Positive metallurgical results for First Point’s Decar

Vancouver – Concept is slowly becoming reality at First Point Minerals’ (FPX-V) unusual nickel project in central British Columbia, with encouraging metallurgical results the latest boost.

Metallurgical testing shows that the company could produce a concentrate grading 2.6% nickel from the project, which First Point’s president and CEO Peter Bradshaw hailed as a very important milestone.

For most sulphide- or laterite-based nickel projects a 2.6% nickel grade would hardly be groundbreaking, but for First Point’s Decar project it is, since it’s neither of those types of deposit.

Instead, Decar hosts a significant amount of nickel in a widely disseminated nickel-iron alloy called awaruite that is void of sulphides and highly magnetic. The company refers to it as naturally-occurring stainless steel. The result is that the company could theoretically produce concentrate through simple grinding and magnetic separation and skip the smelter altogether. The recent testing is a big step in proving it is physically and economically possible to produce on a large scale.

The testing used a one-tonne composite sample from nine drill holes with a grade of 0.14% nickel in the form of an alloy, and 0.22% nickel overall. The resulting concentrate contained the 2.6% nickel grade as well as 52% iron as magnetite and 2.2% chromite with an 80% recovery of the alloy, while testing also showed that nickel grades of 4% could be achieved with ‘minor loss in nickel recovery’.

For First Point, the test results are another step in a long process to proving Decar could work.

Ron Britten, First Point’s vp of exploration, explained in a recent meeting with The Miner that the company first came across the project as far back as 1997, and he was intrigued by the parallels the nickel project showed to copper porphyry deposits. The company thought Decar could be developed as a bulk-tonnage target, but the fine-grained mineralization was difficult to see and there wasn’t a way to tell how much of the total nickel occurred in the alloy.

“The thought made sense, but you couldn’t see anything and you couldn’t quantify it at that time,” said Britten. With nickel selling at around US$3.50 per lb., the company decided to drop the project, and wouldn’t come back to it for a decade.

When nickel prices were rising quickly in 2007 the company decided to look back into Decar and spent the next year or two developing ways to recognize the material and to quantify it using a selective extraction method.

Once they had the basic techniques and tools established, they started shopping around for a partner. That proved difficult as most had never heard of the material, were wary of the 0.1-0.2% nickel-in-alloy grades the company was hitting, and saw it more as a research project.

“There was a lot of interest at the geological level, geologists were intrigued by the whole concept,” said Britten, “but to move it forward in the higher echelons of their companies was very difficult.”

The company eventually found a welcome partner with Cliffs Natural Resources (CLF-N) in late 2009, which signed a deal to earn 51% by spending US$4.5 million on the property over four years and 75% by completing a feasibility study.

Britten said Cliffs was an excellent match as it already had extensive experience working with mechanical processing and magnetic separation, it wanted large-scale projects and it wanted to get into nickel. The deal was also good for First Point.

“When Cliffs came on board the market really started to pay attention to the whole story” said Britten. “They liked the story, but they wanted some confirmation, and that’s where Cliffs coming on board gives it more credibility.”

Cliffs has since spent about US$2 million on exploration and development and plans to conduct at least 4,000 metres of drilling on the project this year.

Commenting in a recent investor presentation, Cliffs’ senior vp of global business development Clifford Smith highlighted that the Decar project does not have the problems associated with high pressure acid leach systems used elsewhere in the world and that it is becoming apparent that the company could produce ferronickel in a concentrate.

“The Decar project is something that we’re very excited about,” said Smith. “It’s going to be our first major discovery as we move forward.”

For Britten, the development of measuring tools, the deal with Cliffs and the metallurgical testing are all part of the long process of developing a new type of deposit that sounds interesting but still has to be proven.

“When you list all the characteristics of the mineralogy, the target type and so on, its doable, probably, we’ve just got to prove it. And that’s where we’re at right now.”

First Point’s share price closed up 6¢ at 99¢ the day after the latest news. The company has a 52-week share price range between 42¢ and $1.06 and 90.4 million shares outstanding.