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Tuesday, May 30, 2023
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.


FPX Nickel and Japanese government agency form alliance to carry out worldwide mineral exploration

The Generative Alliance to conduct awaruite exploration activities globally

FPX Nickel and Japanese government agency to carry out worldwide mineral exploration2
Decar Nickel District. Photo via FPX Nickel.

FPX Nickel Corp. (TSXV: FPX) (OTCQB: FPOCF) and the Japanese government’s agency for energy and mineral exploration have created an alliance to do mineral exploration activities in search of a naturally occurring nickel-iron mineral.

On Monday, the Vancouver-based company announced the partnership with the Japan Organization for Metals and Energy Security (JOGMEC) where the agency will exclusively finance the Generative Alliance to conduct awaruite exploration activities globally.

Awaruite is a naturally occurring nickel-iron mineral that can be used as a new source of low-carbon nickel supply for the electric vehicle battery supply chain.

The goal is to identify and procure promising properties with potential for awaruite nickel mineralization, similar to that found at the central British Columbia-based Baptiste Nickel Project, the company’s main project.

“The Generative Alliance has the potential to expose FPX’s shareholders to numerous exploration discoveries on a global scale, with the costs of the Alliance to be borne entirely by JOGMEC over the next two years,” FPX CEO Martin Turenne said in a statement.

The management committee will oversee the Generative Alliance, with each party appointing two representatives. Over the next two years, –until March 2025– JOGMEC will provide the sole funding for the alliance’s exploration activities.

Initially, FPX will operate the alliance and will receive an operator fee for providing management services. The alliance will benefit from FPX’s extensive global database, which was developed during the 2010-14 period when the company conducted reconnaissance exploration activities for awaruite nickel targets in over a dozen countries across four continents.

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Project funded by Japanese government

During the first phase of the Generative Alliance, JOGMEC will fund at 100 per cent up to $650,000 per year for a minimum of two years. Each of the parties will appoint two representatives to a management committee to oversee exploration activities, and FPX will act as the operator over the initial two-year term, earning a fee equal to 10 per cent of the General Alliance expenditures.

One or more specific exploration targets identified by the Generative Alliance may be advanced to a second phase to be further developed as a separate designated project.

Each Designated Project will have its own work program and budget with the objective, including through drilling, to test and further develop the identified targets. For each project, JOGMEC and FPX will fund 60 per cent and 40 per cent, respectively, for approved work programs.

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Baptiste Nickel Project,  a recent discovery of awaruite nickel mineralization

The Baptiste Nickel Project is FPX flagship project and it is located in an ultramafic setting where the awaruite mineralization formed during the nickel-bearing olivine host rock’s serpentinization, under low oxygen and low sulphur fugacity conditions.

FPX has conducted multiple bench- and pilot-scale metallurgical tests and technical studies, demonstrating that awaruite mineralization can be efficiently recovered through conventional magnetic separation and flotation unit operations, producing a clean, high-grade nickel concentrate.

FPX Nickel and Japanese government agency to carry out worldwide mineral exploration

Awaruite mined in Oregon. Photo via Mindat

The high nickel grade and low sulphur and deleterious elements make awaruite concentrates suitable for direct sale to the stainless steel industry, bypassing smelting, or using a relatively simple refinery process to supply the growing electric vehicle battery supply chain.

Furthermore, during the exploration period between 2010 and 2014 at the Baptiste project, FPX conducted reconnaissance exploration activities for awaruite nickel targets in over a dozen countries across four continents, generating an extensive global database of potential targets for awaruite mineralization in various jurisdictions. This database serves as a strong foundation for future exploration activities, aiming to identify high-quality targets based on the successful Baptiste project’s model.

The JOGMEC combines the roles of the previous Japan National Oil Corporation, responsible for ensuring a dependable supply of oil and natural gas, and the former Metal Mining Agency of Japan, responsible for guaranteeing a consistent supply of nonferrous metals and minerals while implementing measures to control mine pollution.

Klow Earn-In Agreement gives JOGMEC the chance to own part of the project

The Generative Alliance partners have made another agreement, the “Klow Earn-In Agreement.” It gives JOGMEC the chance to own a part of FPX’s Klow Project in central British Columbia.

Klow is located 120 kilometres northwest of Fort St. James and 55 kilometres north of Baptiste.

JOGMEC can earn a 60 per cent stake in Klow by spending $1 million on exploration before March 31, 2026.

After that, both parties will share the exploration expenses based on their ownership. If one partner’s stake falls below 10 per cent, their stake will turn into a 1.5 per cent NSR royalty. The other partner can buy back 1 per cent of that royalty for $3.5 million.

FPX Nickel is focused on the exploration and development of the Decar Nickel District, located in central British Columbia.


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