Falconbridge buys share in Kabanga

A deal between Barrick Gold (ABX-T) and Falconbridge (FL-T) will give Falconbridge a half interest in the Kabanga nickel deposit in northwestern Tanzania, a property Barrick inherited in its takeover of Sutton Resources.

Falconbridge pays US$15 million for its share, and undertakes a US$50-million work commitment to bring the project to the feasibility stage. If Falconbridge then wants to bring the project to production, it will fund the first US$95 million worth of development.

Barrick’s latest inferred resource estimate on Kabanga is 26.4 million tonnes at a grade of 2.6% nickel. Mining scenarios drawn up so far look at a 2-million-tonne-per-year operation, producing between 30,000 and 35,000 tonnes nickel in concentrate annually.

Falconbridge would take a minimum of half the concentrate from a mine at Kabanga.

Barrick took over Sutton in 1999 to acquire the Bulyanhulu and Tulawaka gold projects, both of which are now in production. Kabanga is about 40 km south of Ngara, near the border with Burundi.

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