mining news

Heron completes Yerilla scoping study

Friday, 12 September 2008
Kristie Batten

DESPITE the falling nickel price, Heron Resources says its scoping study into the Yerilla nickel laterite project near Kalgoorlie has returned positive results and supports the proposed use of atmospheric leaching technology.

Using the process, the company says, Yerilla could have an 18 year operating life producing 21,000 tonnes of nickel in mixed sulphide intermediate product and 1400t of cobalt a year from 2.5 million tonnes of leach feed grading 1.06% nickel and 0.07% cobalt.

Cash operating costs are estimated at $US5.70 ($A7.09) per pound of payable nickel equivalent.

Capital cost of the project is estimated at $1.2 billion, with an estimated payback of 6.5 years.

The project has a net present value of $218 million at a $US9/lb nickel price, increasing to $1 billion at $11/lb.

The nickel price is currently trading at around $18,475 per tonne or around $8.40/lb.

The study assumed a pre-tax 8% discount rate and an exchange rate of A75c.

Through a technology sharing agreement with BHP Billiton, Heron was able to use its technology facilities and technical experts for the testwork.

Heron managing director Mathew Longworth said the company would review the results and likely seek an EQUITY PARTNER given the large capital requirements of the project.

“Further studies will be undertaken to investigate the opportunities for further improvements in important aspects of the project, including resource beneficiation, leaching performance and water quality,” he said.

The Yerilla project comprises the Aubils, Boyce Creek and Jump-up Dam areas and has a mineral resource of 135.4Mt grading 0.77% nickel.

Shares in Heron Resources were 1c up this morning to 35.5c.

Heron Resources will be presenting at the 2008 Excellence in Mining & Exploration investment conference in Sydney from September 14-16 at the Hilton.