25/01/2008 - 12:56

Heron forced to revise Jump-up Dam project

25/01/2008 - 12:56

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Nickel hopeful Heron Resources Ltd has placed its Jump-Up Dam heap leach operation on care and maintenance, after results of a pre-feasibility study concluded the process did not make an adequate return on investment on the back of rising costs.

Nickel hopeful Heron Resources Ltd has placed its Jump-Up Dam heap leach operation on care and maintenance, after results of a pre-feasibility study concluded the process did not make an adequate return on investment on the back of rising costs.

Significant increases in the cost of acid, as well as increased labour, construction and oil costs, saw the estimated capital expenditure rise to $A681.9 million, almost 50 per cent higher than indicated by a scoping study completed in April 2007.

This translates to a 56 per cent increase in operating costs to $A6.39 per pound of production.
With the trial mining expected to continue, Heron said it would now assess alternative option for the project, including the possibility of using atmospheric leach technology.

While the PFS focused on the heap leach process, the company has also been running a parallel scoping study based on atmospheric leach technology for the past year.

Heron will evaluate more fully the atmospheric leach option to optimize the economics of the project, at an estimated cost of about $4 million.

To date, the company had spent in the order of between $5-6 million on the heap leach aspect of the project.

Heron managing director Mathew Longworth said the significant escalation in costs over the past 10 months has seen a lot of the cost benefits associated with heap leach to process low-grade laterite nickel eroded.

Atmospheric leaching is a more commercial process than heap leach as it applied to nickel, and is being utilized at the Cawse and Ravensthorpe nickel operations

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