Silver Elephant aims for Class 1 nickel production

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Silver Elephant Mining Corp. [ELEF-TSX, SILEF-OTCQX, 1P2N-Frankfurt] on Tuesday released a new mineral resource estimate for its Minago Nickel Project, which is located in the Manitoba’s Thompson nickel belt.

The company said the project contains a measured and indicated resource of 44.2 million tonnes of 0.74% nickel or 722 million pounds of contained nickel. On top of that is an inferred resource of 19.5 million tonnes of grade 0.74% nickel or 319 million pounds of contained nickel.

The estimate is classified as a combined open pit and underground resource.

On Tuesday, the company said it believes Minago has the potential to support future production of Class 1, high purity nickel for application in lithium batteries used in electric vehicles.

The Minago mineral resource estimate demonstrates that the project is one of Canada’s largest undeveloped sulphide nickel deposits, Silver Elephant said in a press release, Tuesday.  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 mineral resource estimate by means of a pre-feasibility or feasibility study.

Silver Elephant shares advanced on the news, rising 3.8% or $0.01 to 27 cents on volume of 294,960. The shares are currently trading in a 52-week range of 59 cents and 24 cents.

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. [NI-CSE].

The company said all resources occur within a mineral lease that is surrounded by 94 mineral claims plus a second lease held by the company covering a total area of 197 square kilometres.

The latest estimate is being announced just weeks after Silver Elephant said it had struck a deal with Victory Nickel to acquire the Minago Nickel Project by way of a cash and shares transaction, allowing Victory Nickel to eliminate its secured debt and continue to participate in the project.

The Minago Project is located in the southern extent of Manitoba’s Thompson Nickel Belt (TNB), within the same key geological formation as the Opswagan Group in which the Thompson nickel deposits occur. Those deposits include the Thompson, Birchtree and Pipe mines, which have collectively produced 150 million tonnes, grading 2.32% nickel since 1958.

Danniel Oosterman, Silver Elephant’s vice-president exploration and Canadian Operations, started his career at Falconbridge and Inco, and helped drill the T3 deposit in Thomson, not far from Minago.

Brazilian metals giant Vale SA [VALE-NYSE] currently mines and produces nickel concentrate at the heart of the TNB. Its nickel concentrates are shipped by rail to Sudbury smelter for processing to refined nickel.

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