AOU finds new drill target - so good they decide to drill it immediately

We invested in Auroch Minerals (ASX: AOU) for exposure to a large nickel discovery.

AOU is currently exploring for nickel underneath and around a historically producing nickel mine. We invested in AOU at 20c.

🚨 Today AOU announced it has uncovered a very high priority drill target that it intends to drill test immediately.

This decision to instantly drill this new target was based on the target’s size, strength and location.

We chose to invest in AOU after it acquired an 80% stake in a historical WA nickel mine, and it’s currently drilling to expand its nickel resource next to and below the existing nickel.

AOU’s historic nickel mine was one of the highest grade nickel mines in Australia.

The nickel mine stopped producing back in 1987 when the nickel price dropped to below US$4,000/tonne - this is not the case now.

Nickel is currently trading at around US$18,500 per tonne, almost doubling since March 2020.

AOU is currently drilling AROUND the historical mine and the next phase is to drill UNDER it, which is the exciting part for us...

BUT.. today AOU found a new drill target that they felt was so good they have decided to drill it immediately.

Today's News: Why we think AOU wants to drill new target asap

Here is why this newly identified target looks very promising to us:

• All the right ingredients for massive nickel sulphides.
• Highly conductive - typical of well developed massive to semi-massive nickel sulphide mineralisation.
• 120m wide.
• Shallow - only ~ 60m below surface.
• 1.8km south of high grade Nepean nickel mine - to us it looks close enough to be related to Nepean and far enough away to be an independent new vein / mine if it is in fact nickel sulphide.

AOU is going to immediately drill test this target, and will be poking three RC drill holes ranging between 150-250m in depth in the coming days.

This drilling will lead into the Nepean Deeps drill programme, which is scheduled to begin later this month - this is a major catalyst for AOU.

AOU is also currently awaiting results for the recent RC programme at its Leinster Nickel Project.

So - plenty of newsflow coming for AOU in the coming weeks.

Here is why we like AOU:

• WA nickel could be highly sought after if BHP and Tesla are seeking nickel in the state.
• Nickel is going to play a key part in EV batteries for the coming decades - we are bullish on the long term nickel price.
• AOU is aiming to unlock a much larger nickel resource below/along strike to an old nickel mine. This has happened before in WA – Western Areas is the case study here, and shareholders were hugely rewarded.
• AOU continues to deliver impressive drill results, confirming thick, high grade nickel at shallow depths at its historical nickel mine.
• AOU has a number of options that exercise at 10c that have been converting into shares over recent months. This is good in that it brings funds into the company without having to tap the broader market, however it is worth noting that this can also soften upward momentum in the share price.
• End of Financial year tax loss selling pressure has been lifted
• AOU is aiming to build over 100kt of nickel resources, and has multiple nickel exploration projects - we like the scale of the company’s goal.

What to expect next

• Drilling of new high priority target: RC drilling to start later this week
• Assay and DHEM results from regional RC drilling campaign: Coming weeks
• Nepean Deeps drill programme: Scheduled to begin later this month.
• Results for the recent RC programme: Results from the Leinster Nickel Project are likely imminent.