In North America, exploration programs continue in Michigan, Minnesota and Ontario. The search is focused on intrusive-related, massive sulphide deposits. Last year, the new Eagle nickel prospect in Michigan’s Upper Peninsula was handed over to a dedicated team at Kennecott Minerals for evaluation and permitting. Based on a preliminary order of magnitude study, it was determined that the Eagle project should be moved from an exploration project into a potential development project.
The project is 40 km northwest of Marquette, Mich. Kennecott has been exploring for nickel in Marquette Cty. since 1994. The first holes drilled at Eagle in 1995 encountered nickel and copper mineralization, but it wasn’t until 2002 that a discovery was made. By the end of 2004, a total of 102 holes representing over 23,000 metres of core drilling had been completed.
The Eagle deposit contains a high-grade resource of 5 million tonnes grading 3.68% nickel, 3.06% copper and 0.1% cobalt, equivalent to 184,000 tonnes nickel and 153,000 tonnes copper. Associated platinum group elements (PGE) and gold combine for credits of 3.4 grams per tonne.
The Eagle deposit is hosted in an intrusive body with a surface area of about 5 hectares. The mineralization occurs in an upper and lower zone, both of which are wedge-shaped and taper with depth.
The company is currently conducting environmental, economic and engineering studies to determine the feasibility of developing the deposit as a small underground mining operation, with a life of six to eight years. If the Eagle project is developed, it will be the only primary nickel mine in the United States. Preliminary capital costs are estimated to exceed US$100 million.
Exploration is continuing around the Eagle deposit for additional resources. “There is excellent exploration potential both directly beneath Eagle itself, adjacent to Eagle in satellite intrusive bodies, as well as further along regional strike,” said chief executive of Rio Tinto’s copper group and head of exploration, Tom Albanese.
Kennecott’s exploration team is using innovative down-hole seismic techniques to help target massive sulphide mineralization.
Four high-priority nickel targets, which are all being drilled at the moment, are within 30 km of Eagle. One of these targets is the BIC prospect, where “quite a bit” of disseminated sulphide mineralization has been intersected near the base of an intrusive body in previous drilling. There are plans to follow this up with a deeper drill hole later in the year.
“The nickel tenure of what we have seen so far indicates that massive sulphides have the potential to be of good grades and potentially contain significant levels of PGEs,” Albanese noted.
In Indonesia, an “order of magnitude” study was completed in early 2005 on the wholly owned La Sampala nickel-laterite project. Negotiations to secure a contract of work are currently under way.
“Assuming good progress is made on these negotiations we hope to be able to move the project into preliminary feasibility early next year,” Albanese said.
La Sampala is comprised of the northern deposit, spread over an area of 30 sq. km, and the 38-sq.-km southern deposit. An oxide resource occurs as limonite, while silicate resources occur as saprolite. The oxide averages a grade of 1.5% nickel and 0.1% cobalt, using a 1.1% nickel cutoff, whereas the saprolite averages 2.1% nickel and 0.04% cobalt, using a 1.7% nickel cutoff.
So far, Rio Tinto has drilled a total of 264 holes into these two deposits. “These deposits show good consistency and no show-stoppers have been identified,” said Albanese.
Preliminary metallurgical testwork has been favourable.
Diamond finds
Using the expertise and experience gained from the Argyle diamond mine in Australia and the Diavik discovery in Canada’s high arctic, Rio Tinto has turned its attention to other parts of the world in the search for new diamond deposits, including Botswana, Brazil, India, Russia and Mauritania.
In India, exploration programs are ongoing across a number of cratons. Since 2001, Rio has discovered 25 kimberlite pipes in four different states, with a diamond-bearing cluster of pipes at the Bunder project being the first to show economic potential.
Eight pipes, with a combined surface area of 22 hectares, have been identified at Bunder. Microdiamond analysis of drill-core samples from the two largest pipes, including the 15-hectare B28 pipe, has produced what Albanese describes as “interesting stone counts.”
A large-diameter drilling program will gather additional mini-bulk samples from the pipes over the next few months.
“Satisfactory progress could see completion of an order of magnitude study as early as 2006,” Albanese said.
India’s only hard rock diamond mine is 70 km from Bunder. The stones from this mine reportedly garner US$100 per carat or more.
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