Hard Creek grows Turnagain again

Vancouver – The Turnagain nickel deposit has grown again for owner Hard Creek Nickel (HCN-T).

The Turnagain project has seen sporadic exploration work since the mid-1960s. Hard Creek has been hard at work in the area since 2003. Now the company’s drilling effort in 2008 has been rewarded: a new estimate has added another 14 million tonnes contained nickel to the defined resource.

Turnagain is now home to 695 million tonnes grading 0.174% nickel in sulphide minerals or 0.216% total nickel, as well as 0.014% cobalt, in the measured and indicated categories. Inferred resources add 511 million tonnes averaging 0.173% nickel in sulphide or 0.199% total nickel and 0.014% cobalt.

The two categories combined host 2.52 million tonnes of nickel. The last resource estimate for Turnagain, completed eleven months ago, defined 2.37 million tonnes contained nickel.

In 2008 Hard Creek focused its work at Turnagain on two goals: increasing the confidence in its resource through infill drilling and exploring the potential of the Cliff zone to add a platinum-palladium component to the mine development plan. The company spent $4.5 million at Turnagain in 2008; work also included metallurgical studies, environmental consulting, and First Nations discussions. The deposit remains open to the northeast and Hard Creek is confident that step-out drilling could easily add several more years of mine life to the project, but the company decided to save that work for another year.

The First Nations discussions resulted in a tangible advance: in October Hard Creek signed a cornerstone agreement with the Kaska Dena designed as the foundation of a respectful, co-operative, progressive relationship to facilitate the development of Turnagain. The agreement contained commitments from both Hard Creek and the Kaska Dena toward environmental protection, economic opportunities and benefits, and education and training; the commitments will form the basis of a socio-economic agreement for the development of a nickel mine.

Turnagain sits 70 km east of Dease Lake in northern British Columbia. A preliminary economic assessment from late 2007 found an mine and mill at Turnagain churning through 50,000 tonnes of ore daily could operate economically for 29 years. With 18 million tonnes annual throughput, a mine at Turnagain could produce 20,397 tonnes of nickel in concentrate and 1,301 tonnes of cobalt in concentrate each year. With a strip ratio of just 0.44 to 1, operating costs came in at just $9.43 per tonne milled. Capital costs were estimated at $1.3 billion.

The kicker at Turnagain is power. The project is in northern B.C., beyond the reach o power lines providing affordable hydroelectric power. But the province, which had planned to build a northern power line and then reneged, has again committed to the project. In September the provincial government started the environmental assessment and First Nations consultations processes to build what is known as the Northwest Transmission Line, along highway 37.

The 287-kV line will extend 335 km from Terrace to Meziadin Junciton and north to Bob Quinn Lake. The province is investing the initial $10 million to complete the assessment processes but is searching for a partner to help fund the development cost, which is estimated at $400 million. If built, it would help the economics of a mine at Turnagain tremendously.

According to the company’s year-end financials, Hard Creek has over $4 million in cash and equivalents. News of the new resource estimate left its share price unchanged at 17c. The company has a 52-week trading range of 8c to 73c and has 60.4 million shares outstanding, 67 million fully diluted.