Matt with Junior Resource Investing spoke with Ian Fraser about the target at Albert Lake near the old Rottenstone mine that I like so much. See below for details.
@JuniorResourceInvesting (Cleaned up and reposted to more boards - sorry for the repeat $FNI readers!) “How Big is Our Primary Target This Campaign at Albert Lake?” During my conversation with CEO Ian Fraser, we spoke about Fathom’s primary drill target of its upcoming Albert Lake drill program. I asked Ian about what the size of this deposit could be if it actually ended up a deposit. Obviously Ian thinks it is potentially huge and special, but he was also (understandably) reluctant to put any numbers on it. Ian’s reluctance is fair. Anomalies are not necessarily 1:1 in their relationship with the orebody they are highlighting. While we do have a decent sense of the size of the anomaly (roughly 400m X 500m X unknown depth), that is just the dimensions of the top of the anomaly. We have no idea what it looks like at depth - size or shape. Furthermore, and probably most importantly, it hasn’t even been drilled a single time. How do you judge the size of a potential deposit if it has never been drilled and you really only know with confidence the size of one axis of the 3 dimensional (theoretical) ore body that’s down there? You don’t. Not with any high degree of confidence. So as a responsible geologist, there’s too many unknowns for Ian to take a stab at predicting the size of the deposit (assuming ends up a discovery here). Still, as a thought exercise, I thought I would build a potential model using a real life analogue so we can get even a rough sense of the size of the prize. I want to stress that what I am building here is purely speculative in nature. The assumptions I use to build my model rely on a lot of made up numbers that will almost assuredly be wrong. But still there is value I believe in fleshing out just what this target - and drill campaign in general - could potentially prove about Albert Lake and Fathom. So, just how big is this target? I thought it made sense to use another famous Canadian nickel discovery - Voisey’s Bay. I found the dimensions of Voisey’s Bay’s original Ovoid deposit discovery that kicked off one of the most famous discoveries in Canadian history that ended with a $4.3B buyout of what was by then 150 mt of 2.22% NiEq in the early 1990s by Inco. (I can provide the sources I derived my info from if anyone likes). The dimensions of the Ovoid deposit sound awfully familiar, measuring 500m by 250m and 100m thick. Within that deposit there was 32 million tonnes of ore grading 2.83% Ni, 1.69% Cu and 0.12% Co (or 3.69% NiEq). That is some 2.6 billion pounds of NiEq all on its own. Wow. So, returning to Fathom’s primary target. Let’s arbitrarily say that the theoretical deposit is half the size we see from surface, putting it at 500m by 200m. Now, we don’t know how deep this potential target goes, but we do know that back in the spring Fathom pulled out 58.2m of 1.79% NiEq at its Gochager property. Not a perfect analogue, but likely the best we will find. I am going to use the grade and thickness of that drill hole, but with two modifications: First off – the tenor of the rocks at Albert Lake looks like they are typically considerably higher than Gochager Lake. Like 3X higher at times. For the sake of this discussion, let’s (somewhat conservatively?) say tenor is ~60% higher at the primary target this year and push the NiEq number to 3%. Secondly, we don’t know the true width of that intercept, so let’s round down to 50m. Ian made the point that the powerful nature of the EM signature suggested it was a thick target, but let’s keep it simple, use a Fathom-created data point, and say our primary target is 500m by 200 m by 50m depth. So, just how big is that? These dimensions makes the overall size of the target about 40% the size of the Ovoid deposit. Working the numbers this way gets us a tonnage target of ~13mt. Working by specific gravity those dimensions get us to 16.5mt. Let’s pick the smaller one and say our primary target is 13Mt. So what does 13Mt at 3% NiEq produce for a potential deposit? Somewhere in the neighbourhood of an eye-popping 860 million pounds of NiEq. And that is at this target alone. Reminder here that it takes about 500-600 million pounds of high grade nickel for a deposit to be truly mine worthy. And this is hardly the only target, but rather one of a large number of drill-ready targets as well as many others in earlier stages. And you know that if they come good on this target it is going to derisk the others significantly. Which is to say, if this primary target comes good this company has the potential to be one of the most exciting stories of the year. I don’t think I have to say much more to make my point here. To say this drill campaign is high impact and the potential immense is a massive understatement. If Ian is right, this could be an absolutely transformative couple of months. Like “hold onto your butts” kind of action. Again, this is all the breathing definition of speculative work, and I am sure mother nature will make sure I am wrong in a bunch of ways, but the overall point I want to make is valid: If the core exploration thesis here is proven correct, then Ian has an absolute monster in hand. And the drill is turning in just 2 weeks. #index #boardroom #nickel