Mines Under Development

Carnilya Hill Nickel Project

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 work commenced in July 2007 and first ore is expected to be produced in January 2008.  The development and initial mining will be carried out by a contractor (RUC Ltd) under the direction of Mincor.

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

Carnilya Hill showing Channel Structures

McMahon Nickel Project

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.

The development of the McMahon Project requires the extension of the existing McMahon Decline and associated ventilation system.  This will provide access to the McMahon Deeps and Ken Far North ore bodies.  Mining will take place via mechanised slot stoping methods as well as traditional Kambalda-style airleg slot-and-rill stoping, with an expected production rate of around 10,000 tonnes of ore per month at full production.

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

At full production the McMahon is expected to generate approximately 2,500 to 3,000 tonnes per annum of nickel-in-concentrate.  Drilling carried out by Mincor has intersected ore-grade nickel sulphides as much as 140 metres down-plunge of the known Mineral Resource, and further significant extensions to the Mineral Resource is considered likely.

First production from McMahon is expected towards the middle of calendar 2008.