PERTH (miningweekly.com) – The share price of ASX-listed IMX Resources dropped by more than 30% on Wednesday after joint venture (JV) partner MMG Exploration failed to triple the resource estimate at the Ntaka Hill nickel sulphide project, in Tanzania.

IMX has told shareholders that MMG’s exploration programme over the past year had been focused on identifying a substantive high-grade mineral resource of sufficient materiality for development.

As part of its $10-million spend to earn an initial 15% interest in the Nachingwea property, which hosts the Ntaka Hill project, MMG completed around 8 000 m of a planned 14 775 m diamond drill programme. While this drilling intersected several boreholes, for which analysis were awaited, it failed to identify the required style or scale of mineralisation and MMG did not undertake follow-up drilling.

IMX said that owing to the higher-than-anticipated reverse circulation drilling costs, additional surface works and equipment-related issues, only 1 121 m of the planned regional drilling programme had been completed to date.

MMG was now approaching its $10-million exploration mark, and would not undertake any additional drilling.

IMX MD Gary Sutherland said that the drilling results for Stage 1 would now be interpreted and would be placed into context.

While MMG had some 30 days in which to complete its $10-million Stage 1 expenditure, Sutherland said that it was unlikely that the Chinese firm would proceed with Stage 2 of the joint venture, under which MMG could have earned a 60% interest in the Nachingwea property by spending $60-million over a five-year period.

“MMG’s exploration programme was premised on targeting massive nickel sulphide mineralisation that would meet its criteria for a potential tier-one deposit,” Sutherland said.

“MMG’s goal was to triple the current resource and double the grade, establishing a world-class nickel project that would fit their global resource portfolio. While MMG was unable to achieve this goal, Ntaka Hill remains a valuable nickel project with numerous untested targets and longer-term potential.”

Sutherland said that IMX’s immediate focus would now be on completing a review of the Nachingwea property, with the company appointing a nickel sulphide expert to undertake a review of the data received from the MMG drilling.

“The company is of the view that there remains potential at Ntaka Hill, and within the broader Nachingwea property, to significantly expand the current mineral resource inventory. This strategy will include testing a number of structural targets that may host structurally remobilised bodies of mineralisation,” Sutherland said.

The current measured and indicated resource at Ntaka Hill stands at 20.3-million tonnes, 0.58% nickel and 0.13% copper for 117 880 t of contained nickel, as well as an inferred resource of 35.9-million tonnes at 0.66% nickel and 0.14% copper for 238 500 t of contained nickel.

IMX shares were trading at a low of 1.9c a share on Wednesday, down from an opening price of 3.4c a share.