Cliffs options nickel alloy property from First Point

Vancouver – Finding common grounds as mining companies seeking simple solutions to metallurgical challenges, Cliffs Natural Resources (CLF-N) has signed on to earn an interest in First Point Minerals’ (FPX-V) Decar nickel alloy property in northern British Columbia.

Cliffs can earn a 51% interest in Decar by spending $4.5 million on exploration within four years, of which $1 million is a firm commitment in year one. First Point will continue to manage exploration activities at Decar during the earn-in. Cliffs is also investing almost $1 million in First Point by purchasing 10.2 million shares for 9.75¢ a piece. The placement will leave Cliffs holding 15% of First Point.

Cliffs is an international mining company with iron ore and coal operations in North and South America and Australia. The major has extensive experience with large-scale magnetic and gravity processing and runs a major metallurgical testing facility.

The Decar project is a good fit with Cliffs’ metallurgical expertise. Decar is a bulk-tonnage nickel target wherein nickel exists as a nickel-iron alloy. The average grade at Decar is only 0.2 to 0.2% nickel but the alloy alone is roughly 75% nickel and 25% iron, with minor cobalt and copper. The alloy contains no sulphur and is very magnetic and dense, all of which make it amenable to magnetic of gravity separation.

On the bench scale, First Point has already recovered the alloy from crushed and ground rock via using magnetic and gravity methods. If Decar does host a sizeable deposit of this disseminated alloy, it would cost significantly less to mine and recover the nickel alloy than it usually costs to extract nickel from sulphide or laterite deposits, where flotation and subsequent smelting are required.

The 132-sq. km Decar property covers an ultramafic belt roughly 90 km northwest of Fort St. James. The property is accessible via a main line logging road and the largely inactive but intact B.C. rail line lies immediately to the east.

The property hosts three main nickel targets, known as Sidney, Baptiste, and Van, all of which host coarser-grained nickel alloy in outcrop. The goal is to find deposits wherein the alloy exists in grains larger than 0.1 mm because grains smaller than that are no longer amenable to easy magnetic or gravity separation. The Sidney and Baptiste targets are 2 km apart and occur within a broader area of finer-grained alloy. As measured by surface sampling, the Sidney target measures 500 by 400 metres while the Baptiste target covers 1,550 by 850 metres. The Van target is roughly the same size as Baptiste and lies 2 km to the northeast.

When news of the Cliffs partnership first broke First Point’s share price gained as 12¢ or 100% to reach 24¢. In the ensuing two weeks it settled to the 20¢ range. Prior to the Cliffs placement, First Point had 58 million shares outstanding.