seems like a nice spec opportunity

A nice article I found on Kitoc this morning.
I posted this about an hour ago and it has only got 5 reads so I have decided to try a different headline to attract attention lol.

I found this article on Kitco ... at first glance sounds like an interesting company, and judging by the sp, not many see the potential yet.

12 January 2006

Australia's Metallica: Nickel ore good enough to mine
Source: Townsville Bulletin

See also
Nickel Mining Board
Nickel Mining CatalogThe prospects of developing a $100 million a year operation on the abandoned Greenvale nickel province have been bolstered by positive test results, according to the company proposing the venture.

Diversified resources company Metallica Minerals has announced test work on the company's Minnamoolka ore body has extracted 50 per cent of available nickel in the past 170 days.

"At this rate we are on track to achieve our goal of extracting 70-75 per cent of the nickel in 10 months," Metallica managing director Andrew Gillies said.

"The results of test work which has been undertaken for Metallica by Hydrometallurgical Research Laboratories in Brisbane are extremely encouraging and we have increased our understanding of the heap leach process on our nickel ores considerably."

Metallica is aiming to be the first company in the southern hemisphere to extract nickel and cobalt from ores using low-cost heap leaching commonly used to extract gold and copper.

The firm has commissioned HRL to undertake initial lab work but it is thought the real test will come when a demonstration heap leach nickel operation is established, possibly early next year.

Mr Gillies said the company was undertaking feasibility studies on capital costs and operating margins at present.

It was hoped to complete those studies this year and to be in a position to develop the demonstration plant at its Lucky Break deposit about 100km west of Townsville and to be in production by mid-2007.

He said a $10 million plant would employ about 15 to 20 people and produce about a 1000 tonnes of nickel contained in concentrate grading about 35 per cent nickel metal. All going to plan, a second stage processing up to 250,000 tonnes a year and producing about 10,000 tonnes of nickel would be established in 2008.

The concentrate would be on-sold to refineries, possibly Townsville's Yabulu plant, for further refining.

"We would be looking at revenues in excess of $100 million . . . that's being conservative on the (nickel) price," Mr Gillies said of the 15 to 20-year operation.

Mr Gillies said HRL's nickel extraction was faster than that achieved by European Nickel PLC – the London-based developer of a nickel laterite mine project in Turkey.

He said European Nickel had completed a feasibility study on its project indicating an internal rate of return of 23.5 per cent and expected to produce about 21,000 tonnes of nickel in concentrate starting in 2007.

Metallica's North Queensland Nickel Cobalt project is based on three nickel cobalt laterite deposits – Bell Creek, Minnamoolka and Kokomo.

The company has a joint venture with Metals Finance Corp for a feasibility study and the development of a stage one heap leach nickel operation at Metallica's Lucky Break deposit.

The Lucky Break heap leach project is planned to form a major part of the feasibility of the larger stage two project.

Metallica signed a joint venture with BHP Billiton in August last year under which BHP Billiton could outlay up to $11.75 million in the search for nickel-copper-platinoid sulphide deposits in Metallica's Greenvale tenements.

However the joint venture does not include Metallica's laterite deposits which it is evaluating for the heap leach nickel development.