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Shares in Lifezone Metals (NYSE: LZM), 17% owned by BHP (NYSE: BHP; LSE: BHP; ASX: BHP), rose in the early hours of Monday’s trading session on news about a high-grade nickel discovery at its Kabanga project in northwest Tanzania.
Among the highlight results from last year’s drilling program was hole KL23-29 that returned 15.1 metres grading 2.24% nickel, 0.24% copper and 0.18% cobalt (2.83% nickel-equivalent), according to a news release on Monday. Hole KL23-27 returned 7 metres grading 2.84% nickel, 0.30% copper and 0.22% cobalt, (3.56% nickel-equivalent). The holes are located 150-300 metres northeast of the existing resources at the Tembo zone.
Last year’s drilling focused on the Safari Link area to test for a continuation of the high-grade nickel mineralization from the nearby Tembo zone. A total of 11 drill holes were completed, of which seven returned significant mineralized intercepts.
Safari Link spans the 1.4-km strike length northeast of the Tembo zone, incorporating the Safari zone. Previous drilling in the Tembo North and Safari zones showed the high potential for a continuation of mineralization along this trend, the company said.
“Not only is our Kabanga nickel project believed to be one of the world’s largest and highest-grade undeveloped nickel sulphide deposits, but we have also continued to show that there are new areas for nickel discovery and more potential for resource addition,” Lifezone CEO Chris Showalter said in the release.
The strong results come about six months after Lifezone began trading on the NYSE, following the business combination between Lifezone Holdings and special purpose acquisition company GoGreen Investments.
BHP in 2022 invested $90 million into privately-held Kabanga Nickel, owner of the Kabanga project, which acquired the project in 2019, and $10 million into Lifezone Ltd., both of which are subsidiaries of the company. Lifezone Limited holds 83% of Kabanga Nickel and BHP holds 17%.
The project has a current resource estimate of 25.8 million tonnes at 2.63% nickel, 0.35% copper and 0.2% cobalt in the measured and indicated category, and 14.6 million tonnes at 2.57% nickel, 0.34% copper and 0.18% cobalt in the inferred category. The metals have a recovery percentage of 87.2% for nickel, 85.1% for copper and 88.1% for cobalt.
Given the significant results from a limited drill program, Showalter highlighted Safari Link as a “a near-term opportunity” for resource and value addition, though he noted that it is too early to know if any high-grade nickel mineralization from Safari Link could be added into the definitive feasibility study, expected by the end of the third quarter.
Shares of Lifezone Metals gained 6.3% to $6.00 apiece by mid-day in New York, though the stock is still trading at the lower end of its 52-week range of $5.42-$19.92. The nickel developer has a market capitalization of $473.9 million.
