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Silver Elephant Mining Corp
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Silver Elephant releases Minago NI 43-101 estimate

2021-07-06 10:47 ET - News Release

Mr. John Lee reports


Silver Elephant Mining Corp. has released the results of a new mineral resource estimate for its 100-per-cent-owned Minago nickel project in Manitoba's Thompson nickel belt in Canada.

The mineral resource estimate (MRE) has an effective date of July 2, 2021, and includes a measured and indicated mineral resource of 722 million pounds of contained nickel and an inferred mineral resource of 319 million pounds of contained nickel. All resources occur within a mineral lease that is surrounded by 94 mineral claims plus a second mineral lease held by the company, comprising a total area of 197 square kilometres. The Minago project has been the subject of over $40-million in exploration, feasibility study and environmental permitting expenditures by various previous interests since early 2000, the most recent of these being by Victory Nickel Inc.

The MRE was prepared by Mercator Geological Services Ltd. AGP Mining Consultants provided pit optimization and associated services. Stantec Ltd. provided a site visit and professional support on an environmental permitting review. All three firms are independent of Silver Elephant, as defined under National Instrument 43-101. The Minago project MRE was prepared in accordance with the CIM (Canadian Institute of Mining, Metallurgy and Petroleum) definition standards for mineral resources and mineral reserves (2014) and is shown in an attached table. Separate reporting for the constituent Nose zone and North Limb zone appears two other attached tables. A technical report prepared in accordance with NI 43-101 Form F1 that documents the MRE will be filed on SEDAR by the company within 45 days.

Project setting

The Minago project is located in the southern extent of Manitoba's Thompson nickel belt. Manitoba Provincial Highway 6 and a high-voltage (230 kilovolts) transmission line both transect the Minago project area. Vale currently mines and produces nickel concentrates in Thompson at the heart of the Thompson nickel belt, 270 kilometres northeast of the Minago project. Its nickel concentrates are shipped by rail to its Sudbury smelter for processing to refined nickel.

There are no known legal, political, environmental or other risks identified by the company at the July 2, 2021, effective date that would materially affect potential future development of the Minago project.

Historical metallurgical program results

The 2010 feasibility study completed on behalf of Victory Nickel Inc. for the Minago project is now historical in nature and no longer applies. However, that study includes results of a metallurgical test program that developed a sulphidic nickel head grade/recovery curve for use in pit optimization and economic assessment of the project. Flotation development tests and locked-cycle tests (LCT) were conducted on a master composite of open-pit mineralization samples having grades of 0.54 per cent total nickel and 0.36 per cent sulphidic nickel. Results of this work indicated that a nickel concentrate containing 22.27 per cent nickel and 10.43 per cent magnesium oxide can be produced with an equivalent sulphidic nickel recovery of 77.2 per cent and a total nickel recovery of 52.3 per cent (feasibility study, Minago nickel mine, dated March 4, 2010, prepared by Wardrop Engineering Inc. for Victory Nickel and filed on SEDAR by Victory Nickel).

These historical metallurgical results are relevant to continuing evaluation of the Minago project and the company intends to thoroughly evaluate them through a new metallurgical program that will support its plan to move the Minago project forward through feasibility assessment leading to production.

Exploration potential

The Thompson nickel belt is the fifth-largest sulphide nickel belt in the world based on contained nickel endowment. It contains over 18 defined nickel deposits and has supported over five billion pounds of nickel production since 1959 (source: Naldrett, A.J., 2004, Magmatic Sulfide Deposits; Geology, Geochemistry and Exploration: Springer-Verlag, Berlin, 725 pages). Several producing and past-producing mines are located along the same fold structure at Thompson, known as the Thompson Dome, and occur within a few kilometres of each other. The Thompson, Birchtree and Pipe mines have collectively produced 150 million tonnes grading 2.32 per cent nickel since 1958 (Naldrett, 2004). Vale's Thompson operations produced 23 million pounds of nickel in 2020 (Vale annual report, 2020, dated March 23, 2021).

The Minago project is hosted by the Opswagan group, which is the same geological sequence in which the Thompson nickel deposits occur. The orebodies that comprise the currently operating Thompson mine occur in the Opswagan group's Pipe formation, particularly within the P2 schist member. Thompson-style nickel mineralization consists of magmatic nickel sulphide originally associated with mafic and ultramafic intrusions that commonly has been remobilization by regional metamorphism and deformation into favourable structural settings such as fold noses and limbs in host sequences. Nickel sulphides of economic importance also occur as disseminated to massive phases within and adjacent to the mafic and ultramafic intrusions themselves, with this setting best characterizing the Minago deposits.

The Nose zone and North Limb zone at Minago have generally similar structural, geological and mineralogical characteristics as deposits located on the Thompson Dome to the north. Nickel mineralization defining the new MRE in both zones of the Minago project remains open at depth and along strike, based on current drilling results, and the company has identified good opportunities to expand current mineral resources through future exploration in these areas.

Substantial volumes of nickel mineralization that are presently defined by drilling in the Nose zone and North Limb zone were excluded from the current MRE by the cut-off grades applied. The company believes that some of this mineralization could be included in future open-pit and underground resource categories if higher nickel prices develop. The current optimized pit shell has a maximum depth of approximately 350 metres below surface.

Results of inversion modelling of existing ground and airborne magnetic survey data are interpreted by the company as providing a good indication of mineralized zone continuity between the Nose zone and the North Limb zone and for extensions of these zones to depth and along strike. If proved to be correct, this could provide potential for definition of a district-sized deposit. Regionally, historical drilling completed five kilometres to the south of the Nose zone (South target) and three kilometres to the northwest of the North Limb zone (O Limb target) by Amax Exploration from 1969 to 1971 encountered nickel mineralization similar in style to that at Minago. The company believes that these two specific areas represent high-priority targets for further exploration and potential resource expansion.

In addition to exploration noted herein within the Minago project, the company recently tasked a professional team with significant expertise in the Thompson nickel belt with identifying additional prospective areas for staking.

Company remarks

The company believes Minago has potential to support future production of Class 1, high-purity nickel for application in nickel-lithium batteries used in electric vehicles.

The Minago MRE demonstrates that the Minago project is one of Canada's largest undeveloped sulphide nickel deposits. In the next 12 months, the company intends to carry out core drilling programs at Minago to expand existing mineral resources, address updating of environmental permitting established in 2011 to operate the project, and initiate economic evaluation of the MRE by means of a prefeasibility or feasibility study.

Qualified persons

Matthew Harrington, PGeo, of Mercator Geological Services Ltd. is responsible for technical disclosure regarding the Minago MRE contained in this press release. Both Mr. Harrington and Mercator are independent of Silver Elephant, as this term is defined under NI 43-101.

The technical contents of this news release have been prepared under the supervision of Danniel Oosterman, vice-president, exploration, for Silver Elephant. Mr. Oosterman is not independent of the company as this term is defined under NI 43-101.

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