Orlando seeks support for nickel projects

Perth-based Orlando Resources NL is seeking to raise $5.25 million though an initial public offering in order to complete a pre-feasibility study, acquire and develop the Sally Malay and Springvale sulphide nickel projects, purchased outright from the Normandy Group Trading.

Orlando managing director Martin Blakeman said that the project could be in production within two years.

“Prospects of raising the money look pretty good,” Mr Blakeman said.

“We recognised an opportunity two years ago when the market was pouring its enthusiasm into the new laterite nickel projects.

“We felt it would take some time for the new and complex technology to live up to its promise and that, combined with a recovery in the Asian region and a strong world economy, led us to believe nickel prices would head significantly higher.”

Orlando has lodged a prospectus with the Australian Securities and Invest-ment Commission for the issue of 26.25 million 20 cent shares with a one-for-two option entitlement.

The company has spent 12 months negotiating and bedding down agreements to acquire the Sally Malay project and surrounding tenements located in the East Kimberley with the aim of becoming a low cost nickel producer within the next two years.

It has also negotiated agreements with Gindalbie Gold and BHP Minerals to take 100 per cent control of the adjacent Springvale tenements. The two projects combined will give Orlando a contiguous land-holding of 538 square kilometres.

Since its discovery in 1973, the Sally Malay project has been held consecutively by two multi-national companies seeking world-class orebodies, but studies carried out by Orlando show a more modest approach to development would be capable of delivering a robust mining operation producing about 60,000 tonnes of nickel concentrate.

Orlando anticipates that about $1.6 million and 12 months will be required to progress previous exploration and design studies to a bankable feasibility stage.

Sally Malay is located 225 kilometres south-west of Kununurra and three kilometres west of the sealed Great Northern Highway.

Initial work carried out by mining giant Anglo American advanced the project through systematic diamond drilling to 900 metres depth.

A series of subsequent studies, based mainly on the original Anglo American data, have outlined an indicated and inferred resource in the upper zone of the deposit of 3.85 million tonnes grading 1.79 per cent nickel, 0.73 per cent copper and 0.10 per cent cobalt to 450m depth. This resource includes a higher grade core zone grading in excess of 2.2 per cent nickel.

“The strong fundamentals for nickel give us confidence Sally Malay can be developed as a low-cost, high-margin operation within a relatively short time frame,” Mr Blakeman said.

“We anticipate an underground operation accessed by a decline with on-site production of concentrates.”

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