Way up north on the lip of the Athabasca Basin rock structure, a small company is hoping to someday develop a nickel/copper mine.
A rule of thumb in the mining exploration business suggests one in 1,000 prospective properties will become a mine.
ALX Resources has a long way to get to the mine development. Last year the name was changed from ALX Uranium to better highlight the focus on nickel and the reduced emphasis on two uranium properties in the Athabasca Basin.
The main project seems to be the Falcon Lake nickel prospect where older technology in 1929 estimated 3.75 million tons of low-grade ore grading .1 per cent nickel and .1 per cent copper and .15 per cent cobalt.
At today’s prices the per ton value would be $116 per ton, substantially less once loss of metal from processing. Even so, that is a high enough grade for an open mine, if the deposit is large enough.
ALX hopes modern technology will assist in finding higher grades. Grab samples from the zone on the property ran 2.07 per cent nickel, .25 per cent copper, .48 per cent cobalt, 15 per cent sulphur with minor amounts of gold, platinum and palladium.
Processing multiple metal ores is complicated and expensive, more so with the high sulphur content. What do you do with all that low value sulphur in the north where there are no roads, no ready markets?
At Rea Lake, the company has property of 70 million tons and a historical estimate of .1 per cent nickel and .1 per cent copper.
Last year, the company raised $2.3 million for exploration. With a share price of four one-half cents, raising money challenges the company.
Most is raised by selling something called flow-through shares as resource companies are allowed. These shares, often viewed as a tax dodge, are fully deductible from tax, reducing the effective costs to investors on these highly speculative undertakings.
Without flow-through shares most small resource exploration companies couldn’t exist.
This year, once drilling results from the 2019 program are known, ALX will continue trying to prove potential of the deeply buried orebody with the newest technologies.
Two uranium properties await better commodity prices and some work will be done on an Ontario gold property in the Red Lake district.
Northern Saskatchewan is bustling with base and gold metal explorers that include two who have outlined two promising lead/zink deposits in the eastern portion.
Investors may want to follow the progress, or lack of it, as ALX tried to develop a mineable deposit.
Except for high net worth investors willing to take a gamble on flow-through shares, ALX isn’t much of an investment.
Several years of drilling lie ahead before the company knows if it has a worthwhile orebody, or if it wasted all that money.
CAUTION: Remember when investing, consult your adviser and do your homework before buying any security. Bizworld does not recommend investments.
Ron Walter can be reached at ronjoy@sasktel.net
The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.
