AEM reenergizes Nikolai nickel project
Drills outline nickel-cobalt-copper-PGM deposit at Eureka Zone Mining Explorers 2023 - January 18, 2024
Last updated 1/30/2024 at 10:41am
With firsthand knowledge that the Nikolai property in Alaska is seemingly tailor-made to be a domestic source of the nickel, cobalt, copper, and platinum group metals needed for America's energy transition, Greg Beischer shelved Millrock Resources' gold-focused project generator model in favor of Alaska Energy Metals Corp.
"Alaska Energy Metals is positioning itself to supply domestic markets with a source of critical and strategic metals," Beischer said when AEM made its debut early last year. "Located in the USA, we intend to help North America transition to electrical power for vehicles and other rechargeable battery powered products."
This potential domestic supply of critical energy metals is found at Nikolai, a nickel project that Beischer first investigated in 1995 as lead geologist for Inco. While the 1990s exploration at Nikolia discovered a potentially enormous body of disseminated nickel mineralization with associated cobalt and PGMs, the large body of massive sulfide nickel Inco was seeking did not materialize.
A lot has changed over the three decades since Beischer first landed at Nikolai – Inco was absorbed by Vale Ltd., the Nikolai project was picked up by a junior that carried forward exploration, and the nickel found on the Alaska energy metals property has become exponentially more critical due to the rocketing demands of a world transitioning to clean energy.
"The demand for nickel and cobalt for electric vehicle battery manufacture has been growing rapidly and is projected to increase significantly," said Beischer.
What has not changed is Nikolai lies at the heart of the Wrangellia Terrane, which happens to be one of the best places in the world to look for nickel deposits enriched with copper, cobalt, and PGMs.
Norilsk-style nickel potential
The Nikolai area of eastern Alaska first lit up on Inco's radar during the 1990s.
"The global nickel targeting team had identified this Nikolai project area as having a lot of geological and geochemical similarities to the Norilsk area of Russia, where there is the largest accumulation of massive sulfide nickel deposits in the world," Beischer explained during an interview with Geraldo Del Real.
Excited about the prospect of discovering a Norilsk-style nickel deposit in the United States, Inco sent Beischer to Alaska to carry out discovery-level exploration of this area lying on the very northern boundary of the Wrangellia Composite Terrane, an island arc that crashed into Alaska millions of years ago that gave rise to the Alaska Range and is considered prime hunting ground for the type of nickel deposits the global mining company was seeking.
It did not take long for Beischer and his team, which included the late Bill Ellis, to discover an outcrop of the high-grade massive sulfide nickel INCO had hoped to find.
One hole drilled near this outcrop on the Canwell block of claims at Nikolai cut 5.2 meters of massive sulfide averaging 0.71% nickel, 0.54% copper, 0.017% cobalt, 0.75 grams per metric ton platinum, and 0.85% palladium.
The excitement from this tangible evidence of a Norilsk-style nickel deposit at Nikolai continued to build as electromagnetic geophysical surveys lit up several large conductors about 15 miles to the southwest.
These conductive zones, which happened to coincide with equally intriguing geochemical anomalies, led to the first holes drilled into what is now known as the Eureka zone.
The core pulled out of these holes, however, was not the eureka moment Beischer and Inco had hoped for. Instead of the metallic look of massive sulfides, the core pulled out of the Eureka zone was black with speckles of disseminated sulfides that averaged around 0.4% nickel-equivalent, which includes the value of copper, cobalt, gold, and PGMs also encountered.
Even though the Eureka zone core contained consistent nickel over widths of 130 to 270 meters and the geological, geophysical, and geochemical evidence all indicated that this thick zone of disseminated massive sulfides ran for miles across the property, the grades were not high enough to support a mine during the 1990s.
"At the time, that was not going to be economic, but things are completely different now," Beischer explained.
Like a porphyry but nickel
One of the things that has completely changed since Beischer's team discovered the large body of disseminated nickel at Nikolai is the mining sector's transition toward very large but lower-grade orebodies, such as the porphyry deposits that now deliver the bulk of the world's copper.
For Alaska Energy Metals, however, the most critical shift is the transition to clean energy technologies powering enormous new demand for the metals found at Nikolai.
This is because nickel and cobalt are key ingredients in the lithium-ion batteries powering electric vehicles and storing renewable energy; PGMs are catalysts being used to split hydrogen atoms from water to create a clean fuel for the 21st century, and massive quantities of new copper are needed to wire a world that is trading in pipelines for powerlines.
The total demand for nickel, cobalt, and lithium is expected to be 23 times higher in 2035 than it was in 2021, and the demand for copper will double over the same span, according to a recent study completed by S&P Global analysts.
The Inflation Reduction Act is driving enormous demand for clean energy metals in the U.S. but also puts restraints on where those materials can be sourced and still be eligible for the billions of dollars of federal incentives and tax credits available under the act.
S&P Global Vice Chairman Daniel Yergin says the "Inflation Reduction Act is indeed transformative on the demand side. However, challenges remain in securing supply of critical minerals needed to meet growing demand and achieve its goal of accelerating the energy transition."
This has global mining companies taking a closer look at disseminated nickel deposits with cobalt, copper, and PGM byproducts – basically, the nickel equivalent of a copper porphyry.
Ideal energy metals recipe
The nickel-rich disseminated sulfides carrying appreciable quantities of byproduct cobalt, copper, and PGMs found in abundance at Nikolai is a seemingly ideal recipe to help meet America's energy metal demands.
It is estimated that a roughly 2,500-meter core section of the much larger Eureka zone hosts somewhere between 475 million to 630 million metric tons of disseminated sulfides with 2.1 billion to 2.8 billion pounds of nickel, 697 million to 925 million lb of copper, 189 million to 250 million lb of cobalt, 825,000 to 1.1 million ounces of platinum, and 1.8 million to 2.4 million oz of palladium.
This early calculation is based on roughly 10,000 meters of drilling completed by Pure Nickel Inc. during the roughly 25-year-span between Beischer's departure and return to Nikolai, which included significant drilling across the length of the Eureka zone.
The work completed by Pure Nickel confirmed that Eureka is indeed a thick zone of disseminated sulfide mineralization with remarkably consistent nickel, copper, cobalt, and PGM grades.
Highlights from Pure Nickel drilling carried out between 2007 and 2014 include:
• 224.6 meters averaging 0.23% nickel, 0.06% copper, 0.017% cobalt, 39 parts per billion platinum, and 81 ppb palladium.
• 319.7 meters averaging 0.25% nickel, 0.09% copper, 0.018% cobalt, 54 ppb platinum, and 117 ppb palladium.
• 205.2 meters averaging 0.24% nickel, 0.09% copper, 0.017% cobalt, 61 ppb platinum, and 122 ppb palladium.
Confirming Eureka nickel
Alaska Energy's 2023 drilling, which was targeted to confirm and infill the widely spaced historical holes, cut similar grades and widths:
• 341.6 meters averaging 0.23% nickel, 0.08% copper, 0.02% cobalt, 0.107 g/t palladium, 0.051 g/t platinum, and 0.011 g/t gold in hole EZ-23-001.
• 296.6 meters averaging 0.23% nickel, 0.09% copper, 0.02% cobalt, 0.115 g/t palladium, 0.052 g/t platinum, and 0.013 g/t gold in hole EZ-23-002.
• 324.6 meters averaging 0.23% nickel, 0.08% copper, 0.02% cobalt, 0.119 g/t palladium, 0.053 g/t platinum, and 0.011 g/t gold in hole EZ-23-003.
• 356.2 meters averaging 0.22% nickel, 0.08% copper, 0.02% cobalt, 0.122 g/t palladium, 0.057 g/t platinum, and 0.014 g/t gold in hole EZ-23-005.
"We intersected exactly what we expected with these initial holes," Beischer said.
What was not expected is a potential fourth strata of mineralization below the three that had previously been identified at Eureka.
Alaska Energy had previously recognized three subzones of mineralization – Upper, Core, and Lower – at Eureka. The 341.6- and 296.6-meter intercepts noted above represent the composite of the three, with the Core zone tending to be higher grade than the other two.
The company's first two holes, however, cut another mineralized stratum below the Lower zone. Highlights from drilling this lower unit include:
• 49.4 meters averaging 0.15% nickel, 0.02% copper, 0.02% cobalt, 0.017 g/t palladium, 0.031 g/t platinum, and 0.008 g/t gold in hole EZ-23-001.
• 61.8 meters averaging 0.15% nickel, 0.03% copper, 0.01% cobalt, 0.019 g/t palladium, 0.028 g/t platinum, and 0.009 g/t gold in hole EZ-23-002.
Both these first two 2023 holes ended in this new lower unit of mineralization, leaving it open at depth.
"Two additional, parallel zones of mineralization may have been revealed within the current and historical drilling datasets," said Beischer.
Historical data discovery
The historical datasets Alaska Energy referenced when investigating the parallel zones of mineralization at Eureka are not just a haphazard collection. Instead, this is a well-curated and organized dataset representing more than US$22 million of exploration that extends all the way back to when Beischer first led Inco exploration on the property.
The company got its hands on this incredibly valuable set of well-maintained and organized exploration information for roughly US$1.5 million (C$2 million) in cash and AEM shares.
The dataset includes drill logs and assay data from all holes historically completed across the wider Nikolai area; data from eight types of airborne and ground geophysical surveys carried out over the property; lidar survey; and thousands of soil and rock samples.
AEM estimates that it would cost roughly C$40 million (US$29 million) and several years of exploration to replicate the geological, geophysical, and geochemical data it purchased.
"A strong return on investment will be realized almost immediately from this data purchase. Thousands of meters of drilling are represented, including holes in the Eureka Zone exploration target area," said Beischer. "The geophysical surveys will be invaluable for guiding our drill programs toward higher-grade zones of mineralization."
Alaska Energy Metals began enjoying returns on this investment with an inaugural resource calculation for Eureka Zone in November.
Based solely on the historical drill data, 319.6 million metric tons of inferred resource averaging 0.22% (1.55 billion lb) nickel, 0.02% (115 million lb) cobalt, 0.05% (372 million lb) copper, and 0.13 grams per metric ton (1.34 million ounces) palladium-platinum-gold was calculated for two pits at Eureka Zone.
"The two areas in which we were able to calculate an inferred mineral resource, based only on historical drill holes, are approximately two kilometers apart," said Alaska Energy Metals President and CEO Greg Beischer. "Other sparse, historical holes drilled between the deposits indicate a reasonable likelihood that further grid-based drilling will ultimately connect the two deposits together."
Given the uniformity of the mineralization, it is not expected to take the company long to achieve the drill density required to connect the Eureka East and Eureka West zones into a single resource that is roughly 3,500 meters long.
"The rapid growth in resources speaks to the consistency and predictability of the deposit, which remains open in all directions," said Beischer. "Eureka is quickly evolving into one of the larger nickel resources on the continent."