Fathoming the Potential of Albert Lake: How Big is Fathom Nickel's Primary Target for their Imminent Drill Campaign?
CEO Ian Fraser joined me to talk their imminent high-impact drill campaign, and I take some time building out a hypothetical scenario to demonstrate how potentially huge their primary target could be.
tl;dr:
Fathom Nickel is just a couple weeks away from spudding its next drill campaign. With 4500 meters budgeted, the first half will be going into their Albert Lake property. Their primary target is eagerly anticipated and will finally be able to be drilled. Below, I provide some thoughts on the drill program based on my interview with Ian, but also provide a (very speculative) model of just how big this target might be which is the focus of today’s article.
3 parts: 1. The Interview. 2. The Companion Articles. 3. Summary and Transcript
1. The Interview
2. Companion Article(s)
Here’s the Cole’s Notes version of our interview:
Key Points
The primary target will see 2-3 holes 400-500m deep each into it.
Depth of the target appears to be 350-375m.
It’s been one of Ian’s favourite targets all along.
The primary target is very large - geophys anomaly is ~500m X ~500m.
Drilling will be 60-80m per day including transit.
They will also be doing above ground work filling in gaps on their maps.
Where they drill after those holes depends on what those holes bring to surface.
They will be using BHEM live in the field to direct their drilling.
Ian is still searching for the other half of old Rottenstone that got faulted away.
Gochager drill campaign still in the works - focus is on Albert Lake for now.
They will build the camp at Gochager for the summer campaign - was simpler and easier and meant they didn’t have to build a camp in the dead of winter.
Assays will take 6ish weeks in the labs. Expect results in late April-early May.
A little bit different approach this time around. I wrote out a (very speculative) thought exercise on just how big Fathom’s primary Albert Lake target could be. That is going to be my focus for this update as I think it captures nicely just how much potential Fathom’s current drill program holds. However, I still want to get down a bit here just what we can expect from Fathom’s drill campaign.
In the interview , Ian took the time to discuss the process that went into selecting their primary targets, and provided a lot of colour on the drill campaign as a whole. Most importantly for investors, he identified the 3 core targets that will likely make up their 2024 drill campaign. And while I am excited for all 3, the first one has long been circled by Ian and investors alike as a uniquely powerful target. This is because the layers of data that have gone into their target development all scream that something very interesting is down there. Grab samples, TDEM, grav anomalies have all aligned to produce one heck of a target. And it is big.
Take a look at the overhead map below. I have circled and numbered the three core targets. #2 and #3 sounds like they will be conditional on what #1 (and #2) bring up. It is obvious that target #1 is the ultimate focus here, which is why I wanted to explore a little bit its potential with some napkin math.
Fathoming the Potential of this Campaign: How Big is Fathom’s Primary Target This Campaign at Albert Lake?
During my conversation with CEO Ian Fraser, we spoke about Fathom’s primary drill target of its upcoming Albert Lake drill program. I asked Ian about what the size of this deposit could be if it actually ended up a deposit. Obviously Ian thinks it is potentially huge and special, but he was also (understandably) reluctant to put any numbers on it.
Ian’s reluctance is fair. Anomalies are not necessarily 1:1 in their relationship with the orebody they are highlighting. While we do have a decent sense of the size of the anomaly (roughly 400m X 500m X unknown depth), that is just the dimensions of the top of the anomaly. We have no idea what it looks like at depth - size or shape. Furthermore, and probably most importantly, it hasn’t even been drilled a single time. How do you judge the size of a potential deposit if it has never been drilled and you really only know with confidence the size of one axis of the 3 dimensional (theoretical) ore body that’s down there? You don’t. Not with any high degree of confidence.
So as a responsible geologist, there’s too many unknowns for Ian to take a stab at predicting the size of the deposit (assuming it ends up a discovery here).
Still, as a thought exercise, I thought I would build a potential model using a real life analogue so we can get even a rough sense of the size of the prize. I want to stress that what I am building here is purely speculative in nature. The assumptions I use to build my model rely on a lot of made up numbers that will almost assuredly be wrong. But still there is value I believe in fleshing out just what this target - and drill campaign in general - could potentially prove about Albert Lake and Fathom.
So, just how big is this target? I thought it made sense to use another famous Canadian nickel discovery - Voisey’s Bay. I found the dimensions of Voisey’s Bay’s original Ovoid deposit discovery that kicked off one of the most famous discoveries in Canadian history that ended with a $4.3B buyout of what was by then 150 mt of 2.22% NiEq in the early 1990s by Inco. (I can provide the sources I derived my info from if anyone likes).
The dimensions of the Ovoid deposit sound awfully familiar, measuring 500m by 250m and 100m thick. Within that deposit there was 32 million tonnes of ore grading 2.83% Ni, 1.69% Cu and 0.12% Co (or 3.69% NiEq). That is some 2.6 billion pounds of NiEq all on its own. Wow.
So, returning to Fathom’s primary target. Let’s arbitrarily say that the theoretical deposit is half the size we see from surface, putting it at 500m by 200m. Now, we don’t know how deep this potential target goes, but we do know that back in the spring Fathom pulled out 58.2m of 1.79% NiEq at its Gochager property. Not a perfect analogue, but likely the best we will find. I am going to use the grade and thickness of that drill hole as the basis of my work, but with two modifications:
First off – the tenor of the rocks at Albert Lake looks like they are typically considerably higher than Gochager Lake. Like 3X higher at times. For the sake of this discussion, let’s (somewhat arbitrarily-yet-conservatively?) say tenor is ~60% higher at the primary target this year and push the NiEq number to a nice, round, 3%. (I like easy math.)
Secondly, we don’t know the true width of that intercept, so let’s round down to 50m. Ian made the point that the powerful nature of the EM signature suggested it was a thick target, but let’s keep it simple, use a Fathom-created data point, and say our primary target is 500m by 200 m by 50m depth.
Ian’s speculative geological model showing the folding of the sedimentary rocks within the granite.
So, just how big is that? These dimensions makes the overall size of the target about 40% the size of the Ovoid deposit. Working the numbers this way gets us a tonnage target of ~13mt. Working by specific gravity those dimensions get us to 16.5mt. Let’s pick the smaller one and say our primary target is 13Mt.
So what does 13Mt at 3% NiEq produce for a potential deposit? Somewhere in the neighbourhood of an eye-popping 860 million pounds of NiEq. Even reducing down to 2% NiEq still gets us to over 570 million pounds. Reminder here that it takes about 500-600 million pounds of high grade nickel for a deposit to be truly mine worthy. So with just a couple of drill holes this campaign, Fathom has the potential to find a mine, with many more targets waiting to get drilled. You can see why people are excited.
Because this is hardly the only target, but rather one of a large number of high-quality drill-ready targets as well as many others in earlier stages. And you know that if they come good on ther first target it is going to derisk the others significantly. There is anomalous nickel all over up there, the goal now is just vectoring in on where it is all coming from. All this is to say that if this primary target comes good this company has the potential to be one of the most exciting stories of the year.
I don’t think I have to say much more to make my point here. To say this drill campaign is high impact and the potential immense is a massive understatement. If Ian is right, this could be an absolutely transformative couple of months. Like “hold onto your butts” kind of action. Again, this is all the breathing definition of speculative work, and I am sure mother nature will make sure I am wrong in a bunch of ways, but I believe the overall point I want to make is valid: If the core exploration thesis here is proven correct, then Ian has an absolute monster in hand. And the truth-telling machine will be turning in just 2 weeks.
3. Timestamped Summary & Transcripts
Click here to access transcripts for this interview.
01:18 Introduction to Albert Lake Targets
[02:31.77] Discussion on Albert Lake Property
Ian discusses the Albert Lake property, highlighting a robust conductor identified by a 2023 electromagnetic survey, which aligns with a gravity feature and is near the Rotten Stone mine. He emphasizes the need to drill to understand the cause of this density and conductivity.
[03:29.718] Pre-Drilling Analysis
Ian talks about their preparatory work and the importance of drilling to verify their findings. He presents a visual package showing the location of the Rottenstone deposit and a conductivity zone identified over a 500-meter span, which is stronger than the Bay Island trend.
[05:27.33] Geophysical Interpretations
The geophysical models suggest the EM conductor is 350-375 meters below the surface, not visible at the surface. They plan to drill to explore this feature and other targets.
[07:49.794] Geological Complexity
Ian explains the area's geological complexity, including the impact of magmatic events and structural changes. He mentions the possibility of a large magmatic source, referring to it as a "mother rottenstone."
[10:41.654] Drilling Plans
The first drilling target is prioritized. Ian discusses the use of borehole electromagnetic (BHEM) methods to guide drilling directions and further exploration decisions based on initial findings.
13:30 How many holes are budgeted for the primary target? How do you decide when to keep drilling or not if you find success
[13:07.466] Adaptability in Exploration
Ian emphasizes the fluidity and adaptability in exploration, indicating that their approach will change based on initial drilling results. He also discusses budget considerations and the use of a twin otter to reduce helicopter dependency.
[15:33.198] Potential Discoveries
Ian comments on the impact of a significant discovery, such as another Rottenstone type intersection, and how it could be a game changer for the company. He mentions the need to also focus on the Gochager project during winter.
16:40 Other Albert Lake Targets?
[17:59.21] Additional Targets and Grid Work
Iam talks about additional targets, including the Bay Island trend and a new grid to be worked on. Ian mentions geological features like the F fault and conductivity in the area, which indicate promising drilling targets.
[20:29.526] Geological Correlations
Ian correlates conductivity features with geological structures, suggesting the potential continuation of the Rotten Stone deposit.
22:00 Top 3 targets at Albert Lake
[23:43.239] Speculation on Deposit Size
Ian discusses the potential size of the deposit, noting its length but acknowledging uncertainty in width and thickness. He highlights the need for more information to make accurate estimations.
26:40 Use of BHEM
[27:47.794] Borehole EM and Drilling Tactics
The discussion turns to borehole EM tactics and drilling strategies, including the possibility of adjusting drill locations based on BHEM results.
28:55 Use of XRF
[30:07.106] XRF Usage and Reluctance
Ian explains his reluctance to release XRF (X-ray fluorescence) results due to their variability and potential to mislead investors.
33:40 Core photos?
[32:33.975] Utilization of Core Photos
Ian favors using core photos to share findings, noting the need for caution due to variability in nickel tenor between different sites.
[34:59.734] Upcoming News Flow
Ian anticipates a significant news flow in the coming months as drilling progresses.
36:18 Financing update?
[37:19.39] Financial Aspects and Drill Timelines
Ian updates on financing, aiming to secure 4.5 million, and discusses drilling rates and timelines. He expects lab results by late April to May.
38:30 Lab turnaround
[39:41.986] Conclusion
Ian thanks Matthew for the opportunity to discuss their plans and emphasizes Fathom Nickel's commitment to transparency and thorough testing. The host appreciates Ian's insights and wishes him luck in the upcoming drill campaign.
This is one I am obviously “all in” on. I believe in Ian and his work. If there is something up their worth finding, Ian is going to find it. With any luck that happens this drill campaign. Hopefully see you on the other side of some exciting discoveries.
