SYDNEY--High nickel prices have prompted Australian miner Mincor Resources NL (MCR.AU) to develop a small, low-grade nickel deposit previously considered uneconomic, the company said Tuesday.
Mincor said it expected to yield 500 metric tons of nickel in concentrate at the North Dordie open pit mine, south of Kambalda in Western Australia state.
It expected to mine about 60,000 tons of ore at 1.2% nickel grade with a cut-off grade of 0.5% and a mine life of five months.
Rising nickel prices prompted a review of an earlier feasibility study in 2003 that deemed the project uneconomic.
"However, at current nickel prices, we believe that North Dordie will generate a healthy and rapid financial return," Managing Director David Moore said.
"This is an opportunity to take advantage of the current strong nickel price to unlock the value of this boutique and strategically located deposit."
Subject to satisfactory grade control, the estimated cash costs for North Dordie are A$8.50 a pound and expected capital costs A$4 million.
All production will be sold to BHP Billiton (BHP) under a short-term variation to Mincor's existing offtake agreement.
Nickel prices on the London Metal Exchange have hit multiple record highs during 2006 and this year, rising more than 50% since the start of 2007 alone to a record US$48,500/ton.
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