Nichols Point Minerals

Some random thoughts on the lithium market as i sip my morning coffee! The problem is that at the moment, there are only high quality assets that are operating. There's not a healthy spread of producers across the cost curve. There are no mid to low cost producers that can suddenly be turned on. And that's largely due to the recent rapid recovery in the lithium price and only the ones that survived the last down cycle staying online. Even the expansions, P2000 from PLS for example, which has existing infrastructure and is lower risk, is going to take several years to come online. The issue with this is, once the market swings into a deficit (like we are in now), due to the lack of quality assets that are able to come online, the tonnes come from marginal, high cost, price sensitive projects. This creates major instability and is very different to how most mature commodity markets behave (copper, Iron etc.). When the price rises, the extreme marginal tonnes rush in, when it softens slightly these tonnes exit. So we are just continually adding and removing unstable high cost tonnes. There are four main restarts/starts that are set to take place this year. DVP's pioneer dome, MIN's Bald Hill, Ngungaju and Core lithium's Finniss project. They could do a combined total of ~34kt this year. Pioneer Dome for example is going to be a DSO project, which means they aren't processing the ore themselves, they are selling ore ~1.2% Li2O grade. Just in June this year, they announced the FID for the start. The price assumption they've used is US$26,000/t China. Now the problem with this is, due to the recent cyclical price dip, the futures is now at US$22,000/t. If the lithium price keeps falling, it's possible that a large majority of these restarts (~34kt of LCE) won't go ahead. So if you take out 34kt of LCE, you're just getting higher lithium prices and repeating the same cycle. The faster the market grows, those marginal tonnes become an increasingly smaller proportion of total demand, making each cycle harder to balance than the last. Therefore, the price needs to go higher and stay there to incentivise new low cost projects to come online (excluding some low risk expansions from existing mines). If it doesn't, then prices could boom back to 2022 levels due to the combination of the pool of readily available high cost projects becoming increasingly scarce and the lag to build new mines. Also the fear of Jianxiawo being turned on is totally nonsensical. It's just an excuse to help drive the lithium price down. Why do we care so much about Jianxiawo coming back online (which would do about ~25kt this year), but nobody batted an eye lid when Bald Hill, Finniss, Pioneer dome and Ngungaju said they'd come online this year (which is higher at ~34kt this year). Also, as I've said many times before, even if it does come back online, due to the rapid growth of the market, it won't have the same effect as it did last time it was operating. That lever has been pulled. Cheers for reading!☕️

The amount of red tape and lack of incentives in the exploration/mining industry should be deeply worrying for all Australians. This new budget further discourages the important work of explorers and prospectors. Why is it that Australians don't pay tax on Tattslotto and gambling, but the people using their own money trying to find the next Broken Hill, that will generate billions in revenue, get crushed by taxes and red tape? Exploration and mining is without a doubt, the backbone of Australia. It practically funds everything and has done so, since the gold rushes of the 1800’s. Your cushy government job, your government funded construction project, your youth allowance, the overinflated fee you’re able to charge out as apart of the NDIS, your schools , your hospitals, etc.. It’s all a trickle down from the mining and resources industry, which in turn is thanks to exploration, which is largely in turn thanks to prospectors. It's our main productive industry that generates the country money. Agriculture comes second but its not even close. For those of you who don’t know how it works, every mine here starts with a prospector. A prospector is someone who out of their own pocket, tries to find early signs of mineral deposits. They take on a significant amount of risk. It’s highly likely they’ll go their entire career without finding anything economical. It’s a tough gig and there are no guarantees. Prospects that do get generated generally make their way to the capital markets via exploration companies who will raise millions of dollars to drill and further develop these prospects. 1 in 1000 projects becomes a mine. The problem is, it's becoming more and more difficult for prospectors to do an already very challenging type of work due to the serious amount of red tape and lack of incentivisation. Why would a prospector risk so much of their money when the incentive has become less and less with time. Prior to 1996, prospectors used to be tax exempt back when the government had an ounce of sanity. I mean why would you want to tax the guys who off their own backs are out finding Broken Hill which in turn will generate billions of dollars and thousands of jobs? I’d have thought you’d want to encourage that? Seems the government wants to discourage the generation of prosperity. The new budget just further lowered the incentive for prospectors even more. It makes me think they don’t want Australia having anymore mines. So without prospectors, mining will eventually shut off. The lack of greenfields discoveries already should be alarming every single one of us. There are a few companies drilling out prospects at the moment, but who is generating these prospects and when were they generated? There's barely anybody left doing the early stage work to get drill ready targets. No new ideas, no new prospects, just old regurgitated bits of ground. The country was built off mines such as Broken hill, Mount Isa, etc.. Broken Hill for example was discovered by Charles Rasp in 1883. It’s what founded BHP, a A$300 Billion dollar company. Paddy Hannan, first found gold in Kalgoorlie, leading to the generation billions of dollars in revenue. Lang Hancock discovered the iron ore potential of the Pilbara. EJ Simpson's work alone in the goldfields of WA is said to have largely boosted the entire of WA's economy greatly at the time. A single man's work boosted the entire economy of WA. They all did it with their own money, took massive risks and their government wasn’t working against them. Unfortunately these days, it’s quite the opposite and large sums of capital are going into developing overseas projects (Simandou Iron Ore, etc.). BHP, the company built in Broken Hill, is shifting investments overseas at a rapid rate. This should be very worrying for all Australians. We can’t even do a simple soil sampling program here without jumping through massive hurdles. Yes, that's right, a soil sampling program (not drilling) deeper than just 30cm will cost you ~$100,000 in red tape fees alone, before you even get started. Mines generally have a mine life of 15-20 years, so there will be a bit of a lag before we will feel the full effects. If prospectors die off, discoveries die off, mines die off, the economy dies off, Australia goes third world. Don’t vote for any politician until they have a plan to reduce taxes and red tape. We need to fix this before its too late. Cheers for reading. #Budget #mining #auspol

Magnetic survey (one of the many types of geophysics) basics with a real personal example. Have seen some outrageous magnetic targets and claims posted by some ASX listed companies and thought I'd better do a little post on the basics! You'll notice that when a discovery is made with the aid of magnetics (Julimar, etc.) a million look alike magnetic targets suddenly appear from other companies.😄 One thing I've noticed whilst working in the industry is that there is a big difference between a geologist and a geophysicist and usually, there is a big breakdown in communication between the two. Firstly, magnetic surveys aren't some magic tool used by exploration companies to directly detect orebodies. It's rare that an orebody will be detected directly using magnetics alone. Although several orebodies have been discovered directly with magnetics, its important to understand their limitations. They are a very important tool for mapping geology and structures (faults, etc.). There are some cases where it can detect an orebody directly. The following (with a few exceptions) are the main ferromagnetic minerals that are likely to stick out: Magnetite (Iron ore) Ilmenite (Mineral Sands) Pyrrhotite (Massive Sulfide Deposits) So if say a carbonatite (ferro-carbonatite) is rich in iron (magnetite), it could standout from the background. Same goes for a massive sulfide deposit rich in Pyrrhotite, or a mineral sands deposit rich in ilmenite. Olympic Dam is a good example (see below image). Given it's an IOCG (Iron Oxide Copper Gold), the magnetite within it allowed it to be detected. LCT pegmatites on the other hand (one example of many) can't be directly detected with magnetics in most cases. Some key concepts: TMI - Total Magnetic intensity A magnetometer records a value in Nanoteslas (nT). This Value is known as the TMI. Generally surveys are airborne and are flown in lines. The line spaces are important as it dictates how defined the survey will be. Government data is generally flown at 400m spaces. Private companies may decrease this to 50m-100m across their tenement to paint a more detailed picture, depending on what their goals are. Once the raw data is collected by the magnetometer, a number of corrections are made. I've listed some of them below: RTP - Reduced to Pole Very important correction applied to the data. Notice on the below picture that the magnetic field lines intersect the Earth’s surface at different angles depending on the location? At the equator its 0 degrees. At the magnetic north pole its 90 degrees. So an RTP correction essentially moves the anomaly as if its vertical (90 degrees, like you're at the magnetic north pole as the name suggests). If you don't undertake this correction, your anomaly may appear in 2D view to a different location to where it actually is. You could drill off the target and miss. You'll notice RTP TMI written on the Olympic dam magnetics below. Regional field correction - The earth's magnetic field varies greatly depending on the location. This needs to be accounted for. Diurnal correction - The earths magnetic field varies throughout the day. This change needs to be accounted for. Flight height correction - The earths magnetic field varies with height. This also needs to be accounted for. The height of the airplane needs to be taken into account. Artifact corrections - Things such as houses, sheds, etc. need to be removed from the survey as they may give a false anomaly. Once the data has been corrected, it can then be tweaked further to suit your purpose. 1VD - First Vertical Derivative. This takes a derivative of the of the magnetic data. Without digging into the mathematics, it basically makes shallower magnetic sources more pronounced and masks deeper sources. It looks at the changes in intensity, rather than the absolute highs and lows of the intensity. Short and longwave filtering. Again, without getting too bogged down into the maths, you can process your data to remove the short and long wavelengths. Shallower sources generally give off short wavelengths and deeper sources generally give off long wavelengths. At @NicholsPoint , we made a mineral sands discovery through the use of magnetics. The first step was to do an RTP transformation on the data. Then, we filtered out the longer wavelengths as to remove the deeper sources (mineral sands deposits are generally found quite close to the surface). The results were surprisingly good. As you can see on the left side of the second image, that's the unprocessed RTP data. The right side is processed data removing the long wavelengths. The deposit sticks out like a sore thumb (highlighted within blue box). In summary these are the very basics of magnetic surveys. It gets a whole lot more complex when you start performing things such as depth to magnetic sources (Euler Deconvolution, etc.), 3D modelling, etc.. They are a very important tool in mineral exploration. Orebodies have been detected directly using them, but its important to understand their limitations! Thanks for reading.

Given we are going to need a lot more lithium, i thought i might focus on lithium exploration and talk about our new tenement at @NicholsPoint whilst I sip my morning coffee! This is the basic recipe you need for hard rock lithium to occur 👨‍🍳. When looking for projects I consider prospective, they have to have the following: 1.) You need granitic intrusions in order for pegmatites to form. Pegmatites are essentially offshoots from the final stage of crystallisation of a granite. 2.) You need a 'fertile' granite, which contains the right recipe to form lithium bearing minerals within the pegs. Granites are split into S and I Type, with S-type granites being considered more prospective for LCT pegmatites. 3.) You need faults to act as conduits for the pegmatites, preferably deep tapping, major faults. 4.) You get the 'LCT' Pegmatites (the ones containing the good stuff) at the most fractionated part of the 'melt'. See the diagram below. 'LCT' pegs drawn in green. The K/Rb ratio is a good indicator of fractionation levels. I've made a separate post on this in the past. Link in the comments. 5.) You need the right type of rock for the pegmatites to intrude into (host rock). You'll note that a lot of the host rocks to large pegmatites are either metasedimentary or ultramafic (see $PLS, $LTR, etc.). A lot of the smaller, less developed pegmatites, are found within more brittle rocks such a granites, etc. Now that we have the recipe (the barebones), ill talk about my new tenement below: 30km North of Greenbushes ✅ Bridgetown Fault (same fault that feeds Greenbushes)✅ South West Terrane Greenstones (correct host rock) ✅ Beryl & Lithium occurrences within 1km✅ Parental Granite nearby ✅ Minimal Exploration ✅ If you're wondering why Beryl is generally targeted for lithium exploration, its because it contains Beryllium (Be). Beryllium generally occurs in pegmatites that have undergone a high degree of fractionation. See the chart below. Can't wait to start exploring this one! @NicholsPoint @James_Dou77

Thought I might give you all some clarity on some of the costs associated with exploration whilst I sip my usual morning coffee! This information isn’t that readily available, so you may be able to use it as a rough guide. A lot of people don’t realise this but assaying is actually more expensive per meter than AC drilling and slightly less than RC drilling! Assaying costs: 4 acid digest (tests for most elements except a couple such as gold)- $50 per sample. Fire assay (assay technique for gold)- $30 per sample. REE add on (added to 4 acid digest to check for Rare earths) - $11 per sample Drilling costs (AC) : Aircore - $25 per meter Hammer attached - $45 per meter (The aircore is used to punch through unconsolidated material (cover). Once you hit bedrock you need attach the hammer to get through the rock. They call this a “slimline RC” in the industry) There are other costs associated with drilling such as remobilisation/demobilisation but I’ll just stick with the cost per m for now to keep it simple. So whilst assaying is more expensive than drilling, there are methods you can use to reduce this cost. 1. Compositing drilling samples - its possible to combine multiple 1m drillhole samples into one sample. For example, you may combine 3 samples into 1. That way you’re only doing 1 assay instead of 3. If your assay comes back positive, you would then go back and re-assay each of these samples so you’ve got the 1meter breakdown. 2. Using a skilful geologist that can visually determine what’s worth assaying! This is probably the most important one and will save you a lot! @NicholsPoint with our Broomehill project will be drilling within 2 weeks time! So we will keep you all updated with how it goes. Cheers guys! @warrensparkes_ @James_Dou77