Blending of reserves boosts value of McCreedy East mine

Canadian ore reserves quoted by Inco (TSE) for the year ending 1991 are 401 million short tons grading 1.44% nickel and 0.85% copper. Not high grade by any measure. Technical and organizational improvements have the effect of increasing the grade and if these two agencies are introduced to an orebody that is higher in grade than the average ore reserve, then the company has the best of both worlds.

This is precisely what is happening at the new McCreedy East mine located 10 km northeast of Levack, Ont., on Sudbury’s north rim. Here, two new shafts were being sunk to develop a 25.5 million ton orebody grading 1.74% nickel and 0.76% copper. Contractor Thyssen-Aurora had sunk one of the shafts to 4,094 ft. of its planned 4,632 ft. depth while MacIsaac had sunk the other to 582 ft. of 3,800 ft. when work on both was suspended in September, 1991. Suspension was part of Inco’s 10% cutback in production and capital projects, but these two shafts were also a special case.

Some months earlier, another orebody had been delineated about 3,000 ft. west of the McCreedy mine. Proven and probable reserves of the new discovery amount to 5.9 million tons grading 0.63% nickel and a remarkable 8.83% copper. There could also be another two million tons of mineralization in the vicinity though its grade is not known.

Blending the reserves of the two orebodies brings the total ore available to McCreedy East to 31.4 million tons grading 1.53% nickel, 2.28% copper plus important values in gold and the platinum group metals. This is a major boost to what Inco had described before the new discovery as its largest undeveloped orebody.

The reserve is not only large but the gross variation in metal content will allow the company the flexibility to selectively mine high nickel or high copper according to the metal which produces the higher revenue as metal prices fluctuate.

Mine development plans have not been announced. Revision of the original engineering and production studies was started in 1991 because of the higher-than-anticipated costs of development. New plans must also incorporate the new orebody.

The only estimate relating to when this mine will come into production is contained in Inco’s annual report for 1991 “. . . the new McCreedy orebody is expected to enter production in about three years, depending on market conditions, in conjunction with the development of the McCreedy East Mine . . .”

The signal that a final decision has been made will be the resumption of work at one or both of the partly completed shafts where work was suspended in September, 1991.