Suppliers News (October 01, 2007)

PolyMet gets unions onside, signs NorthMet deal

PolyMet Mining (POM-T, PLM-X) continues to take steps to get a mine off the ground in northeastern Minnesota’s Mesabi Iron Range.

The company has signed a labour agreement with 15 construction trade unions whose members will build and outfit the NorthMet copper-nickel-precious metals project and the accompanying Erie plant, a large processing facility situated about 10 km from the NorthMet orebody.

It’s thought that the project will take at least 1 million man-hours of labour to complete.

The agreement was signed at a ceremony in Hoyt Lakes, Minn., which was attended by PolyMet employees, union heads, suppliers, and local leaders.

John Grahek, president of the Iron Range Building Trades, says the agreement will “put people back to work on the Iron Range.”

Joe Scipioni, chief operating officer of PolyMet, added: “PolyMet is leading the way for both expansion and diversification of the economy of northern Minnesota.”

A new resource estimate, reflecting infill drilling and the inclusion of deeper mineralized zones, increases the size of PolyMet’s NorthMet deposit, in Minnesota’s Duluth complex.

The new estimate shows a measured and indicated resource of 579 million tonnes grading 0.27% copper, 0.08% nickel and 0.007% cobalt. Another 228 million tonnes is inferred, at grades of 0.28% copper, 0.08% nickel and 0.006% cobalt.

PolyMet did not publish individual grades for platinum, palladium and gold, but the estimate puts the total precious metal grade at 0.3 gram per tonne in both the indicated and inferred categories.

The previous measured and indicated resource figure, used in a final feasibility study for the deposit last October, was 383 million tonnes at about the same grades as the new resource; another 109 million tonnes was inferred, with grades of 0.25% copper, 0.07% nickel, and 0.007% cobalt.

Both new and old estimates used an identical cutoff grade, a total of US$8.18 per tonne net metal, based on a copper price of US$1.25 per lb. (US$2,750 per tonne) and a nickel price of US$5.60 per lb. (US$12,320 per lb.).

PolyMet is seeking environmental and operating permits in order to begin production in early 2009.

Osisko goes with BBA, Golder for feasibility

Osisko Exploration (OSK-V, OSXLF-O) has awarded two contracts as part of a feasibility study on the company’s Canadian Malartic gold project, south of Malartic, Que.

BBA, a Montreal-based mining engineering firm that has designed and built several bulk-tonnage, low-grade gold mines, will design the proposed Malartic processing circuit and mine-site buildings.

BBA’s man on the ground is project manager David Runnels, a 35-year veteran who has worked on large open-pit mines such as Omai in Guyana, Rosebel in Suriname and Quebec’s Troilus.

Runnels has also worked with Luc Lessard, who was recently named Osisko’s vice-president of engineering and construction for Canadian Malartic.

Meanwhile, Golder Associates will conduct geotechnical work in the Canadian Malartic open pit, and design a tailings storage facility.

Golder’s point man will be Michel Julien, a senior engineer from the Montreal office.

Golder is no stranger to the camp, having worked on the East Malartic mine in the 1960s. Golder planned and designed the expansion of the East Malartic tailings basin for Lac Minerals’ Doyon and Bousquet mines and worked on the tailings facility until the property was eventually sold by Barrick Gold (ABX-T, ABX-N) in 2003. Golder was then hired by the Quebec government to audit the site.

“The combination of BBA’s strong team and their prior close working relationship with Osisko’s new mine development team, along with Golder’s experience and in-depth familiarity with Malartic, should add up to a close-knit group,” says Sean Roosen, president and CEO of Osisko.

Osisko is evaluating the Canadian Malartic gold deposit and adjacent areas for a large-scale, open-pit, bulk-tonnage operation.

Consulting firm RSG Global puts the size of the inferred resource at Canadian Malartic at 286 million tonnes grading 0.92 gram gold per tonne, using a cutoff grade of 0.4 gram gold per tonne.

The 0.4-gram cutoff grade, which Osisko sees as being justified by early results coming from a preliminary economic analysis of the project, is 0.1 gram per tonne lower than a previous estimate used. RSG Global’s December 2006 resource calculation, with a cutoff of 0.5 gram per tonne, estimated the inferred resource at 177 million tonnes grading 1.15 grams gold per tonne.

The new estimate is based on 331,000 metres of drilling, compared with 244,000 metres in the previous estimate, and takes in a number of extensions to the deposit that had not been included in earlier calculations.

At a 0.7-gram cutoff grade, the tonnage falls to 136 million tonnes and the grade rises to 1.35 grams per tonne.

BBA has over 350 employees, and the mining and metallurgy group is located in Montreal.