Upgrade for Nornico nickel resource

An upgraded resource of 34.8 million tones at 0.71% Ni containing 247,800 insitu ....

  An upgraded resource of 34.8 million tones at 0.71% Ni containing 247,800 insitu tones of nickel metal has been estimated at the Metallic a Minerals’ flagship NORNICO nickel project in North Queensland. This represents an 11.6% increase in contained nickel and will form part of the Funding Feasibility Study into development of the project. This study is due for completion in early 2008 and will be based on a 1.5 million tonne per year heap leach operation producing approximately 10,000 tonnes of nickel per annum.The updated resource estimate includes data from an additional 369 holes comprising 7,764m, which were completed at Bell Creek earlier this year. The total database (including drilling from Minnamoolka) now comprises in excess of 1,000 holes, with over 19,000m drilled. The Bell Creek Resource now stands at 20.7 Mt at 0.74% Ni and 0.04% Co using a 0.45% Ni cut-off grade containing approximately 153,000 tones of nickel insitu. This includes a Measured Resource of 8.25 Mt at 0.85% Ni, an Indicated Resource of 11.25 Mt at 0.66% Ni and an Inferred Resource of 1.2 Mt at 0.7% Ni. In addition, the global NORNICO Resource includes 14.1 Mt at 0.7% Ni from Minnamoolka. The Bell Creek South drilling was primarily aimed at upgrading the resource categories from Inferred and Indicated to a predominantly Measured Resource. Currently 83% of the Bell Creek South resource is classified as Measured with drilling adding an additional 800,000 tonnes to that resource.Metallica’s Managing Director, Andrew Gillies said, “Using a conservative long term nickel price of US$7.50/lb (current price around US12.50/lb), the insitu metal value of the resource is around $5 billion (or $8.5 billion using current prices). Importantly, the deposits are shallow with the maximum depth to the base of mineralisation being 50m below surface, and the majority of the resources are within 20m of the surface. “Metallurgical testwork to date has shown the resource to be highly amenable to atmospheric acid leaching and we expect to average at least 75% nickel extraction within a 6 to 9 month leach cycle, using the relatively low cost heap leach treatment process.“The low iron content of the laterite is important as it indicates relatively moderate quantities of acid will be consumed in the heap leach process and results in less iron contamination in the nickel pregnant leach solutions.“Within these resources there is excellent scope to provide higher nickel grades in the early years of operation (via target mining of the high grade material and/or by beneficiation) to maximise margins early and enhance the project’s economics.”Importantly the resource categories at all three Bell Creek nickel laterite deposits have been elevated from Indicated and Inferred Resources to primarily Measured and Indicated Resources, suitable to commence the mining and Feasibility Study.