Current Mining Operations & Nickel Projects

Miitel Nickel Mine

Mincor acquired the partially developed Miitel Mine from WMC Resources Ltd in 2001 and put it into production that year as the Company's first mine. To December 2008 Miitel had produced 1,756,337 tonnes of ore at an average grade of 3.12% nickel, for 54,842 tonnes of contained nickel and 48,319 tonnes of nickel-in-concentrate, and generated gross revenues of just over $577 million. With past production added to June 2008 ore reserves, Miitel's total known nickel endowment is in excess of 67,000 tonnes of nickel metal, and with future exploration success may ultimately exceed 100,000 tonnes of contained nickel metal - making Miitel one of the more significant of Kambalda's ore bodies.

The Miitel ore body has an elongated, near vertical but gently plunging configuration, making it ideal for mining. The channel structure that hosts the ore lenses has proved very continuous. Mincor discovered the North Miitel ore body in 2002 and the South Miitel ore body in 2005. The overall mineralised system remains open to the north and south and subject to ongoing exploration.

Miitel Long Section showing Channel Structures

   

Mincor suspended operations at Miitel in December 2008 following the collapse in the nickel price in October 2008, and the mine is now on care and maintenance. However with current ore reserves of over 430,000 tonnes, including 100,000 tonnes of fully developed ore, the mine is capable of a very rapid and low cost return to production, and is a key element in Mincor's positioning for the next upturn in the nickel price.

Otter Juan Nickel Mine

The world-class Otter Juan Mine is Kambalda's oldest producing mine and by far its largest single producer. The mine has been in near-continuous operation since 1970 and to end-June 2008 had produced approximately 8.5 million tonnes of ore at an average grade of 3.56% nickel, for over 303,000 tonnes of nickel metal.

Mincor acquired the Otter Juan Mine in July 2007 through its acquisition of the privately owned company, GMM Pty Ltd. Mining is expected to continue for at least the next 4 years at an annual rate of approximately 100,000 tonnes of ore grading 3.6% nickel, for 3,600 tonnes of nickel metal per annum (see opposite diagram).

Otter Juan is an owner-mining operation and is operated by a skilled residential workforce of Mincor employees. Mining takes place at a depth of around 1,400 metres below surface. Level development is done using jumbo drilling machines but stoping is carried out using hand-held mining techniques. Due to the depth of operation, approximately 30% of the ore is left as pillars to provide stability to the rock mass.

The ore body is structurally complex, and is the strongest and most consistently mineralised channel structure in the Kambalda District. The structural complexity provides many opportunities for the discovery of additional ore lenses, and historically many small but very high-grade lenses have supplemented production.

McMahon/Durkin and Otter-Juan (showing Channel Structures)

Apart from the down-plunge extensions of the main ore body, these additional high-grade ore lenses are the subject of ongoing exploration. In addition there is a very substantial remnant mining opportunity which is now being investigated. 

Mariners Nickel Mine

The Mariners Nickel Mine was discovered and operated by WMC Resources Ltd between 1991 and 1999, over which period it produced 1,114,730 tonnes of ore at 2.53% nickel for 28,190 tonnes contained nickel metal. It was closed by WMC and written off in 1999 due to flooding which coincided with a period of low nickel prices. Mincor acquired the project at no cost as part of its acquisition of the Miitel Nickel Mine in 2001.

Mincor carried out feasibility studies on reopening Mariners during 2002 and 2003, and gave the project the go-ahead in 2004. After 6 months of pumping the mine was de-watered and mining commenced.

Since then, and to December 2008, Mincor has extracted 697,852 tonnes of ore at 2.30% nickel for 15,937 tonnes of contained nickel and 13,711 tonnes of nickel-in-concentrate, generating gross revenues of over $230 million.

Mariners Long Section 

  

Mincor operates the Mariners Mine via a mining contractor (currently Barminco). Mincor provides mining engineering, planning, surveying, geological and management expertise, while the contractor carries out the drilling and blasting and the transportation of the ore to surface. The mine is largely mechanised.

The exploration potential at Mariners Mine is very high. During 2006/07 Mincor discovered the NO9 ore body, which is now in production. Exploration is currently underway with good indications that a further ore body is present below the NO9.

Mining is continuing at a rate of approximately 14,000 tonnes of ore per month.

Carnilya Hill Nickel Mine

The Carnilya Hill Nickel Mine was discovered in 1974 and operated between 1980 and 1999, initially as a joint venture between WMC Resources Ltd and BHP Ltd. It was closed in 1999 on exhaustion of the then known ore reserves, having produced 1.4 million tonnes of ore at 3.37% nickel for 47,290 tonnes of nickel metal.

View Resources Ltd  acquired the operation in 2003 and between 2003 and 2005 carried out limited remnant mining. Mincor approached View in late 2005 and the companies agreed on an exploration joint venture under which Mincor would sole fund $2.5 million of exploration expenditure to earn a 70% interest in the project.

Mincor commenced drilling in April 2006, and the discovery hole (10.70 metres @ 6.95% nickel) was drilled in late June 2006.Mincor then commenced a detailed drill-out of the new discovery, and had feasibility studies underway by early 2007. By October 2006, Mincor had earned its 70% interest in the project, and a joint venture was constituted between Mincor and View.

In early June 2007, less than one year after the discovery hole was drilled, Mincor announced formal approval for the development of a $28 million mining project at Carnilya Hill, with initial ore reserves of 483,500 tonnes @ 2.9% nickel.

Development and production ramp-up continued through 2008, with stoping commencing late that year. The mine is currently producing at a rate of approximately 10,000 tonnes of ore per month.

The exploration potential at Carnilya Hill, beyond the currently defined reserves, is considered to be very high, with the mineralised channel structure enitrely open in the down-plunge direction.

Carnilya Hill Mine - Resources, Reserves and Development

McMahon Nickel Mine

The original McMahon Decline was developed by WMC Resources Ltd and used to mine the McMahon ore body, and subsequently a number of other ore bodies that were discovered and mined from the same decline. By June 2007 approximately 1.7 million tonnes of ore had been hauled to surface using the McMahon decline, from the mining of seven different ore bodies.

During 2007 Mincor carried out scoping studies, resource confirmation drilling, and later a full-scale feasibility study. This work examined the feasibility of mining the McMahon Deeps and Ken Far North ore bodies.

In November 2007 Mincor took the decision to develop the ore bodies, for a total projected capital cost of $23 million. The revised Mineral Resource totalled 373,656 tonnes of ore at an average grade of 4.1% nickel, for a total of 15,170 tonnes of nickel metal. Approximately half this Resource has been placed into the initial Ore Reserve, some 7,734 tonnes of nickel metal. The remainder of the Resource, being the Ken Far North ore bodies, require further drilling before they can be included in Ore Reserves. This drilling will be done from underground once suitable access is obtained.

In late 2008, following the collapse in the nickel price induced by the global financial crisis, Mincor suspended development of the decline at McMahon. Mining is currently underway from the reserves that had been accessed prior to the suspension of decline development.

The mine is operated on an owner-mining basis by Mincor's team at Otter Juan, and run as a subsidiary operation to Otter Juan. This structure captures significant cost savings by maximising the synergies between the two operations, which lie in close proximity to each other.

 

Coronet/McCloy Nickel Mine

Mincor acquired the Coronet and McCloy mining operations in July 2007 as part of its acquisition of private company, GMM Pty Ltd. Coronet was discovered by WMC Resources Ltd in the early 1990s and put into production by that company in 1995. McCloy was discovered later, and developed by GMM. To end June 2007, the two ore bodies had produced approximately 62,000 tonnes of ore at a grade of 2.85% nickel for 17,700 tonnes of nickel metal. Both ore bodies are mined as subsidiary operations to the bigger operation at Otter Juan.

Although mining at Coronet and McCloy was originally scheduled to terminate in July 2007 due to the exhaustion of known reserves, additional reserves have been discovered, and it now seems likely that mining will continue well into 2010. In addition, Mincor has commenced an extensional exploration program which, if successful, could extend the life of these operations well beyond that date.

 

Wannaway Nickel Mine

The Wannaway Nickel Mine was discovered in the early 1980s and mined between 1984 and 1998 by WMC Resources Ltd, producing 553,000 tonnes at 2.3% nickel for 12,560 tonnes of nickel metal. The original ore body was mined out by 1998, but WMC discovered a second, higher grade ore body alongside it. Mincor acquired the mine from WMC in 2001, before any mining had taken place in this second ore body.

Mincor commenced mining in late 2001 and by August 2008 the original ore reserves had been mined out and operations were terminated. During this phase of its life Wannaway produced 524,000 tonnes of ore at 3.0% nickel for 15,844 tonnes of contained nickel and 13,931 tonnes of nickel-in-concentrate, generating $141 million in gross revenues.

Significant nickel resources remain below the current level of development, as well as further exploration potential, and the mine is currently on care and maintenance pending higher nickel prices.

Durkin North Nickel Project

The Durkin North mineralisation lies down-dip of the previously mined Durkin ore body, which produced 3.15 million tonnes of ore at 3.26% nickel for 102,740 tonnes of nickel metal between 1969 and 1984.

Mincor has estimated a resource of 284,810 tonnes at 4.6% nickel for 13,160 tonnes of contained nickel metal in Indicated and Inferred Mineral Resources at Durkin North (see above diagram).

Initial scoping studies examined the viability of a mining operation which will access the ore body via a take-off from the existing Otter Juan decline, and indicated a production rate of approximately 2,500 tonnes of nickel metal per annum for an initial period of 4 years. The project's economics would be strengthened by the addition of reserves closer to the proposed decline take-off from Otter Juan, and further exploration in this area is planned.