A full feasibility study on the Nico gold-cobalt-bismuth deposit in the Northwest Territories has shown favourable economics, so owner Fortune Minerals (FT-T) is planning production in 2010.
The study, by Micon International and Met-Chem Canada, estimated a mine producing 24,000 oz. gold and about 1,500 tonnes each of cobalt and bismuth would have a capital cost of $215 million. Cash production costs (treating gold and bismuth as by-products) would average US$7.05 per lb. of cobalt.
Nico, about 160 km northwest of Yellowknife near the Snare River hydroelectric project, would be mined as an open pit and from underground via a ramp, already partly driven to allow bulk sampling. The study puts the deposit’s proven and probable reserves at 20.6 million tonnes grading 0.85 gram gold, 0.16% bismuth and 0.13% cobalt in the proposed open pit, plus 1.2 million tonnes, grading 5.1 grams gold, 0.19% bismuth and 0.14% cobalt, in the underground mine plan.
The project would require an all-weather road but Fortune has bought the mill from the closed Golden Giant gold mine in north-central Ontario.
The operation would mill 4,000 tonnes per day producing a sulphide concentrate that would be separated into bismuth and cobalt concentrates. The bismuth concentrate would be fed to a cyanide-leach circuit to extract the gold before drying and shipping, while the cobalt concentrate would be pressure-leached to produce cobalt in solution for electrowinning. Cobalt process tailings would also be fed to the gold plant.
At the planned production rate the operation has a life of 15 years.
The study assumed base prices for the metals equal to the average price for the past two years: US$525 per oz. for gold, US$16.50 per lb. for cobalt and US$4.50 per lb. for bismuth. It also assumed a Canadian dollar at US84.
Discounted cash flow analyses put the net present value of the project at $91.8 million, based on an 8% discount rate. The internal rate of return was just over 15%.
Fortune has a bulk sample awaiting transportation over the winter road to the Territorial highway system; it will be used for pilot-plant testing. Another bulk sample is planned for 2007, and Fortune has started work toward an environmental assessment and permitting.
Be the first to comment on "Nico feasibility positive"