Metal Energy (MERG) - High Grade Nickel Exploration in Canada

Metal Energy Corp. is a Canadian exploration company focused on identifying a world-class Nickel, Copper, and PGE deposit through the exploration of its Manibridge Mine and Strange Project, located in Manitoba and Ontario Canada.

The Manibridge Mine is located on the Thompson Nickel Belt, one of the world’s richest nickel districts, and is a past-producing mine. The mine was last operated in the 1990s and has extensive previous exploration and mining information available. The Manibridge Mine is an earn-in project through the agreement the company holds with CanAlaska Uranium Ltd.

Metal Energy Corp. halted the phase 2 drilling program at the Manibridge mine at the end of July 2022 upon the decline of the nickel market. The company decided to rather put the remaining drilling on hold until such a time that the nickel market was in a position to react favourably to any drilling announcement. The continuation of the drilling in an unfavourable nickel environment would lead to the company possibly needing to raise funds at a lower stock price upon the conclusion of the drilling program.

Manibridge mine

The Manibridge mine is a past-producing high-grade nickel asset located in Manitoba on the Thompson Belt, one of the world’s richest nickel districts. The previous exploration initiatives completed at the mine indicate high-grade nickel mineralisation below the previously mined-out area. The mine shows the potential to host various large high-grade nickel mineralisation zones.

The mine produced approximately 1.3 million tons of ore between 1971 and 1977 at an average grade of 2.55% nickel and 0.27% copper. The mining operations reached a depth of 381 m before being shut down. The assay results from the phase 1 drilling conducted by Metal Energy Corp. at the mine show nickel mineralisation highlights of 0.92% nickel equivalent (NiEq) over 32.95 m starting at a depth of 150.45 m and including an 11.45 m interval at a grade of 1.24% NiEq. The phase 1 assay results further show 1.13% NiEq over 9 m starting at a depth of 700 m including a 5 m interval at a grade of 1.62%.

Metal Energy Corp. remains vigilant regarding the nickel market and the possibility to restart exploration drilling. Sykes believes that the demand will only grow in the future as nickel is a key component in the production of electric vehicle (EV) batteries. The EV market according to Sykes is growing rapidly and the necessity of battery minerals to meet the market demand is also increasing.

Manibridge exploration

Metal Energy Corp. as part of its earn-in agreement with CanAlaska Uranium Ltd. announced on the 7th of June 2022 that it had started with its phase 2 drilling program at the Manibridge mine. The phase 2 drilling program is envisioned to consist of 10,000 m of drilling and is focused on delineating mineral resources at the past-producing mine.

The company halted the phase 2 drilling program at the end of July 2022 upon the decline of the nickel market. The company decided to rather put the remaining drilling on hold until such a time that the nickel market was in a position to react favourably to any drilling announcement. The continuation of the drilling in an unfavourable nickel environment would lead to the company possibly needing to raise funds at a lower stock price upon the conclusion of the drilling program. James Sykes, the CEO of Metal Energy Corp. explains the company’s rationale as follows:

“We wanted to complete 10,000 m, then the market just crashed out globally across the board. We completed about 5,200 m by the end of July and we just decided to be cash conservative. We had spent all of our flow-through commitment so we figured that we wouldn't have any penalties coming up. It was a wise and prudent move to retain as much of our capital because we don't know how long this market scenario is going to last. I see a lot of other nickel companies and nobody's getting any joy for nickel results. Therefore, to raise money at lower share prices really isn't something that we want to do.”

The company remains optimistic regarding the future of the nickel industry and the Manibridge project, with Sykes stating:

“Nickel. Everywhere you look. It's a great system. This is one of the reasons why we went after this project right away, and why we're so ambitious and bullish on it. Everywhere you look along this trend is just nickel, nickel, nickel. We use a 0.3% nickel cut-off, and it's always there. We're seeing sulphides, we're seeing nickel, we're seeing copper, we're seeing cobalt, even PG&E's, which were never assayed for before.”

The postponement of the remaining phase 2 drilling will not affect the earn-in agreement Metal Energy Corp. holds with Canalaska Uranium Ltd. according to Sykes, he explains that the company has met all the earn-in agreement requirements to date and is close to fulfilling all conditions of the agreement.

“We've completed every stage, all of the cash requirements, all the share requirements have been issued to CanAlaska Uranium Ltd. The one thing that we're lacking to reach that 100% is a total of USD$ 4 million in exploration expenditures. We've completed both - USD$ 3 million this year, so we've only got USD$ 1 million of exploration left to complete a 10,000 m program. I guess the remaining 4,800m would definitely get us over that obstacle, and then give us 100% of Manibridge.”

Re-assessing the nickel market and future plans

Metal Energy Corp. will assess the market reaction to the assay results of its phase 1 drilling program at the Manibridge project, from where it will be able to more clearly determine its strategy moving forward.  

“We're going to see how the results come out. We're going to see how the market reacts to results from the summer drill program. If it is positive - good, and that's the easy step forward. If not, then we know it will be a little more difficult on the path forward, but again, our intention for this project, right from day 1, was to bring this into an operating mine. It is such an easy scenario: the infrastructure is there; it was a past-producing mine. The mineralization is still there, a lot is going on for it. There are new mining techniques that can be applied. There are new processing techniques that can be applied that they didn't have back in the '70s and '80s when this was being mined out. You can take a lot more of the rock that is there, and I do believe you can make that economic.”

Metal Energy Corp., will whilst assessing the nickel market also investigate the appropriate mining techniques to implement at the Manibridge mine, be it an open-pit operation or a block caving operation. Block caving is an underground mining method that involves undermining an ore body, allowing it to progressively collapse on itself under its own weight. Block caving entails a large section of rock being undercut, creating an artificial cavern beneath the mineralised zone. The area below the mineralisation then fills with its own rubble as it collapses. This broken ore falls into a pre-constructed series of funnels and access tunnels underneath the broken ore mass from where it is then extracted. Sykes explains the possible mining techniques as follows:

“Where we're seeing 30 m of 1%, 40 m of 1%, that is what I would consider being near the surface. That's within 100 m-150 m from the surface. Is there open pit potential there? If so, I think that's an easy opportunity. If not, then there is potential for block caving. Block caving seems to be the open pit analogy in the underground scenario. It seems to be one of the most cost-effective, especially if you've got a bulk tonnage scenario, block caving works well.”

The company will further investigate the implementation of various separation techniques such as ore sorting at the Manibridge mine in the future. Ore sorting will enable an optimised milling circuit at the mine, leading to lower milling costs, Sykes explains:

“On the end of that, you've got other techniques such as ore sorting. With the sulphides, which are quite readily distinguishable through XRF scanners and things like that, you could crush your ore and then sort it, so you're sending less material into the mill at the end of things. You're saving a lot of costs on the milling side of things,”

Metal Energy Corp. remains vigilant regarding the nickel market and the possibility to restart exploration drilling. Sykes explains that the company is evaluating the market on a monthly basis to restart its exploration initiatives:

“Things can change so rapidly on a week-to-week, month-to-month basis that we do assess on the quarterly scenario, but trying to get this drill program done and looking at future raises is more the month-to-month scenario. We're going to drill 100,000 m and we have that permit for over 3 years. We applied for that amount because we want to drill that amount, so the more that we delay our drilling, the more we will have to do over a shorter period of time. There's kind of an urgency in a sense, to really continue to make our move on some steps forward on more of a tighter timeframe than on a quarterly scenario. Again, we're up against the market. I feel like our back is against the wall having this type of scenario, but we do believe that this is going to be big. We do believe there's a lot going on, so we'll assess as necessary.”

Sykes believes that the demand for nickel will only grow in the future as it is a key component in the production of electric vehicle (EV) batteries. The EV market according to Sykes is growing rapidly and the necessity of battery minerals to meet the market demand is also increasing. Sykes sums up to EV market and the demand for battery minerals as follows:

“This is the route that we are going, and without having the resources to help these burgeoning industries move forward, they're going to run stagnant, and it's not just the OEMs in the end who lose out if they can't get the resources, because you've got investors in those as well. It's all part of the big cycle of everything, and everybody needs to do their part. That's where we want Metal Energy with Manibridge to do our part; to provide the nickel that's required, and obviously, we need investors for that.”

To find out more, go to the Metal Energy website