West Perth-based nickel and gold explorer Australian Mines Ltd has exercised an option to purchase a nickel project south of Leinster from BHP Billiton, paying $500,000 to do so.
West Perth-based nickel and gold explorer Australian Mines Ltd has exercised an option to purchase a nickel project south of Leinster from BHP Billiton, paying $500,000 to do so.
The full text of a company announcement is pasted below
Australian Mines (ASX: AUZ) is pleased to announce that the company has exercised its option to purchase the Marriott's Nickel Project from BHP Billiton (BHP) following excellent infill drill results and encouraging metallurgical recoveries.
The Marriott's nickel project, located 70km south of Leinster by sealed highway, currently hosts an Inferred Mineral Resource of 550,000t at 1.4% Ni for 7,700 tonnes of contained nickel down to a depth of 140 metres.
As under the agreement signed in October 2006, Australian Mines has completed the acquisition of Marriott's by paying BHP A$500,000. A milling and offtake agreement has also been signed for ore to be tolled at BHP's nearby Leinster Mill.
Australian Mines' Chief Operating Officer Mr Brett Young commented, "We are very excited to have acquired Marriott's, and its development is a high priority, given the advanced stage and high prospectivity of the deposit.
"With high prices continuing for nickel, and global supply remaining tight, we are in the fortunate position of generating strong cashflows through our Blair Mine, in turn funding the advancement of our other nickel assets, headed by Marriott's."
The Company is currently conducting an infill and resource definition drilling program to increase the resource size and status with the results so far being highly encouraging.
Presently, 19 holes have been completed of the 29 hole program, with 15 holes already sent to the assay laboratory for analysis. Assay results from three diamond holes have been returned so far with the best results as follows:
- AMMD 020: 27m @ 0.92% Ni from 58 m downhole. (includes 5m @ 1.37% Ni )
- AMMD 035: 5m @ 1.64% Ni from 75.5m downhole (includes 3m @ 2.19 % Ni )
The Company's independent consultant has reported encouraging results from metallurgical testing of mineralised zones from the previous drilling campaign at Marriott's. These tests indicate that nickel recovery by flotation increases with depth as the proportion of total nickel in sulphides increases. Individual recoveries have exceeded 80%.
Further flotation tests on ore composites with waste material to simulate mining dilution, extending to blends with LNO feed material are pending. "The metallurgical tests to date are encouraging given that about 90% of the mineral resource is located from 40 metres depth to 140 metres depth.
"A new Mineral Resource statement will be released when the remaining drilling is completed. The remaining assay results are expected to take a further 6 weeks," Mr Young added.
Further drilling results will be released in July and August 2007
