Katoro Gold PLC (LON:KAT) is planning a drilling programme for the nickel sulphide reserves identified in the Haneti project, located in Tanzania.

The principle target zone is an 80 km long ultramafic belt with grades from surface sampling of up to 13.6% nickel and 2.33 g/t combined platinum and palladium.

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The main targets are Mihanza Hill and Mwaka Hill, where operations will start once further funding is secured.

Katoro has been working through past exploration data and has been encouraged by both the strength of the nickel price and also palladium.

Nickel is now trading at circa $17,600/tonne and palladium at $1,637/ounce.

The AIM-listed miner will also look for gold, as the polymetallic project contains a geological formation with proven potential.

Katoro said that further analysis and exploration drilling could also reveal nickel laterite and rare earths.

“I look forward to articulating our project strategies and operational plans in the coming weeks,” said executive chairman Louis Coetzee. 

“Within the boundaries of this 5,000 square kilometre project, Katoro have identified precious, base and strategic metal prospectivity and, in the opinion of the Katoro Board, Haneti is capable of delivering a number of discrete large-scale exploration and development opportunities.”

Shares were up 4.55% to 1.15p on Tuesday afternoon.