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Lifezone Metals surges on new nickel discovery at Kabanga

Lifezone Metals (NYSE: LZM) surged in the early hours of Monday’s trading session on the back of a high-grade nickel discovery at its Kabanga project in northwest Tanzania, which the miner claims as one of the world’s largest undeveloped nickel sulfide deposits.

Earlier, the company provided results from its 2023 diamond drilling program at Kabanga, focusing on the Safari Link area to test for a continuation of the high-grade nickel mineralization from the nearby Tembo zone. A total of 11 drill holes were completed, of which seven returned significant mineralized intercepts.

Hole KL23-29 returned 15.1 metres grading 2.24% nickel, 0.24% copper and 0.18% cobalt (2.83% nickel-equivalent), while KL23-27 returned 7.0 metres grading 2.84% nickel, 0.30% copper and 0.22% cobalt, (3.56% nickel-equivalent). The holes are located 150-300 metres northeast of the existing mineral resources at the Tembo zone.

The Safari Link area spans the 1.4 kilometres strike length northeast of the Tembo zone, incorporating the Safari zone. Lifezone’s geologists believe that the Safari Link area represents the best opportunity for future resource addition. Previous drilling in the Tembo North and Safari zones showed the high potential for a continuation of mineralization along this trend, the company said.

“Not only is our Kabanga nickel project believed to be one of the world’s largest and highest-grade undeveloped nickel sulfide deposits, but we have also continued to show that there are new areas for nickel discovery and more potential for resource addition,” Lifezone’s chief executive Chris Showalter stated in a news release.

The project has a current resource estimate of 25.8 million tonnes at 2.63% nickel, 0.35% copper and 0.2% cobalt in the measured and indicated category, and 14.6 million tonnes at 2.57% nickel, 0.34% copper and 0.18% cobalt in the inferred category. The metals have a recovery percentage of 87.2% for nickel, 85.1% for copper and 88.1% for cobalt.

Given the significant results from a limited drill program, Showalter highlighted Safari Link as a “a near-term opportunity” for resource and value addition, though he noted that it is too early to know if any high-grade nickel mineralization from Safari Link could be added into the definitive feasibility study, which is expected by the end of the third quarter.

Shares of Lifezone Metals gained 4.6% to $6.02 apiece by noon ET, though the stock is still trading at the lower end of its 52-week range of $5.42-$19.92. The New York-listed nickel developer has a market capitalization of $480.7 million.