oxiana also keen on nickel

Oxiana loses fear of nickel projects
Jamie Freed - AGE.COM.AU
April 20, 2007


OXIANA is eyeing nickel projects — including costly laterite developments — after completing its $415 million purchase of Agincourt Resources.

Oxiana now owns the Martabe gold project in Indonesia and the Wiluna laterite project in Western Australia. This has an inferred resource containing 600,000 tonnes of nickel at a grade of 0.8 per cent.

"That's a very significant ore body," Oxiana managing director Owen Hegarty said. "We will give that a serious, long, hard look."

In November, Mr Hegarty said Oxiana favoured copper, gold and zinc ahead of nickel because it was more difficult to discover nickel and it required greater expertise to build projects.


But in a quarterly report released yesterday, Oxiana revealed its focus on laterite and Wiluna. It said it had also signed a memorandum of understanding with China's third-largest nickel miner, Henghao Group, to evaluate laterite and sulphide projects in China.


"We are really not afraid of laterites now," Mr Hegarty said. "We are at a scale now where we can tackle some of those bigger, more technically complex operations."

Nickel laterite projects have a mixed history in the Asia-Pacific region. Minara Resources' Murrin Murrin project, once controlled by Andrew Forrest's Anaconda Mining, initially suffered severe technical problems and cost blow-outs.

BHP Billiton's $US2.2 billion ($A2.6 billion) Ravensthorpe project in WA and CVRD's $US3 billion-plus Goro project in New Caledonia have also faced delays and cost blow-outs.

"(Nickel) is a base and precious metal," Mr Hegarty said. "We know plenty about it. We would like to be in it."

Oxiana said production was slightly below analyst expectations but remained on track to meet annual targets.

Its $775 million Prominent Hill copper-gold development in South Australia is on time and on budget. Mr Hegarty said Oxiana might build a 1-2 million tonne-a-year mine at Prominent Hill to supplement the open pit feed in the next few years.

Oxiana shares closed down 6¢ at $3.03.