Partners
The resource represents almost 70% of the tonnage required to meet the company’s target for a viable mining operation. Nuinsco wants to outline at least 800,000 tonnes of ramp-accessible material grading between 1.6 and 2% nickel above the 250-metre level. Such a resource could be viable at a nickel price as low as US$3 per lb. At presstime, nickel was trading at US$4.75 per lb. The deposit is within 40 km of Inco’s nickel-processing facilities at Thompson.
Inco pegs Mel’s indicated resource at 290,000 tonnes averaging 1.69% nickel, with an inferred resource of 260,000 tonnes at the same grade, to a depth of 230 metres. The estimate is based on 3,097 metres sunk in 22 holes earlier this year and some widely spaced holes from the 1960s. The estimate used a cutoff grade of 1.25% nickel, a minimum mining width of 3.7 metres and a crown pillar of 23 metres. Drilling is planned for next winter, to augment the resource to the north and at depth.
Previous work on Mel outlined an inferred resource of 7 million tonnes grading 1.25% nickel to a depth of 600 metres, including 620,000 tonnes of ramp-accessible material averaging 1.8% nickel. The best intersection from shallow drilling returned 2 metres grading 2.43% nickel.
Nuinsco can earn a 100% interest in the property by spending $6 million over five years. Once Nuinsco has earned 100%, Inco can re-acquire 51% by spending $6 million on exploration over the next four years. Should Inco decide not to participate in the project, it will nonetheless provide technical support to Nuinsco and arrange financing. Nuinsco has the right to operate any mine developed on the property.
The property includes the Mel deposit and an adjacent 217-sq.-km land parcel.
To date, Nuinsco has spent less than $450,000 on the lease. The company must spend at least $1.2 million by Aug. 31, 2004, before submitting a development plan for the Mel deposit.
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