Engineering & Mining Journal

DEC 2012

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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REGIONAL NEWS - AUSTRALIA/OCEANIA Koniambo Nickel Ready for Production Start The Koniambo project processing plant, 110 m high, is the tallest manmade structure in New Caledonia. The plant, shown here during construction, was assembled from modules fabricated in China and shipped to the site. Xstrata Nickel, the industrial partner in the Koniambo nickel project in New Caledonia, announced on November 23 that construction of the first production line (Line 1) of the project's smelter is complete. The necessary support services and operational infrastructure were undergoing pre-operational testing and commissioning. The company anticipates that the first metal will be tapped from Line 1 in January 2013. Xstrata Nickel holds a 49% interest in the Koniambo project. Société Minière du Sud Pacifique, the development arm of the North Province of New Caledonia, is its 51% joint venture partner. With construction of Line 1 complete, the majority of the project's construction resources are now being devoted to the second production line, which is forecast to be complete in the second quarter of 2013. Koniambo Nickel is scheduled to ramp up to a steady-state production run rate of 60,000 mt/y of nickel in ferronickel by the end of 2014. The smelting process being utilized at the project is an updated version of the process used at Xstrata Nickel's Falcondo operations in the Dominican Republic. 24 E&MJ; • DECEMBER 2012 Nickel at Koniambo is contained in both saprolite and limonite materials, with grades that compare favorably with other laterite deposits in the world. The current resource base totals 75.6 million mt of measured and indicated saprolite resources at 2.47% nickel and 83 million mt of inferred resources at 2.5% nickel. Initially, nickel will be extracted from the saprolite part of the orebody. Plans are in place for future expansions that will extract nickel from the limonite orebody, an undiluted inferred resource of 100 million mt of 1.6% nickel, using a hydrometallurgical process. Rex Minerals Targeting South Australia Copper Mine Australian junior company Rex Minerals has released a prefeasibility study (PFS) for its Hillside copper-gold project on the Yorke peninsula in South Australia. The PFS describes an open-pit mine supplemented by underground mining that would produce 70,000 mt/y of copper and 50,000 oz/y of gold in a copper-gold concentrate over a minimum mine life of 15 years. Additionally, the tailings from the Hillside copper-gold circuit would be treated to recover 1.2 million mt/y of high-quality (67% Fe) iron ore concentrate. Capital costs to develop the Hillside project are estimated at A$900 million, including an A$90 million contingency. Cash costs are estimated at $1.20/lb of copper produced after byproduct credits. Combined indicated and inferred resources at the Hillside project, at a 0.2% copper cut-off grade, total 330 million mt grading 0.6% copper, 0.16 g/mt gold, and 13.7% iron, equating to 2 million mt of copper, 1.7 million oz of gold, and 44 million mt of iron ore. The PFS assumes development of an open-pit mine with an average waste-to-ore strip ratio of approximately 4:1 and an average mining cost of about A$3/mt. Copper mineralization extends beyond the maximum depth of the planned Hillside open pit, and the PFS considers mining 30 million mt of this mineralization by underground longitudinal and transverse sublevel caving methods. The underground resource remains open at depth and is expected to grow over time. Processing plant design for the Hillside project calls for 15 million mt/y of throughput capacity and a conventional coppergold flotation circuit. Flotation tailings would be treated by magnetic separation methods to produce iron ore concentrate. Rex has started work on a bankable feasibility study of its Hillside project and is pursuing a number of financing options. The company will submit the required South Australia government approval documentation in early 2013. The company anticipates that the feasibility study, government approvals and final financing will be completed before the end of 2013 in time for project construction to begin in early 2014. Drilling is continuing within the limits of the Hillside PFS open-pit design, with the objective of defining 10 years of reserves in time for use in the bankable feasibility study in the second half of 2013. Rex Minerals Managing Director Mark Parry said, "The Hillside PFS confirms the economics of a robust and significant copper project, possibly the best open-pit project in Australia since Ernest Henry 25 years ago." www.e-mj.com

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