By Steven Ralston, CFA



By Steven Ralston, CFA



Blackstone Minerals (OTC:BLSTF) (ASX:BSX) is advancing the Ta Khoa Project in northern Vietnam. During the last three months, Blackstone Minerals has made significant progress on several facets of advancing both the upstream and downstream components of this nickel project. The upstream component consists of developing a series of nickel-sulfide deposits within a 12-kilometer district-scale exploration corridor while the downstream project involves the design and construction of a refinery designed to produce higher-margin NCM (Nickel-Cobalt-Manganese) products for the lithium-ion battery industry.

Synopsis of Recent Events

Development of Sources of Feedstock for Planned Ta Khoa Refinery

o Infill drilling programs at Ban Chang and King Snake prospects

o Collaboration with Vietnamese Government to advance Chim Van prospect

o Equity investment in Flying Nickel, the holder of 100% of Minago (a large undeveloped disseminated nickel sulfide deposit located in Manitoba, Canada)

Progress on DFS for Ta Khoa Refinery

o Contracts awarded for plant design (Wood) and Phase 1 of the Pilot Plant Project (ALS Metallurgy Services)


o  A Private Placement and Share Purchase Plan provides gross proceeds of over AUD$60 million to help fund management’s initiatives through the issuance of 103,965,375 shares in financings that are accretive to book value

Inaugural ESG Report Published

Upstream Project Update

Blackstone Minerals continues to drill and define resources at three advanced MSV prospects: Ban Phuc, King Snake and Ban Chang. The company is utilizing eight drill rigs to perform the drilling programs.

Ban Chang

On September 9, 2021, Blackstone Minerals provided an update on infill drilling at Ban Chang, the company’s most advanced MSV underground target. The Ban Chang deposit is hosted by a tremolitic dyke swarm and currently consists of two zones of mineralization designated as Ban Chang West and Ban Chang East. The highlighted drill hole was BC21-66 in which two zones of massive sulfide nickel were intersected over a total of 5.35 meters which graded between 80% and 95% sulfide. The strike length of the known mineralized dyke swarm is approximately 900 meters with a width varying between 5 and 60 meters.

After the completion of the infill drilling and the ensuing examination of assay results, management anticipates that the completion of a maiden resource estimation for Ban Chang (both East & West) will occur in 4Q 2021. Ban Chang is a potential ore source for the existing 450ktpa concentrator and/or the proposed larger concentrator.

King Snake

On September 16, 2021, the company reported that an infill drilling program commenced at King Snake during the first quarter of fiscal 2022 (July – September 2021). A ground-based EM survey guided the down plunge drilling program, targeting an area to the west of historic drilling results. Downhole electromagnetic (DHEM) surveys are being conducted in order to guide future infill drilling.

The highlighted drill hole was KS21- 34, which intersected a total of 8.49 meters of sulfides (1.92m MSV, 3.17m SMSV and 3.40m NTS). Assay results are pending. Previously, the longest continuous interval was with drill hole KS20-02 with 5.88 meters grading at 1.22% Ni and 0.49% Cu. Other significant results are listed in the table below.

Downstream Project Update

Equity Investment in Flying Nickel to Help Secure Refinery Feedstock

Part of Blackstone’s development strategy for the Ta Khoa Refinery is to using third party feed to supplement the nickel concentrate supply expected from the upstream Ta Khoa Project, including feed from the Ban Phuc, King Snake and Ban Chang mines. The company has already announced an arrangement with Trafigura Pte Ltd, which was signed in January 2021. Another source of supply is being pursued from Flying Nickel.

On November 22, 2021, Blackstone Minerals announced that the company is making a strategic equity investment through a private placement in Flying Nickel, a wholly owned subsidiary of Silver Elephant Mining Corp. (TSX:ELEF, OTCQX SILEF)). Flying Nickel holds 100% of the Minago Nickel Sulfide Project, an advanced stage, district-scale, undeveloped, disseminated nickel sulfide deposit located in Manitoba, Canada.

Blackstone’s CAD$2.975 million equity investment in Flying Nickel through this private placement consists of 4,250,000 Units, each consisting of one common share and one-half of one common share purchase warrant of Flying Nickel. Each whole warrant is exercisable into one common share at a price of CAD$1.00 on or before November 29, 2023. Blackstone’s 4,250,000 shareholding represents a 6.85% interest in Flying Nickel. The exercise of the warrants at a cost of $2.125 million would result in a 9.5% equity ownership of Flying Nickel. An anti-dilutionary clause allows Blackstone to maintain its equity interest at the same level going forward.

Blackstone’s investment in Flying Nickel is subject to Silver Elephant shareholder approval and contingent on Flying Nickel successfully listing on the TSX-V within 120 days. Silver Elephant Mining intends to spin out Flying Nickel as soon as possible after the shareholders’ meeting on December 22nd and list it on the TSX Ventures Exchange as early as practically possible, most likely in early 2022.

The recent NI 43-101 mineral resource estimate was prepared and filed on SEDAR with an effective date of July 2, 2021. The Measured & Indicated Resource on two zones of nickel mineralization is estimated to be 721.6 Mlbs Ni (44.23Mt @0.74% Ni) and an Inferred Resource of 318.9 Mlbs Ni (19.55Mt @0.74% Ni).

Furthermore, Blackstone Minerals and Flying Nickel entered into a Memorandum of Understanding for opportunities to collaborate on the development of Minago, including a potential off-take agreement for feed supply to the Ta Khoa Refinery, possible joint ventures and/or future financing arrangements. A Steering Committee will be formed to structure these prospective collaborations.

In 2008, Lakefield Research (now SGS Lakefield Research Limited performed laboratory-scale metallurgical test work program with a SAG mill and flotation circuits. The metallurgical projection indicated that nickel concentrate grading at 22.27% would be produced using these conventional methods. Overall nickel recovery was estimated to be 52.3% with sulphidic nickel recovery being 77.2%. This historical projection does not qualify for use in a current Feasibility Study.

In line with Blackstone’s commitment to ESG practices, the Minago Project has access to renewable hydro-power and could potentially generate one of the world’s lowest CO2 emissions per pound nickel produced.

Blackstone’s equity investment in Flying Nickel intensifies Blackstone’s exposure to the nickel industry and the dynamics of commercializing a nickel production project. First, the market value of the Flying Nickel equity investment will fluctuate with the changes in the price of nickel and the fundamentals of Flying Nickel. Second, during the period of Flying Nickel’s mine development, most likely, it will be necessary for Blackstone Minerals to make additional cash investments in order to maintain its percentage of equity ownership. Third, since Blackstone’s management expects the Ta Khoa Refinery to come on-line in 2024 and Flying Nickel’s management has a timeline which projects that the first shipment of nickel concentrate will occur in 2026, Flying Nickel will be able to start contributing nickel concentrate feed two years after commercial operations at the refinery commences.

Contracts Awarded for DFS & Pilot Plant for Advancement of Ta Khoa Refinery

On October 19, 2021, Blackstone Minerals announced the appointment of Wood (a leading E&C firm) and ALS Metallurgy Services to perform critical consulting roles in delivery of Definitive Feasibility Study and Pilot Plant test work for the Ta Khoa Refinery Project.

Wood is responsible for project management of the plant design for the Ta Khoa Refinery, including project controls, engineering, auxiliary services, cost estimating and utilities, along with execution planning services. Importantly, Wood has a specialized hydrometallurgical group with extensive experience in pressure oxidation (POX) projects and has offices in Vietnam.

ALS Metallurgy Services is responsible for performing the test work in Phase 1 of the Pilot Plant Project. ALS Metallurgy will verify the process flow sheet from the PFS, conduct bench-scale confirmatory test work and perform a hydrometallurgical test work, all of which will help generate the engineering specifications for the refinery’s design. Phase 1 includes the development of a design that will process nickel concentrate feed at a rate of 20kg per hour in order to produce NCM products at approximately 1.75kg per hour.

Utilizing its facilities with state-of-the-art laboratories and equipment in Perth Western Australia, ALS Metallurgy Services will deliver a continuous pilot plant that produces a MHP intermediate product from blended concentrate (during Campaign 1), and deliver a continuous pilot plant that produces battery-grade NCM811 from MHP intermediate product(, in Campaign 2). Blackstone will provide concentrate samples for the two campaigns from both the Ban Phuc mine and third parties.

Chim Van Prospect – Joint Exploration with Vietnam Government

On October 5, 2021, Blackstone Minerals announced a collaboration with the General Department of Geology & Minerals of Vietnam (GDGMV) to identify new nickel opportunities in Northern Vietnam. The first project is the joint geophysics exploration of Chim Van, a highly prospective large magnetic anomaly, which is located approximately 10 kilometers NW of the Ban Phuc open pit deposit. Historical sampling has indicated the presence of Ni and Cu with portable XRF testing of gossan samples reporting up to 1.13% Ni and 0.37% Cu.

Blackstone will provide technical expertise and equipment to support geophysical work. If results indicate the presence of a Ni-Cu mineralized ultramafic-mafic intrusion, Blackstone, through Ban Phuc Nickel Mines, plans to apply for an exploration license on the project. The Chim Van target could potentially provide feedstock to Blackstone’s the company’s planned large concentrator and the Ta Khoa downstream refinery.

ESG (Environmental, Social and Governance) Report

On November 8, 2021, Blackstone Minerals issued the company’s inaugural sustainability report detailing the company’s past and future ESG efforts. The 87-page report identifies the company’s commitment to high environmental responsibilities & standards, employee diversity & inclusion profile, community engagement & employment initiatives, sustainability obligations through implementing a Green Nickel business strategy, focus on helping attain net zero emissions, corporate transparency and other best practice ESG considerations.

The report can be found at

On October 21, 2021 Blackstone announced a collaborative partnership with Circulor Ltd in order to establish a full traceability system for the Ta Khoa nickel operations from mining to EV end-users. The system is anticipated to increase awareness about Blackstone’s ESG initiatives using sustainability metrics such as CO2 intensity, biodiversity impact, water use and energy mix. With this level of transparency, Blackstone should benefit from a competitive advantage where downstream customers increasingly prefer ethically- and responsibility-sourced nickel, even when premium-priced.

Jewel Cu-Ag-Co Project (British Columbia)

Though Blackstone remains focused on developing an upstream and downstream NCM battery metals operations at Ta Khoa in Vietnam, the company continues to advance the Cu-Ag-Co Jewel prospect located in British Columbia. Situated within the Gold Bridge Project, which Blackstone acquired in October 2017, the Jewel prospect has a similar geological hosting setting (contact zones between granodiorite and serpentinite) to the underground mines in the Bou-Azzer Cobalt district in Morocco. After completing exploration programs (geochemical & geophysical surveys followed up by drilling), Blackstone initiated a drilling program in November 2021 in order to test targets where soil anomalies coincide with significant Induced Polarization (IP) anomalies, which traditionally indicates a sulfide bearing body.

On November 30, 2021, Blackstone announced that the first drill hole (JWD21-01) of the exploratory drilling program intersected sulfide mineralization confirmed to contain copper, nickel and cobalt with a portable XRF spectrometer. The sulfide mineralization further indicates the prospectivity of the Jewel 700-meter IP anomaly. Management anticipates receiving the assay results in early 2022.


On November 1, 2021, Blackstone Minerals announced firm commitments for a Private Placement of 94,827,587 fully paid ordinary shares (at an issue price of AUD$0.58 per share) had been received. With the shares being issued at a price well above book value, the private placement is accretive to book value, benefiting both existing shareholders as well providing management with significant funds to invest in the development of the Ta Khoa Project. The shares are being issued in two tranches.

The first tranche consisted of 38,134,805 shares, which were issued around November 10th. Gross proceeds were AUD$22,118,187. The second tranche of 56,692,782 shares is subject to shareholder approval at a shareholder meeting to be held in mid-December. When approved, the second tranche should provide gross proceeds of AUD$32,881,814. The lead investment managers are Shaw & Partners Limited, Evolution Capital Partners LLC and PAC Partners.

In addition, the company offered certain eligible existing shareholders the opportunity to participate in a Share Purchase Plan (SPP) of 8,620,690 shares at the same price. The oversubscribed SPP closed on November 19th with 9,137,788 shares being issued on November 26th. The gross proceeds were AUD$5,299,917 from the SPP.

On August 26, 2021, Blackstone Minerals announced that The Korea Development Bank and BurnVoir Corporate Finance will aid Blackstone in securing funding for the development of both the upstream and downstream portions of the Ta Khoa Project.


The P/B valuation range for comparable, well-funded junior nickel development companies is between 2.24 and 13.34. Utilizing comparable analysis, the target price for Blackstone Minerals (BLSTF) is $1.29 per share, which is based on an industry average price-to-book multiple.

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