Falco buys share in Barrick’s Kabanga

An agreement with Barrick Gold (ABX-T) gives Falconbridge (FL-T) a half-interest in the Kabanga nickel deposit in northwestern Tanzania, a property Barrick inherited in its takeover of Sutton Resources.

Falco pays US$15 million for its share, and undertakes a US$50-million work commitment to bring the project to the feasibility stage. If the company 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. The copper grade is low. The sulphide deposit consists of two lens-like bodies — the larger Main and smaller Kabanga North zones — hosted in a mafic-to-ultramafic intrusion.

Tentative plans call for a 2- million-tonne-per-year operation capable of producing 30,000-35,000 tonnes nickel-in-concentrate annually.

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

Barrick took over Sutton in 1999 to acquire the Bulyanhulu gold project, which is now in production. Kabanga is about 40 km south of Ngara, near the border with Burundi, and about 240 km west of the main regional centre of Mwanza.