

The Wiluna region was first explored in the late 1960’s for nickel sulphides (Mt. Keith style). In the early 1970’s the Wilconi area was drilled for nickel laterite mineralisation and subsequent explorers focussed again on the nickel sulphide potential until 2005, when the then operator Agincourt Resources Ltd (Agincourt) drilled the deposit for nickel laterite.

Agincourt commissioned Snowden Mining Industry Consultants (Snowden) to conduct a mineral resource study. This study, completed in 2005, returned a JORC (2004) inferred resource of 80.5 Mt grading 0.77% Ni and 0.058% Co using a 0.5% Ni cut-off grade.

The Wiluna nickel-cobalt laterite deposit is located within the Archaean Norseman-Wiluna greenstone belt. The nickel-cobalt mineralisation has developed through lateritisation of the Perseverance ultramafic sequence and extends for around 20 km along strike and is up to 1,500 m wide.

The Perseverance ultramafic sequence trends NNW-SSE and dips steeply towards the east. Locally, the geology consists of a less continuous western ultramafic sequence, and a more continuous eastern ultramafic sequence (Figure 3). The eastern sequence is offset by a north-south trending fault at around 7,056,000 mN, interpreted from aeromagnetic data. Both the western and eastern sequences contain similar lithologies of olivine orthocumulate, olivine mesocumulate and minor olivine adcumulate rocks. Pyroxene cumulate and gabbro is generally located along the western margins, with olivine pyroxene cumulate found along the eastern margins. At the boundaries of the ultramafic sequence are generally intermediate and mafic volcanic rocks and dolerite.

The region is covered by a thick blanket of lateritic regolith and outcrop is sparse and the detailed geological understanding is based primarily on the extensive drilling conducted over the deposit. Nickel and cobalt mineralisation has been formed by intense weathering (lateritisation) and has concentrated in a saprolite clay layer that overlies the ultramafic rock unit. The depth to significant (>0.5% Ni) mineralisation ranges from 2 m to 60 m. The nickel mineralisation zone can be up to 30 m thick, averaging around 4 m in thickness. Detailed studies have shown that cobalt has been preferentially enriched in the upper portion of the saprolite clay layer and this zone has been modelled independently and incorporated into the updated resource estimate.

Completed in January, a three month diamond drill campaign comprised 31 holes over 1490.7m and follows last year’s reverse circulation (RC) drill program totalling 11,096m. Most holes were drilled at a 60 angle towards the west in order to detect any steep structures that focus deeper weathering, producing thicker mineralisation in the lateritic profile.

A-Cap’s 2021 RC drill program clearly defined a particular rock unit (olivine rich ultramafic) that underlies the better grades in the laterite. This unit can be traced over much of the 20km of strike of the broad ultramafic package, and the unit is approximately 250m wide, and lies within the total ultramafic package. Drilling the laterite above this unit mostly intersected >1% nickel with associated Co. Zones of thicker (+30m) mineralisation identified in the RC drilling that represent “keels” in the lateritic profile.

Large diameter cores (90mm) were drilled to ensure good recoveries were obtained in the soft lateritic ores to permit bulk density determinations and to provide sufficient sample for metallurgical testwork and engineering studies. Metallurgical testwork is underway to determine the best methods of nickel and cobalt extraction and optimise metal recoveries for the various ore types.

• The project has significant past drilling to enable A-Cap to value its potential
• The deposit lies in largely granted mining tenements
• Infrastructure associated with Blackham’s gold mining is in place
• Environmentally safe with a long history of mining in the area
• New and innovative technologies have been developed to allow A-Cap to “tailor make” the pre-feasibility work without the legacy of past mistakes
• The electric-vehicle (EV) revolution is ushering in a golden age for battery materials, best reflected in a dramatic increase in price for two key battery commodities, lithium and cobalt, over the past 24 months (Source: McKinsey. Lithium and Cobalt: A Tale of Two Commodities Report June 2018)

Significant results from the diamond drilling include:

• WCN21DDH001: 19 metres of 1.11% nickel and 0.08% cobalt from 26 metres
• WCN21DDH005: 9 metres of 1.17% nickel and 0.06% cobalt from 57 metres
• WCN21DDH006: 10 metres of 1.53% nickel and 0.05% cobalt from 39 metres
• WCN21DDH008: 11 metres of 1.25% nickel and 0.14% cobalt from 39 metres
• WCN21DDH011: 10 metres of 1.16% nickel and 0.13% cobalt from 31metres
• WCN21DDH015: 14 metres of 1.33% nickel and 0.07% cobalt from 22 metres
• WCN21DDH019: 9 metres of 1.18% nickel and 0.07% cobalt from 13 metres
• WCN21DDH0023: 9 metres of 1.14% nickel and 0.03% cobalt from 14 metres
• WCN21DDH024: 16 metres of 1.19% nickel and 0.08% cobalt from 26 metres
• WCN21DDH025A: 16 metres of 1.14% nickel and 0.08% cobalt from 25 metres
• WCN21DDH026: 13 metres of 1.27% nickel and 0.10% cobalt from 22 metres
• WCN21DDH028: 10 metres of 1.13% nickel and 0.08% cobalt from 18 metres

* Intercepts calculated using a 0.7% nickel cut-off, minimum 2m intercept and maximum 1m internal dilution 2 ** The zone of mineralisation is generally flat-lying and all drill holes intersect the mineralisation at approximately 60˚ to the mineralisation orientation. ***Full drilling results are included in the Appendices of this announcement.

Significant RC drilling results to date are:

• WCN21RC003: 6 metres of 1.36% nickel and 0.11% cobalt from 3 metres
• WCN21RC020: 6 metres of 1.33% nickel and 0.11% cobalt from 10 metres
• WCN21RC022: 11 metres of 1.41% nickel and 0.27% cobalt from 11 metres
• WCN21RC037: 14 metres of 1.50% nickel and 0.15% cobalt from 26 metres
• WCN21RC040: 19 metres of 1.18% nickel and 0.07% cobalt from 11metres
• WCN21RC082: 18 metres of 1.27% nickel and 0.10% cobalt from 13 metres
• WCN21RC088: 35 metres of 1.01% nickel and 0.05% cobalt from 11 metres
• WCN21RC0105: 27 metres of 1.17% nickel and 0.07% cobalt from 15 metres
• WCN21RC143: 4 metres of 1.45% nickel and 0.22% cobalt from 35 metres
• WCN21RC144: 5 metres of 1.62% nickel and 0.44% cobalt from 37 metres
• WCN21RC145: 5 metres of 2.11% nickel and 0.43% cobalt from 38 metres
• WCN21RC150: 8 metres of 1.37% nickel and 0.09% cobalt from 37 metres
• WCN21RC184: 11 metres of 1.73% nickel and 0.12% cobalt from 47 metres
• WCN21RC202: 15 metres of 1.58% nickel and 0.08% cobalt from 24 metres
• WCN21RC205: 13 metres of 1.47% nickel and 0.12% cobalt from 39 metres
• WCN21RC236: 5 metres of 1.38% nickel and 0.23% cobalt from 40 metres
• WCN21RC237: 3 metres of 1.63% nickel and 0.44% cobalt from 45 metres
• WCN21RC244: 15 metres of 1.88% nickel and 0.13% cobalt from 42 metres
• WCN21RC249: 19 metres of 1.28% nickel and 0.10% cobalt from 31 metres

* Intercepts calculated using a 0.7% nickel cut-off, minimum 2m intercept and maximum 1m internal dilution ** The zone of mineralisation is generally flat-lying and all drill holes intersect the mineralisation at approximately 60˚ to the mineralisation orientation. ***Full drilling results are included in the Appendices of this announcement. ACap is still awaiting 4m composite results for 37 drillholes.

Large quantities of good quality water will be required in various stages of the treatment process. Water consumption for a 2Mtpa operation has been estimated from other project data to be about 300 l/sec. The water in the region is generally saline, and may require low cost dechlorinating as part of the plant flow sheet.

The site is connected to a major gas pipeline from the Northwest Shelf Oilfield which will provide an economically viable power source. The current gold operations utilise this power.

Wiluna is connected to Perth and Kalgoorlie by a well developed road and highway network and has an all weather airstrip with regular flights servicing the mines and local community.

Following a 256 RC infill drilling program in 2021, A-Cap Energy Limited (A-Cap, the Company) has upgraded the Wilconi Ni-Co resource, with parts of the resource now reported as Indicated. Independent geological resource specialists, Mining Plus Pty Ltd (Mining Plus) were commissioned by A-Cap using historical and recent drilling data to update the Wilconi Mineral Resource estimate, which is presented in Table 1. Grade-tonnage information at various other Ni cut-off grades are shown in Table 2.

Wiluna Mining is a Perth based, ASX listed gold mining company that owns 100% of the Wiluna Gold operation located in the Northern Goldfields of Western Australia.

Wiluna Mining Corporation Limited commenced gold production in October 2016 and produced 61,885 ounces of gold in the 2019/2020 financial year.

The Wiluna Gold Operation is currently a free milling operation supported by reserves at the Williamson open pit and the Golden Age underground mine. The Company is transitioning to sulphides mining and production of 100-120,000oz per annum commencing in late 2021, with redevelopment of the underground mine well advanced.

The operation has large defined resource of 7.02 Moz at a grade of 2.03 g/t of gold. The high-grade underground gold reserve is currently 661koz at 4.74 g/t.

Wiluna Mining is focussed on development of the sulphides operation, further resource development drilling to grow the Wiluna underground resources and reserves, and completion of a feasibility study at the end of calendar 2021 into the ramp up of production to circa 250,000oz per annum.