Like leopards, nickel projects don’t change their spots. It’s no secret that commodity prices across the board took a battering towards the end of 2015 and the nickel price was caught up in the carnage. The New Year started badly for the sector with Panoramic Resources (ASX: PAN) announcing the suspension of operations at its Savannah mine in Western Australia, while Mincor Resources informed us all it would cease mining at its Kambalda nickel district Mariner and Miitel mines until there was an improvement in the metal’s outlook.

One important aspect overlooked by many industry watchers when this news came out, was that the projects themselves have not changed.

What has changed is the fundamental perception of how the market – currently – values each mine.

Needless to say this means that in the current environment it will be difficult to get a nickel project off the ground and up and running.

That doesn’t mean projects that have been idling at the rank, waiting for their turn, are not worth keeping an eye on.

On the contrary – these are the very same projects people should be vigilantly taking a great deal more notice of than they presently are.

Firmly entrenched in the upper echelons of this category is the Fisher East nickel project of Rox Resources (ASX: RXL).

The Fisher East nickel project is part of the company’s larger Mt Fisher project, located in the North Eastern Goldfields region of Western Australia 150 kilometres northeast of Leinster, where Rox has made four substantial nickel deposit discoveries over the last three years.

Early last year, Rox completed a Scoping Study, which determined the Fisher East project to be a financially robust and technically low risk project. “What we do know is that the Fisher East nickel project – at reasonably expectant nickel prices – is a goer,” Rox Resources managing director Ian Mulholland told The Resources Roadhouse.

“Our Scoping Study showed that, but with the nickel price sitting around half of what it was 12 months ago – that has had a big effect on our bottom line.

“The current nickel price is not going to support development - but in the meantime we have certainly defined enough resources for it to be an economic project.

“We have the mining part of the Pre-Feasibility Study nearing completion and we just released a Resource upgrade for the project.”

The recent revised Mineral Resource estimate for Fisher East increased contained nick-el by eight per cent from 72,100 tonnes to 78,000 tonnes.

Of particular note was the increase to the Indicated portion of the Resources, which leapt from 52 to 91 per cent.

Contributing to the increase was the Cannonball deposit, which now stands at 0.26 million tonnes at 2.8 per cent nickel for 7,300 tonnes.

The Camelwood deposit was upgraded to 2 million tonnes at 1.9 per cent nickel for 39,000 tonnes, while recent drilling, and re-modelling and separation of massive sulphides from disseminated sulphides updated the Musket deposit to 1.9 million tonnes at 1.7 per cent nickel for 31,600 tonnes.

The Fisher East total project Resources currently sit at 4.2 million tonnes at 1.9 per cent nickel for 78,000 tonnes.

The upgrade has strengthened the company’s belief in Fisher East as a project that is still too good to ignore and one that merits development. “It can definitely be done, we might just have to take things a bit slower than what we would like, simply because the market funding is not around at the moment to support it,” Mulholland said.

“That’s why the increase of the Indicated Resources to 91 per cent is important as it means we can convert a healthy part of the Mineral Resource to an Ore Reserve.

“When we can combine that with the results of the studies we currently have underway, will be ready to take advantage of any significant rise in the nickel price.

“There is a bit of a mantra going around at the moment of ‘Prepare, Wait, and be Ready’, and at Fisher East that’s exactly what we are doing.”

As enamoured with Fisher East Mulholland is, it is unlikely a conversation with him will end without him raising the Teena deposit at the company’s Reward project in the Northern Territory, where recent drilling returned further strong results of high grade-zinc and lead sulphide mineralisation in both defined lenses.

Lens 2: TNDD020: 35.4 metres at 13.2 per cent zinc + lead (Zn+Pb), including 21.2m at 18.6 per cent Zn+Pb;

TNDD021: 19.7m at 14.9 per cent Zn+Pb;

TNDD022: 20.8m at 12.8 per cent Zn+Pb, including 15.1m at 16.4 per cent Zn+Pb.

Lens 1: TNDD020: 12.8m at 9.4 per cent Zn+Pb, including 6.8m at 12.5 per cent Zn+Pb;

TNDD021: 7.2m at 9.2 per cent Zn+Pb;

TNDD022: 5.1m at 9 per cent Zn+Pb, including 3.8m at 11 per cent Zn+Pb.

“The drill results we received from Teena at the end of last year were nothing short of spectacular,” Mulholland said.

“The results we got way exceeded our expectations by drilling 50 per cent thicker with 20 per cent more grade than we were anticipating.

“There is a perception that the deposit is deep, but it is, in reality, no deeper than any number of similar deposits.

“This is the best discovery of zinc in Australia since the Century zinc discovery by CRA Exploration 25 years ago.”

The Reward project is subject to an option/joint venture (JV) agreement between Rox (49%) and Teck Australia (51%), a subsidiary of Teck Resources Limited.

Teck has elected to exercise the option to increase their JV interest to 70 per cent by spending expending up to $15 million on the project by 31 August 2018.

As at 31 December 2015 Teck had spent approximately $13.6 million.

“Having 30% (eventually) of a project being developed by a major company like Teck is worth an awful lot, yet the market just doesn’t seem to get this,” Mulholland mused.

Based on the results it has achieved at Teena to date, Rox has released a revised Explo-ration Target of 70 to 80 million tonnes at 11 to 13 per cent Zn+Pb (10 to 12% Zn, 1-2% Pb) for 7.7 to 10.1 million tonnes (17 to 22 billion pounds) of contained Zn + Pb metal.

Rox has announced it is looking to commercialise its interest in the project either by way of outright sale to a third party, or by a spin-off into a dedicated zinc company.

Since that announcement the company has had a steady stream of possible suitors wearing a well-trodden path to its front door.

“We are talking with a number of parties, which includes some major zinc players, and they’re all very interested,” Mulholland said.

“Our peers in the industry realise the value of the project.

“That’s in contrast to the inexperienced market watchers, who don’t have any familiarity with projects like this and are unable to recognise its huge value, mainly because it is such a long-term project.

“It’s the sort of project that makes a company really good money for 20 to 30 years rather than just five years.”

Rox Resources Limited (ASX: RXL) …The Short Story HEAD OFFICE Level 1, 34 Colin Street West Perth WA 6005 Ph: +61 8 9226 0044 Fax: +61 8 9322 6254 Email: admin@roxresources.com.au Web: www.roxresources.com.au DIRECTORS Stephen Dennis, Ian Mulholland, Brett Dickson MAJOR SHAREHOLDERS Drake Private Investments 3.4% Rox Directors 2.1%

Wally Graham

www.resourcesroadhouse.com.au

E: wally@resourcesroadhouse.com.au

M: 0410 788 304

A: PO Box 1272, Subiaco WA 6904