A feasibility study on the Bucko nickel deposit in the Thompson belt of Manitoba shows favourable economics, putting a $22.6-million net present value on the project.
Project operator
Bucko has an indicated resource of 1.8 million tonnes grading 2.1% nickel, based on a 1.5% cutoff grade. For the purposes of the study, Crowflight’s consultants pared the resource down to a reserve of 1.7 million tonnes grading 1.92% nickel. That resource would be mined at 1,000 tonnes per day, with production of a concentrate on-site.
The mine would have a capital cost of $21 million with a mill costing $35.2 million; production would begin partway through 2007. The study identified mining and milling costs of $1.74 per lb. nickel, and smelting, refining and transport charges of $2.56 per lb., for a total cash cost of $4.40 per lb. including a 2.5% net smelter return to Falconbridge.
The study’s economic models, using US$11,000 per tonne (US$5 per lb.) as the nickel price, put the net present value of Bucko at $22.6 million, based on a 10% discount rate. The internal rate of return is 23.9%. Bumping nickel prices to US$13,200 per tonne (US$6 per lb.) brings the discounted value to $53.1 million.
Under the revised option agreement with Falconbridge, still to be finalized, Crowflight would earn a 33% interest in the mining lease surrounding Bucko by funding a bankable feasibility study on Bucko and by spending $1.5 million on exploration on the “TNB South” land package — a group of five properties in the Wabowden area, including Bucko. Crowflight brings its interest to 50% by delivering the feasibility study by the end of 2006 and by spending $6 million on TNB South by the end of April 2009.
Crowflight’s commitments on regional exploration have been rescheduled under the revised agreement.
Be the first to comment on "Crowflight’s Bucko study proves positive"