Langmuir nickel production near – Low-cost access to orebody

The Langmuir No. 1 deposit of Timmins Nickel (TSE) should be in full production by mid-November, The Northern Miner learned during a visit to the project, 14 miles south of here. The company is currently drifting into the small orebody which is reached by a decline ramp. It should take about a year and a half to mine. The lens-shaped deposit contains reserves estimated at around 187,475 tons grading 1.8% nickel, according to the company.

“The Langmuir mine is an extremely low-cost operation since we were able to get into the orebody for under $150,000,” mine manager Don MacKinnon told The Northern Miner.

He said the project benefits from shared costs with the nearby Redstone mine which began production in 1989 and is 49% owned by BHP-Utah Mines.

“We’re trying to run a tight operation not a fancy operation,” explained company treasurer James Fairbairn. “Basically, we’re putting the smaller nickel deposits into production that other companies have left behind.”

Meanwhile, at the nearby Redstone mine, the company has replaced the reserves it mined out last year by additional exploration work at depth. Reserves for Redstone, which is 51% owned by Timmins Nickel, stand at 460,000 tons grading 2.38% nickel.

After a brief shutdown earlier this year, the company has successfully reduced its mining and administration costs to $69 per ton, down from an earlier high of $129.

The cost savings have been accomplished through a variety of measures: improved operating rates, reduced energy costs due to completion of a power line, elimination of contractor costs and greater familiarity with the orebody.

After negotiating new sales contracts with refiner Sherritt Gordon (TSE), the junior plans to double its output to eight million pounds of nickel, up from the current four million pounds per year.

The next deposit likely to be brought on stream at the project will be the Tontine orebody, about two miles south of the Langmuir No. 1 deposit. Tontine contains reserves of 620,000 tons grading 1% nickel, including a higher-grade core of 150,000 tons grading 1.73% nickel.

According to MacKinnon, there is still plenty of potential for more nickel discoveries elsewhere on the company’s properties. More work is planned on the exploration front, he said.

“Over the past six months we haven’t done much surface exploration around the Shaw Dome, but we’re getting back to it now,” he said. The company plans to hire a few more geologists to conduct the exploration work on surface and underground. Redstone currently has a workforce of about 57 while another 14 are employed at the Langmuir site.

According to the company, the Shaw Dome compares closely in structure with the Kambalda Dome in Western Australia. Exploration there to date by Western Mining of Australia has located about one deposit of nickel per mile of strike length. The combined tonnage for that Australian area is about 34 million tons grading 3.6% nickel, said Timmins Nickel.

Investment firm Richardson Greenshields considers the Shaw Dome area controlled by Timmins Nickel to have excellent exploration potential since it has been overlooked by prospectors and geologists until recently.

On the financial front, the company is attempting to raise about $2.8 million in financing it needs to build its own mill at the old Langmuir No. 2 mine site where there had been a mill until recently.

Current production from Timmins Nickel is custom milled at the GOMILL in Timmins and shipped by rail to Sherritt’s refinery at Fort Saskatchewan, Alta. Negotiations are under way to arrange custom milling contracts for larger tonnages at the Schumacher mill.

Sherritt’s coinage business produces the blanks used for the Canadian “loonie” 1-dollar coin. “There are going to be lots of loonies,” said a miner at Timmins Nickel.