Proto considers Tasmanian nickel project
Posted: 2 August 2007
Canadian-based Metals Finance Corporation has increased its stake in the Australian resources sector with a joint venture to consider the development of Proto Resources & Investments Limited’s Barnes Hill nickel project in Tasmania
Proto today reported it had signed a 50:50 joint venture agreement with Metals Finance Corporation under which Metals Finance will fund a pre-feasibility study and any development of a mine and processing facility that flows from a positive evaluation of the project.
The Barnes Hill project, located 30 kilometres north of Launceston, contains a 12.1 million tonne Australasian Joint Ore Reserves Committee (JORC) compliant Indicated resource of 0.83 per cent nickel and 0.07 per cent cobalt – equating to 120,000 tonnes of in-ground nickel metal and 840 tonnes of in-ground cobalt.
Proto Chairman and Managing Director, Mr Andrew Mortimer, said the joint venture agreement was a significant step forward for the Company that would deliver significant potential benefits for shareholders.
"Proto firmly believes in the potential of the Barnes Hill project to deliver strong earnings for the joint venture and be profitable even at lower than present nickel prices, which are subject to fluctuation," Mr Mortimer said.
"Metals Finance thoroughly reviewed the Barnes Hill project before signing this agreement and is also confident of the project’s positive viability," he said.
The Proto-Metals Finance joint venture is targeting mid-2009 for the commencement of production at Barnes Hill.
Metals Finance is a specialist developer and financier of metal production projects and has agreed to fund the pre-feasibility study at Barnes Hill and to engineer the production facility that will produce a high-grade nickel salt from Proto’s nickel ore.
Metals Finance will also finance 100 per cent of the capital expenditure on the processing facility.
Proto will assist Metals Finance in the pre-feasibility study and be responsible for mining the ore from the surface deposit.
Proto and Metals Finance will each have a 50 per cent interest in the Barnes Hill Joint Venture with Metal Finance’s interest to vest once a decision to proceed to the operating phase of the joint venture is made.
Metals Finance is aiming for the production of 4000 tonnes of nickel metal in concentrate from Barnes Hill per annum.
Metallurgical test-work has previously been completed at Barnes Hill indicating the potential for excellent recoveries using high pressure leach techniques and also good recoveries using low pressure hydrochloric acid based techniques.
As previously announced, Proto has commenced an in-house scoping study on Barnes Hill.
Members of the Proto team have visited the site and met with government officials. A sampling program is underway. The program includes three phases of work:
- Phase one is to assess the geochemical variability of the resource and to assess accuracy of historical drilling/geochemical databases;
- Phase two will involve sampling of four areas to provide 150 kilogram samples for assessment of heap leach techniques as a processing method;
- Finally a 15 tonne bulk sample will be tested to further assess the viability of heap leaching on a larger scale. Planning is also under way to collect additional samples in an effort to increase the resource.
The Barnes Hill area has excellent infrastructure being only 20 kilometres from port facilities on the Tamar River.
The Bell Bay power station, the Temco smelter and other major industrial sites can all be found close by, a reflection of the development and engineering expertise in the area.
Posted by Richard Price, Editor, EnergyME.com
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