Growing in Nickel

Mincor's goal in its nickel business is to lift its production to greater than 20,000 tonnes per annum of nickel metal contained in ore, and to maintain that production rate for the long term.

By early 2008 Mincor had achieved the 20,000 tonne production capacity, and in the first half of Financial Year 2008/09 produced just over 10,000 tonnes. However following the sharp falls in the nickel price induced by the global financial crisis, Mincor took advantage of the unique flexibility inherent in its operating structure to reduce costs by suspending higher cost operations.

Thus while Mincor retains the capacity to produce at its targeted rate, the Company is currently operating at a lower rate of production.

Over the long term, Mincor believes that it owns enough of the Kambalda Nickel District to allow it to maintain its record of finding more ore every year than it mines, thus ensuring the sustainability of its business.

The Kambalda Nickel District has historically been capable of generating more than 35,000 tonnes of nickel metal per annum, as it did consistently between 1970 and 1999 (see below graph). Mincor believes that with a certain minimum landholding in the district, a certain minimum production rate can be sustained over the long term, with new exploration successes continually replenishing production.  Mincor's landholdings in the District are estimated by the Company to cover sufficient of the prospective ground to allow a sustainable production rate of around 20,000 tonnes of nickel metal per annum. The remaining ingredient is effective, well-funded exploration, and Mincor has an outstanding exploration team and a strong budget.

KAMBALDA PRODUCTION SOURCES

 

Mincor's past record of replenishing resources and reserves adds credibility to the Company's goal of long term production sustainability, with mineral resources having grown every year since start of production (see below graphs).