Cost escalations impact Heron project
From Mining News Story.
Thursday, 20 March 2008
HERON Resources’ latest report confirms escalating costs as the key factor behind its Jump-up Dam nickel project being placed on care and maintenance.
Results from Heron’s December half yearly report detailed the company’s intention – announced in January – to put planned mining development at Jump-up Dam temporarily on hold.
Heron said the prefeasibility study at Jump-up Dam concluded that, as a stand-alone heap leach project, Jump-up Dam did not make an adequate return on investment.
Trial mining at Jump-up has continued but Heron said the proposed demonstration heap leach operation will be placed on care and maintenance.
Compared to an April 2007 scoping study the recent prefeasibility study estimated high capital expenditure and operating costs.
The cost escalation was due in part due to rising sulphur and fuel costs.
In a bid to combat price and embrace technological developments, the second half of 2007 saw Herron enter a significant technology licencing and product supply agreement with BHP Billiton.
The 15-year agreement will allow Heron to further optimise Jump-up Dam, particularly in the area of potential atmospheric leaching processes.
Also in its report, Heron confirmed further development of its Kalgoorlie nickel project, in which Vale Inco has a 60% earning interest.
Heron approved a $A13.8 million program at the project which will involve drilling, leaching test work and infrastructure studies.
Heron shares lost 11.7% in morning trading.
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