09/02/2009 - 11:05

Heron's WA nickel project to cost $2.2bn

09/02/2009 - 11:05

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Initial study results into Heron Resources' Kalgoorlie nickel project has estimated capital costs at $US1.5 billion ($A2.2 billion) and a projected mine life of 34 years.

Initial study results into Heron Resources' Kalgoorlie nickel project has estimated capital costs at $US1.5 billion ($A2.2 billion) and a projected mine life of 34 years.

A prefeasibility study conducted by earn-in partner Vale Inco, a wholly owned subsidiary of Brazil's Vale, indicated a project producing 36,000 tonnes of mixed nickel cobalt hydroxide product, through a high pressure acid leach process.

Using that processing method, operating costs have been pegged at $US4.42 per pound using an exchange rate of US75 cents.

Heron said the study only investigated four of the 14 deposits that make up the project.

"In addition, Heron believes that considerable scope exists for further enhancement of the project through the inclusion of resources not considered by the current study, as well as optimisation of ore beneficiation and ore transport options," Heron said.

It added that additional resources could increase project capacity to 50,000t of nickel and improve project economics.

"During the next six months, Heron will complete a detailed review of the PFS and will undertake project financial analysis, using its in house project team which has recently completed the Jump-up Dam and Yerilla nickel laterite studies.

Vale Inco will also conduct their own review of the PFS before a decision to commence with the bankable feasibility study, which is estimated to cost $US50.5 million.

Vale Inco will secure a 60 per cent interest in the project by funding all studies prior to a decision to mine.

Shares in Heron were up one cent to 17c at 13:07 AEDT.

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