BLSTF: Blackstone Minerals Recent Progress on the Ta Khoa Project: drilling program update, advances in the piloting program, appointment of engineering firm for DFS, exploratory drilling at Chim Van, ESG update

By Steven Ralston, CFA

OTC:BLSTF | ASX:BSX

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Blackstone Minerals BLSTF BSX is pursuing the development of the district-scale Ta Khoa Nickel Project through a vertically integrated strategy which entails an upstream project (Ta Khoa Nickel Project aka TKNP) and a downstream project (Ta Khoa Refinery Project aka TKR), along with arrangements to secure further upstream supply for the refinery and to develop a distribution/sales network for the refinery's projected NCM Precursor products.

Over the last few months, Blackstone Minerals has been advancing the Ta Khoa Project on several fronts.

• Management provided a drilling program update on the infill drilling at Ban Chang and King Snake, which should contribute to upgrading the Maiden Inferred Mineral Resource released in December 2021 at these two Massive Sulfide Vein prospects. At the Suoi Phang and Suoi Chanh prospects, exploration drilling based on targets generated from surface EM surveying intersected sulfide.

• Management also provided an update on the progress on the piloting program, which included mining ore from the Ban Phuc mine, restarting the nickel concentrator at Ban Phuc and shipping the nickel feedstock to ALS Metallurgical Lab for the first campaign of the piloting program.

• In May, further progress toward the completion of a DFS on Ta Khoa Nickel Upstream Project was made with the appointment of GR Engineering Services.

• In pursuit of additional sources of feedstock for the Ta Khoa Refinery, drilling is to commence at the Chim Van target, through collaborative effort with the General Department of Geology & Minerals of Vietnam (GDGMV).

• Demonstrating the company's commitment to environmental and social principles, Blackstone Minerals signed a Memorandum of Understanding (MOU) with Son La Province for the purpose of encouraging a cooperative framework for the development of the Ta Khoa Project (both upstream and downstream components).

• Lastly, the inaugural Digbee ESG assessment on the Ta Khoa Project was completed with an overall score of BB.

Update on Ta Khoa Drilling Program

On June 2, 2022, Blackstone Minerals provided an update on the Ta Khoa drilling program. At the company's most advanced Massive Sulfide Vein (MSV) deposits, Ban Chang and King Snake, infill drilling is focusing on upgrading the current resources at both deposits. In addition, exploratory drill holes at Suoi Phang and Suoi Chanh have intersected sulfides.

Infill drilling at Ban Chang and King Snake

Blackstone continues to drill at Ban Chang and King Snake. At the Ban Chang prospect, the Massive Sulfide Vein mineralization consists of two west-east massive sulfide veins, roughly 580m apart, which dip steeply to the south. The current Maiden Inferred Mineral Resource for Ban Chang (0.70 Mt at 2.0% NiEq) was announced in December 2021 and is based data up to and including drill hole BC21-34 drilled in October 2021. Subsequent highlighted holes include:

BC21-66    9.6m @2.02% Ni, 1.92% Cu, 0.10% Co and 3.04g/t PGE

BC21-74    1.4m @0.66% Ni, 0.17% Cu, 0.04% Co and 0.27g/t PGE

BC21-72    10.3m @0.68% Ni, 0.60% Cu, 0.04% Co and 0.42g/t PGE

BC21-77.   25.5m @0.63% Ni, 0.43% Cu, 0.04% Co and 0.33g/t PGE

BC21-80    24.0m @0.40% Ni, 0.27% Cu, 0.02% Co and 0.18g/t PGE

At the King Snake prospect, the magmatic Massive Sulfide Vein mineralization consists of high grade brecciated Ni-Cu-Co-PGE minerals, likely formed from PGE-bearing magma. At King Snake, Blackstone is focused on downhole electromagnetic targets that are situated down plunge at depth and west of historic drilling. The current Maiden Inferred Mineral Resource for King Snake (0.43 Mt at 2.4% NiEq) is based data up to and including drill hole KS21-26 drilled in October 2021. Subsequent highlighted holes are included in the table below. Recent drilling still indicates that the mineralization continues to plunge at depth and west.

At the Suoi Phang prospect, an exploration program based on targets generated from surface EM surveying is being conducted. Drill hole SP22-01 intersected 2.95m of sulfide, which included Massive Sulfide Vein (MSV), Semi-Massive Sulfide Vein (SMSV) and Net-textured Sulfide (NTS) mineralization. Portable XRF readings indicated the presence of up to 20% Ni. Historical work at Suoi Phang has exposed massive sulfide in an adit, and historical trenching exposed two 100m+ gossans with assays up to 5.9% Ni.

At the Suoi Chanh prospect, an exploration program is also based on targets generated from surface EM surveying. Drill hole SC22-02 intersected a minor 0.1 m Semi-Massive Sulfide Vein (SMSV).

Update on Piloting Program

On April 6, 2022, Blackstone Minerals provided an update on the progress on the piloting program, which includes mining ore from the Ban Phuc mine, restarting the nickel concentrator at Ban Phuc and shipping the nickel feedstock to ALS Metallurgical Lab for the first campaign of the piloting program.

In early December 2021, Blackstone Minerals commenced underground mining at Ta Khoa after being granted approval to perform bulk sampling work (up to 1,000 meters of lateral development) related to pilot plant testing. Through March 29, 2022, 541 meters of lateral development had been completed through the middle of the Ban Phuc disseminated sulfide (DSS) ore body, which resulted in the delivery of 2,088t of disseminated sulfide (DSS) sample ore to the processing plant.

After refurbishing the existing 450ktpa Ban Phuc nickel concentrator, which had been on care and maintenance since September 2016, the concentrator was re-commissioned in January 2022. In addition, the crushing circuit became operational. The concentrator processed approximately 1,400t of 2,088t of disseminated sulfide (DSS) sample ore from the Ban Phuc mine.

Approximately 7.5t of sulfide flotation samples were then delivered to the ALS Metallurgical Laboratory in Western Australia. In addition, samples from Trafigura (10t) and other third-parties (6t) were delivered to ALS labs for the piloting program.

Initially in Campaign 1, ALS Metallurgy will 1) verify the process flow sheet from the PFS, 2) conduct bench-scale confirmatory test work and 3) perform a hydrometallurgical test work such that MHP intermediate product can be produced from blended concentrate in a continuous process.

Update on Progress Toward Completing DFS

On May 3, 2022, Blackstone Minerals appointed GR Engineering Services, a leading Australian process engineering consulting and contracting company, to lead the development of the Definitive Feasibility Study on Ta Khoa Nickel Upstream Project. GR Engineering Services has a successful record of delivering mining-related DFSs in Australia and the islands of the Pacific with over 50 projects detailed on its website. For Blackstone, GR Engineering is expected to engineer the infrastructure process flow, metallurgical test work and the plant tailings storage process.

Pursuing Additional Sources of Feedstock for the Ta Khoa Refinery - Chim Van Prospect

On April 13, 2022, Blackstone Minerals announced that approvals to commence drilling at the Chim Van target have been granted. A drill rig currently was being mobilized to the site to commence drilling the first priority drill hole into the center of the magnetic anomaly, which appears to be a concealed ultramafic target similar to the disseminated sulfide (DSS) deposit at Ban Phuc. If Ni-Cu-PGE sulfides are successful intersected, Blackstone is expected to begin the process of acquiring an exploration license.

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.

Collaboration with Local Government for the Development of the Ta Khoa Project

On April 14, 2022, Blackstone Minerals announced the signing of a Memorandum of Understanding (MOU) with Son La Province for the purpose of encouraging a cooperative framework for the development of the Ta Khoa Project (both upstream and downstream components). On the day before, the Son La Provincial People's Committee and the Australia's Ambassador to Vietnam visited the Ta Khoa mine site. All recognized the economic significance of Blackstone's project, along with the company's commitment to environmental and social principles to work respectfully and collaboratively with the people of Vietnam. Officials of the Son La Province indicated that they would help to facilitate the development of the Ta Khoa Project, including support to obtain exploration and mining permits.

Digbee ESG Assessment

On April 7, 2022, Blackstone Minerals announced the completion of the company's inaugural Digbee ESG assessment on the Ta Khoa Project. The independent assessment's overall score is BB. The assessment has become critical to certain investors and other stakeholders to understand the company's commitment to ESG and management's goal of becoming a Green Nickel producer.

The company is committed to transparent compliance and reporting of ESG (Environmental, Social and Governance), particularly in seeking to reduce emissions from operations, but also by engaging the community to develop in-country socio-economic progress.

Valuation

The P/B valuation range for comparable, well-funded junior nickel development companies is between 6.29 and 1.15. Utilizing comparable analysis, the target price for Blackstone Minerals is $0.67 per share, which is based on mid-first quartile P/B ratio.

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