New Moran deposit to give Kambalda nickel mine greater longevity
The Long Shaft at Kambalda in Western Australia, which has been one of Australia's great nickel mines, now has a guaranteed life through until 2015.
Posted: Tuesday , 15 Jun 2010
Independence Group NL (ASX: IGO) announced today that the decline down to the Moran deposit at the Long mine was completed on schedule and first ore delivery was expected to be made early next month.
The performance of Long for IGO has made the company one of the mid-tier blue chip performers on the Australian mining scene - having bought the mine of WMC Resources in 2002 for A$15 million (US$12.8 million) and having produced a profit to date of A$268 million (US$229 million). In the process the company achieved the status of being Australia's lowest cost nickel mine.
In an international presentation by Independence, also released today, the company said that in fiscal 2009/10 the production target was between8,000-8,400 tonnes of contained nickel grading 4% nickel and to achieve cash costs of between $A4.20-4.40/lb.
The company also had in place a hedge position for 8,630t of nickel at an average hedge rate of A$21,813/t (US$18.632/t).
The presentation said the Moran deposit, sitting below the Macleay and Victor South deposits at long, has a resource of 456,000t grading 7.1% Ni and an ore reserve of 640,000t @ 4/1% Ni. The deposit was still open along strike and at depth.
The deposit was named after Tim Moran who was Independence first operations manager at Kambalda and earlier a resident manager there for WMC Resources before that company was taken over by BHP Billiton. Moran still consults to IGO.
The presentation said that IGO's other major asset, the 30% stake in the huge Tropicana gold project in the far east of the Eastern Goldfields of Western Australia, now has a resource inventory of 5.01 million ounces of gold.
The joint venture, with operator AngloGold Ashanti, takes in an established open cut reserve of 45 million tonnes grading 2.4 grams/tonne gold on the Tropicana and Havana deposits.
New discoveries have been made on the Tropicana project which covers a geological strike of 330 kilometres and licences that cover 13,000 square kilometres.
The blueprint for Tropicana is to have a milling capacity of up to 6 million tonnes per annum, costing A$500-540 million to establish, and to recover between 330,000-410,000 oz pa.
The bankable feasibility study is expected to be completed by October and the targeted first gold pour was for the first half of 2013.
Qualification: A member of the writer's family holds a small parcel of IGO shares.