allegiance mining starts nickel mining at tasm, page-22

Historic Tasmanian start to nickel production




Allegiance underground operations

First production mining is underway in west Tasmania at Allegiance Mining’s Avebury underground mine, which is expected to produce the world’s highest-grade nickel concentrate.

Located near Zeehan on Tasmania’s west coast, the mine’s future has been assured through a US$3 billion offtake agreement with the fifth largest nickel producer in the world, China’s Jinchuan Nickel.

Avebury has a resource of 12 million tonnes of nickel, grading 1.11 percent nickel at 0.7 percent cutoff for a contained metal resource of 131,000 tonnes.

Allegiance’s General Manager Avebury Operations, Paul Richardson said maiden mining had commenced in recent days, establishing underground stoping blocks ahead of planned first milling and production by the opening quarter of 2008.

“Avebury is expected to produce concentrates grading around 22 percent nickel and this puts it well ahead of the Mount Keith and Cosmos nickel mines in Western Australia, and nearly one third higher than the world renowned Voiseys Bay project in Canada,” Mr Richardson said.

“The Avebury region is emerging as a true nickel province in its own right as the rate of local discoveries continues at a time of high long-term world demand,” he said.

Jinchuan supplies 90 percent of China’s nickel and has an 11 percent stake in Allegiance.

“The offtake agreement with Jinchuan has removed the sales risk for Avebury and provided a technological and financial partner that is the world’s fastest growing nickel company in the world’s fastest growing nickel market,” Mr Richardson said.

- 25 Oct 2007