Mexico’s proposed higher mining royalties could block nearly $7bn in investments
The Mexican government proposed raising mining royalties under the argument that metal prices have risen in recent years.
Well before Wyloo Metals began its fight with BHP (NYSE: BHP; LSE: BHP; ASX: BHP) for Noront Resources (TSXV: NOT), the Australian company signed a definitive agreement with Toronto-based junior Orford Mining (TSXV: ORM) for its West Raglan nickel project in Quebec’s Nunavik region.
The deal, signed in January, sees Wyloo earning up to 80% of the West Raglan project by spending $25 million on exploration over the next seven years. Wyloo was expected to spend $1 million of the $25 million this year, but has already spent $1.7 million.
“That’s a sign of how much they like this asset and how interested they are in nickel,” says David Christie, Orford Mining’s president and CEO.
Orford had exploration teams working at West Raglan this summer doing prospecting, mapping and sampling work, although Christie notes that it’s a “very short window to explore our properties due to the weather that far north.”
West Raglan was Orford’s first asset, a nickel-copper-platinum group element (PGE) project about 95 km south of the Inuit community of Salluit, well above the tree line in Nunavik. A camp scale property, West Raglan covers just under 84,000 hectares and is situated about 70 km (43 miles) west of two nickel mines, Canadian Royalties’ Nunavik nickel mine and Glencore’s (LSE: GLEN) Raglan nickel mine, the latter being the biggest nickel producer in Quebec.
Exploration work done to date at West Raglan has identified nickel-copper-cobalt-PGE mineralization across a strike length of more than 35 kilometres. Though the company has yet to release drill results, it says that six discoveries have been made, including five high grade mineralized lens clusters over a 2,500-metre strike length, with grades in the range of 2-3% nickel and 1% copper.
When the asset was acquired in 2012, interest in nickel-copper projects like West Raglan was low, Christie says, but now demand for the metal has taken off due to its use in the green energy transition.
“Things have certainly changed,” he told The Northern Miner. “Nickel has become a big target for the battery metals [sector], and with West Raglan being close to those two other mines, interest in it has been increasing. That’s one of the reasons that Wyloo became involved with us on this project.”
Along with exploration at West Raglan, the company has also continued work at its Qiqavik property, 20 km south of West Raglan. Qiqavik is an early-stage gold-copper project acquired in 2016. The 39,000-hectare, 100%-0wned project hosts several high-grade gold discoveries along a mineralized trend in excess of 40 km, but vast portions of the site remain underexplored, the company says.
This year Orford completed airborne geophysics, prospecting, till sampling and diamond drilling at Qiqavik. “We just finished all that in early September and we’re awaiting results as we speak,” Christie says, “and we’ve been working up from scratch, because there is little historical work done. But I believe there’s high grade gold there, at surface. I think it could be a brand-new gold district.”
(This article first appeared in The Northern Miner)
