LONDON (Alliance News) – Amur Minerals Corp said an independent review found that the estimated cost of nickel to be transported to the Ulak rail state from its site in far-east Russia would cost USD1.78 per pound.
RPM Global Asia Ltd, a mining consultancy firm, estimated the total cost of open pit and underground mining, processing, all other site related costs and the cost of concentrate transport to the Ulak rail station, and the estimate was used by Amur to derive a projected average operating cost of USD1.78 per pound of nickel delivered to the station.
London-listed Amur said from the Ulak station, located on the Baikal Amur rail line, it has the option to ship the concentrate to a contract smelter or to treat the concentrate at a company-owned facility.
Amur also said the all-in operating costs to deliver concentrate to the planned Ulak rail station is projected to be about USD24 per tonne of ore, which is less than Amur’s estimate of USD26 per tonne made in the first quarter of 2015.
The company said the current nickel price stands at around USD4.00 per pound, or USD8,816 per tonne.
It added that the newly discovered high grade JORC defined exploration target located adjacent to the existing resource of Ikenskoe/Sobolevsky, is projected to have a potential delivered cost per pound of nickel of USD1.30, which Amur said is lower than any of the other deposits within its mining licence.
Amur said infill drilling of this target, which is expected to take place in August, is necessary to allow for resource calculation, which is estimated to range from 10.0 million to 15.0 million tonnes at an average nickel grade of 0.9% to 1% of nickel.
“Using today’s nickel price of approximately USD4.00 a pound, our projected breakeven cut off grades are lower than the cut off grade at which we report JORC mineral resources. This means nearly all of our reported resource is available in the determination of mining tonnages and grades. We therefore believe that we have a highly robust resource capable of supporting a long term operation at the current low price of nickel,” Amur Chief Executive Robin Young said.
“The breakeven operating cutoff grade will likely be reduced with the inclusion of any payable revenues derived from the excluded by-product value derived from copper, cobalt, platinum and palladium. We believe we have added an additional safeguard to our evaluation of the economic potential of Kun-Manie by this highly conservative approach and the exclusion of any resources below a 0.4% cutoff grade.”
Shares in Amur were up 2.3% to 6.13 pence on Monday.
By Maryam Cockar; email@example.com; @MaryamCockar
Copyright 2017 Alliance News Limited. All Rights Reserved.