$28M Carnilya Hill Nickel Mine Development by Mincor

Mincor Resources NL has confirmed a brand new $28 million nickel mine development at its 70%-owned Carnilya Hill Project in Western Australia.

The project has been given the go-ahead much less than 365 days after the preliminary discovery — represents Mincor’s fifth new mine development inside the Kambalda District seeing that 2001.

“We are delighted with the outcome of our work at Carnilya Hill,” said Mincor’s Managing Director, David Moore.” This has been a remarkably successful company to this point, and we are searching ahead to the development of what we consider might be a robust and worthwhile mining operation.”

“We also are very happy with the guide we have obtained from our joint project partner, View Resources Ltd, and we appear ahead to continuing our robust dating with them as we pass the assignment into production.” The Carnilya Hill Project is forecast to perform at a manufacturing fee of approximately 15,000 tonnes of ore consistent with month, or 5,000 tonnes of nickel in keeping with annum, for an preliminary length of just below three years, based totally on cutting-edge ore reserves (Mincor’s equity share 3,500 tonnes of nickel in line with annum).

First manufacturing is focused for January 2008.

Cash costs for the existence of the present-day reserve are expected at a median of A$5.10 in step with pound nickel.

Government royalties at a compelling price of 3.85% could be payable, as is the case on Mincor’s existing mines.

All ore may be trucked to the BHP Billiton concentrator plant at Kambalda, where it will likely be toll dealt with and the resulting pay attention offered to BHP Billiton beneath a long-time period off-take agreement.

The phrases of this settlement are much like those that observe at Mincor’s existing operations.

Total capital costs for the life of the current ore reserve are anticipated at $28 million.

The bulk of this will be for decline development, with a full-size component referring to the reinstatement of surface infrastructure and the improvement of a new raise-bored ventilation shaft to the floor.

Mincor can be chargeable for 70% of this capital fee, in keeping with the joint task arrangement.

Based on the maximum recent nickel fee forecasts via Royal Bank of Canada, the project is forecast to generate extra than $two hundred million internet cash before tax, with an inner price of return (IRR) predicted at greater than 600%. The feasibility study estimates propose that the venture breaks even on a complete capital fee basis at a flat life-of-mine nickel fee of A$14,300 according to a tonne.

Mincor has obtained aggressive bids from five groups for the Carnilya Hill mining contract.

These bids affirm Mincor’s in advance value estimates, and the Company is currently in the very last stages of awarding the contract.

Mincor and View Resources have already positioned orders for numerous important long-lead time items. Site works will start without delay, and full-scale improvement is expected to commence during July.

Mincor has already sourced the maximum of the senior employees with a view to being required to manage the brand new operation. Moore said that the new development at Carnilya Hill endured the regeneration of the Kambalda Nickel District, which has unexpectedly regained its reputation as one of the world’s largest nickel districts.

“This is a considerable event for Kambalda and the Eastern Goldfields region,” he stated.

“Carnilya Hill will employ up to 77 people, and could generate enormous tax and royalty revenues, as nicely as sturdy earnings for our shareholders”.

“There is also tremendous upside at Carnilya Hill,” he continued.

“As with our other Kambalda operations, we accept as true with that the initial ore reserves are most effective the start because the mineralised channel stays open down-plunge and our current drilling has shown that high-grade mineralisation is present properly past the quit of the modern-day reserves.”

Carnilya Hill changed into found in 1974, and the authentic ore frame changed into mined from 1980 as a joint mission between WMC and BHP. It closed once regarded reserves had been exhausted in 1999.

View Resources executed restrained remnant mining among 2004 and 2005.

Mincor negotiated a joint undertaking with View Resources in overdue 2005 and started out drilling in March 2006.

The discovery hole (10.70 metres @ 6.95% nickel) was drilled in overdue June 2006 — less than twelve months ago.

Since then Mincor’s drilling has outlined an aid of 16,100 tonnes of nickel steel down-plunge of the formerly mined ore body. Feasibility studies conducted by means of Mincor have mentioned a sturdy mining project based totally on extending the present decline to an intensity of 650 metres.

Production might be via “short long-hole” stoping, a development-intensive method in order to maximise the gain of the in a position basalt hanging wall — a positive function that is specific to Carnilya Hill a few of the Kambalda nickel mines.

The ore reserve mentioned by Mincor for Carnilya Hill is 483,500 tonnes @ 2.9% nickel for 14,000 tonnes of contained nickel steel. This ore reserve is based totally on the previously introduced mineral resource (328, four hundred tonnes @ 4.9% nickel) and includes all appropriate mining and dilution parameters.

Mincor has a multi-pronged growth method in nickel and is aggressively pursuing a pipeline of new improvement possibilities and exploration projects within the Kambalda Nickel District.

The Company is also inside the process of obtaining the operating Otter Juan Nickel Mine and the McMahon and Durkin nickel projects and is focused on a sustainable manufacturing rate of 20,000 tonnes in step with annum of nickel metallic in the ore.

The records in this Public Report that relates to Exploration Results, Mineral Resources or Ore Reserves is primarily based on information compiled via Jim Reeve, Peter Muccilli and Dean Will, all of whom are Members of The Australasian Institute of Mining and Metallurgy.

Reeve, Muccilli and Will are permanent employees of Mincor Resources NL.

They have enough experience this is applicable to the style of mineralisation and type of deposit underneath consideration and to the hobby that they are project to qualify as a Competent Person as defined inside the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

Reeve, Muccilli and Will consent to the inclusion within the file of the matters based on their statistics within the shape and context in which it appears.