Mirabela Nickel 40% increase in Santa Rita resource



    PERTH, Western Australia, June 14 /CNW/ - Mirabela Nickel Limited
("Company") (TSX - MNB, ASX - MBN) is pleased to announce an updated
preliminary mining investigation for its Santa Rita nickel sulphide deposit.
The updated Potential Mill Feed resource (this is the estimated resource
available as mill feed based upon a pit optimisation study) is:

    
    -   Measured and Indicated - 69.2 million tonnes grading 0.61% Ni
        (925 million lbs)
    -   Inferred - 6.8 million tonnes grading 0.53% Ni (79 million lbs)
    -   Indicative strip ratio 7.7:1
    

    The new tonnage of potential mill feed from the Measured and Indicated
mineral resource categories combined (69.2mt grading 0.61% Ni) represents an
increase of 40% above the previous in-pit Indicated mineral resource (49.5mt
grading 0.61% Ni). This substantial increase exceeds expectations and reflects
positive results from infill drilling and extensions to the mineral resource,
particularly in the southern half.
    The larger tonnage of potential mill feed increases the scale and scope
of the Santa Rita project. In addition to a likely increase in mine life and
throughput rate, a larger project will also improve the economics of a
possible smelter at Santa Rita. This resource upgrade will have a positive
impact on the bankable feasibility study, the results of which are nearly
completed and will be announced shortly. Updated optimisation studies for mine
life and throughput rate have already commenced and the Company is proceeding
with a smelter scoping study.

    Drilling To Date

    The following table summarizes the diamond drilling at Santa Rita
completed to date:

    
    -------------------------------------------------------------------------
    Santa Rita resource                  Drill holes   Approx meters drilled
    -------------------------------------------------------------------------
    Previous (Oct 2006) estimate             244               56,000
    New (June 2007) estimate                 313               73,500
    Total resource drilling to date          340               80,000
    -------------------------------------------------------------------------
    

    The new resource is based on 313 drill holes compared with 244 holes for
the previous mineral resource. A further 27 holes have been drilled since
commencement of the resource estimate, but assays were pending at the cut-off
date so it was not possible to include them. This includes 8 recent holes that
extend the Southern zone deeps with excellent results as recently announced.
    The Company believes the recent Southern Deeps results will add further
resource within open pit limits. The remainder of recent drilling is for the
starter pit, which will convert further Indicated resource to Measured status.
Drilling is ongoing with 4 diamond drilling rigs on-site.

    Updated Global Mineral Resource

    The updated mineral resource estimate for Santa Rita is:

    
                          Mineral resource estimate

    -------------------------------------------------------------------------
                               Million                           Million lbs
    Category  	                 Tonnes         Ni           Cu            Ni
    -------------------------------------------------------------------------
    Measured                      9.6         0.62%        0.15%         131
    -------------------------------------------------------------------------
    Indicated                    79.4         0.56%        0.14%         979
    -------------------------------------------------------------------------
    Measured + Indicated         89.0         0.57%        0.14%       1,110
    -------------------------------------------------------------------------
    Inferred                     15.2         0.51%        0.14%         171
    -------------------------------------------------------------------------
     Weighted average cut-off grade - 0.33% Ni. See Attachment 2 below.
    

    This resource estimate has been independently reviewed by RSG Global
Consulting Pty Ltd in accordance with the Australian JORC Code and the
Canadian CIM guidelines. For technical details in relation to the calculation
of the resources see Attachment 1.

    Updated Potential Mill Feed Resource

    A scoping level pit optimisation study has been completed for the Santa
Rita deposit by independent consultant, Croeser Pty Ltd. This study is based
on the current resource estimates, including the Inferred mineral resources.
The reader is cautioned that Inferred resources are, by definition, of
insufficient confidence to have economic considerations applied that would
enable them to be categorised as mineral reserves, and there is no certainty
that this preliminary assessment will be realised in respect of such
resources. In the present case, the Inferred resources comprise only 9% of the
total resource estimate.
    Pit optimisations are used to determine a pit shape, a mineral resource
available within open-pit limits, and the corresponding economics using
assumptions for revenues, costs and recovery. The updated pit optimisation
result below has been calculated using the following parameters:

    
    -   The latest operating costs from the bankable feasibility work;
    -   New pit slopes;
    -   A nickel price of US$6.00/lb; and
    -   Similar cut-off grades as previously used.

     Potential Mill Feed resource estimate (indicative strip ratio 7.7:1)

    -------------------------------------------------------------------------
                               Million                           Million lbs
    Category                    Tonnes         Ni           Cu            Ni
    -------------------------------------------------------------------------
    Measured                      8.5         0.65%        0.16%         122
    -------------------------------------------------------------------------
    Indicated                    60.7         0.60%        0.15%         803
    -------------------------------------------------------------------------
    Measured + Indicated         69.2         0.61%        0.15%         925
    -------------------------------------------------------------------------
    Inferred                      6.8         0.53%        0.15%          79
    -------------------------------------------------------------------------
       Includes 5% ore loss. Weighted average cut-off grade - 0.38% Ni.
                           See Attachment 2 below.
    

    Preliminary pit optimization and economic studies indicate that this is
the preferred Potential Mill Feed resource estimate for the Santa Rita
project. This represents an increase in the life of the Santa Rita project by
5 years from 14 years to 19 years.
    The resource increase is mostly attributable to wider mineralization in
the Central zone deeps and an extension of the resource in the Southern zone.
Since the October 2006 resource calculation, the Company has announced
favourable drilling results in the Central and Southern zone deeps and the
Company is pleased that these results have translated into a substantial
uplift in potential mill feed.
    There have been two major changes to pit optimization parameters: a
reduction in the pit slope angles (negative impact) and an increase in assumed
nickel price from US$4.75/lb to $6.00/lb (positive impact). Both changes have
a significant impact on the potential mill feed estimate.
    Due to the larger pit size and more detailed geotechnical analysis and
pit design parameters, the Company has adopted a more conservative position on
pit slopes. As a result, the average pit slope angles have been reduced by
approximately 5 degrees, which increases the strip ratio.
    The increase in assumed nickel price to $6.00/lb is more consistent with
the current nickel price outlook and expectations. This allows the project to
bear a higher strip ratio, more than offsetting the impact of more
conservative pit slopes.

    Additional pit optimization results

    Additional pit optimization results have been run to understand project
risk and economics at different stages of the Santa Rita project. The
following potential mill feed tonnages are subsets of the above Potential Mill
Feed resource estimate:

    
             Starter Potential Mill Feed (indicative strip 2.9:1)
    -------------------------------------------------------------------------
                              Million                            Million lbs
    Category                   Tonnes          Ni           Cu            Ni
    -------------------------------------------------------------------------
    Measured                      5.9         0.67%        0.16%          87
    -------------------------------------------------------------------------
    Indicated                     9.7         0.62%        0.15%         132
    -------------------------------------------------------------------------
    Measured + Indicated         15.6         0.64%        0.15%         219
    -------------------------------------------------------------------------
       Includes 5% ore loss. Weighted average cut-off grade - 0.38% Ni.
                           See Attachment 2 below.


           Mid Project Potential Mill Feed (indicative strip 4.6:1)
    -------------------------------------------------------------------------
                              Million                            Million lbs
    Category                   Tonnes          Ni           Cu            Ni
    -------------------------------------------------------------------------
    Measured + Indicated         37.5         0.60%        0.15%         498
    -------------------------------------------------------------------------
    Inferred                      1.0         0.46%        0.14%          10
    -------------------------------------------------------------------------
       Includes 5% ore loss. Weighted average cut-off grade - 0.38% Ni.
                           See Attachment 2 below.
    

    The starter pit demonstrates a higher grade and lower strip in the first
4 years of the project, which assists rapid pay back of capital invested. The
middle pit demonstrates the availability of lower strip ratio ore at 4.6:1 for
the first approximate 10 years of mine life assuming a production rate of
4mtpa.

    Comparison with previous preliminary mining investigations

    The following table has been compiled to provide a direct comparison with
the October 2006 preliminary mining investigations using the same pit
optimization parameters, including the old pit slopes and a nickel price of
US$4.75/lb, to generate a pit with the same strip ratio.

    
     Comparison with previously reported estimate of Potential Mill Feed
                       (indicative strip ratios 5.9:1)

    -------------------------------------------------------------------------
                              June 2007         December 2006
    Resource Category          estimate           estimate         % change
                           -------------------------------------
                           Tonnes        Ni     Tonnes        Ni
    -------------------------------------------------------------------------
    Measured + Indicated     67.0     0.62%       49.5     0.61%       + 35%
    -------------------------------------------------------------------------
    Inferred                  3.6     0.50%        6.2     0.55%
    -------------------------------------------------------------------------

    On a like for like basis there has been a 35% increase in potential mill
feed categorised as Measured and Indicated comprising an additional 17.5 mt of
resource.

    Potential Mill Feed using lower cut-off grades

    Pit optimization studies have looked at the impact of reducing the
weighted average cut-off grade from 0.38% to 0.33% Ni. The results are as
follows:

        Potential Mill Feed resource estimate at lower cut-off grades
                       (indicative strip ratio 6.2:1)

    -------------------------------------------------------------------------
                              Million                            Million lbs
    Category                   Tonnes          Ni           Cu            Ni
    -------------------------------------------------------------------------
    Measured                      9.6         0.62%        0.15%         131
    -------------------------------------------------------------------------
    Indicated                    72.5         0.56%        0.14%         895
    -------------------------------------------------------------------------
    Measured + Indicated         82.1         0.57%        0.14%       1,026
    -------------------------------------------------------------------------
    Inferred                      9.5         0.47%        0.13%          98
    -------------------------------------------------------------------------
       Includes 5% ore loss. Average weighted cut-off grade - 0.33% Ni.
                           See Attachment 2 below.
    

    This lower cut-off potential mill feed falls within the same pit shape as
the higher cut-off potential mill feed. Accordingly, an additional 15.6mt
grading 0.35% Ni of low grade mineralization is available for almost no
incremental mining cost. Economic modelling indicates this low grade material
at surface is cashflow positive and should be stockpiled and processed at the
end of the project. Alternatively, this additional material could be used to
expand the throughput rate for the project without the need to change the rate
of mining.
    The addition of this low grade material potentially increases the Santa
Rita project life by 4 years to 23 years assuming a 4mtpa throughput rate or,
alternatively, an increase in throughput to 4.8 mtpa whilst maintaining the
same mining rate.

    Extended Deeps drilling program

    The Company has commenced an Extended Deeps drilling program to convert
the Inferred portions of the Potential Mill Feed resource estimates to
Indicated status and to further extend the mineral resource in the Southern
Deeps area where drilling is still relatively shallow. This program will
comprise about 22 holes for 8,500m and take about 2 months to complete.
    The Company intends to convert the Potential Mill Feed resource to a
Proven and Probable Reserve upon completion of the Extended Deeps program.
Accordingly, finalization of the pit model and scheduling and announcement of
a mineable reserve is expected to be completed in about 4 months time. In the
meantime, there is sufficient information to conclude the bankable feasibility
study for Santa Rita based on the Potential Mill Feed resource.

    Increase in concentrator throughput rate now likely

    The larger potential mill feed tonnage substantially increases the life
of the Santa Rita project, thereby improving the benefits to be obtained from
additional capital investment such as an increase in throughput rate for the
concentrator and the addition of a smelter.
    A preliminary study recently undertaken indicates that for relatively
modest additional capital (less than US$10m), the Company should be able to
increase throughput of the concentrator to approximately 4.8 mtpa about 12
months after commissioning. Although the initial nameplate capacity of the
plant will remain 4 mtpa, it is now likely this throughput increase will
become a firm plan as part of the Company's decision to mine.

    Smelter study being advanced

    The larger potential mill feed tonnage improves the economics of building
a smelter on-site. As previously announced, the Company is undertaking a
scoping study into building a smelter with capacity of about 150,000 tpa
concentrate. The smelter would be commissioned after the concentrator and take
advantage of both the strong cash flows and the established infrastructure of
the existing project.
    The smelter would convert the Santa Rita concentrates grading 12-13% Ni
into a matte grading 50-60% Ni, thereby attracting a higher payability and
substantially reducing transport costs. Preliminary studies suggest that
Ausmelt technology could be used to lower capital and operating costs,
particularly at this relatively small scale. It might also provide better
operating conditions to handle the MgO in the Santa Rita concentrates.
    The Company is working closely with Ausmelt to undertake more detailed
studies into this concept and will announce results of this work as they come
to hand.

    The information in this report that relates to Mineral Resources and
Exploration Results is based on information compiled by Lauritz Barnes who is
a Member of The Australian Institute of Geoscientists, and Brett Gossage, who
is a Member of The Australasia Institute of Mining and Metallurgy. Lauritz
Barnes is consultant to Mirabela Nickel Limited. Brett Gossage is the Manager
Resources of RSG Global Consulting Pty Ltd, independent resource consultants
engaged by Mirabela Nickel Limited.
    Lauritz Barnes and Brett Gossage have sufficient experience which is
relevant to the style of mineralization and type of deposit under
consideration and to the activity which he is undertaking to qualify as a
Competent Person as defined in the 2004 Edition of the 'Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserve' and are
each a Qualified Person in accordance with NI 43-101. Lauritz Barnes and Brett
Gossage consent to the inclusion in the report of the matters based on their
information in the form and context in which it appears.
    The information in this report that relates to pit optimization and
scheduling studies is based on information compiled by Roselt Croeser who is a
Member of The Australasia Institute of Mining and Metallurgy. Roselt Croeser
is a consultant to Mirabela Nickel Limited. Roselt Croeser consents to the
inclusion in the report of the matters based on his information in the form
and context in which it appears.
    All other technical information in this report has been reviewed by
Nicholas Poll, who is a Member of The Australasia Institute of Mining and
Metallurgy. Nicholas Poll is the Managing Director of the Company. Nicholas
Poll consents to the inclusion in the report of the matters based on his
information in the form and context in which it appears.

    Attachment 1: Technical background on resource estimate

    The resource has been classified in accordance with Canadian Institute of
Mining, Metallurgy and Petroleum (CIM) guidelines and with reference to the
criteria set out in the Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves (JORC Code, December 2004). The
estimation has been carried out by a Competent Person from the Company and a
Competent Person from RSG Global Consulting Pty Ltd (RSG Global) in accordance
with the Code and as such is suitable for inclusion in a public report. Also,
each is a Qualified Person in accordance with NI 43-101.
    In total, the grade interpolation dataset used for the resource estimate
consisted of 313 diamond holes. All drill core has been logged in detail for
lithological and structural information. Nickel and multi-element assaying has
been completed on half core samples using inductively coupled plasma atomic
emission spectroscopy (ICP-AES) and inductively coupled plasma mass
spectroscopy (ICP-MS) methods with appropriate collectors (for example 30g
fire assay for Pd, Pt and Au). All assaying is accompanied by rigorous
submission and analysis of QAQC samples. An extensive specific gravity
database has been collected by weighing of diamond core in air and water.
    The resource model was derived via geological and mineralisation zone
modelling of the deposit. Estimation involved the application of Ordinary
Kriging in panels of 20m E-W by 25m N-S by 5mRL for Ni, Cu, Co, Pd, Pt, Au,
Fe, Mg and S with Uniform Conditioning change of support for Ni only for a
base case selective mining unit of 5mE by 10mN by 5mRL. Technique selection
was based on the quantity and spacing of available data, and the interpreted
controls on, and styles of, mineralisation under review.

    Attachment 2: Details on cut-off grades used

    A variety of cut off grades are required for each ore type, because they
vary in olivine content. Olivine contains non-sulphide nickel that is not
recoverable (silicate nickel), so lower olivine content increases nickel
recovery and reduces the corresponding cut-off grade. Mineral resource grades
reflect the combined sulphide and silicate nickel content, because assay
technology is not accurate enough to measure sulphide nickel content alone for
mineral resource estimation.
    There are four different types of mineralised rock. Each has a different
cut-off grade depending on its non-sulphide nickel content. Pyroxenite has a
low cut-off grade to reflect low olivine and low non-sulphide nickel content,
whereas dunite has a high cut-off grade to reflect high olivine and high
non-sulphide nickel content. The table below provides a breakdown of the
resource rock types, their associated cut-off grades and a comparison with the
previous (October 2006) estimate.

    
       Comparison of cut-off grades between new and previous potential
                             mill feed tonnages

    -------------------------------------------------------------------------
                                     June 2007              October 2006
                                      estimate                estimate
                                ---------------------------------------------
                                 Percentage  Cut-off     Percentage  Cut-off
    Host rock type              composition    grade    composition    grade
    -------------------------------------------------------------------------
    Pyroxenite                           41    0.35%             30    0.35%
    Olivine Orthopyroxenite              15    0.40%           32.5    0.40%
    Harzburgite                          40    0.40%           32.5    0.40%
    Dunite                                4    0.50%              5    0.50%
    Weighted average
     cut-off grade                     100%    0.38%           100%    0.39%
    -------------------------------------------------------------------------

    The average cut-off grade for the new resource has been slightly reduced,
compared to the October 2006 resource to reflect an increase in the percentage
composition of pyroxenite from 30% to 41% in the new resource.
    In addition, a lower resource cut-off grade has been used as set out
below:

                        Details for lower cut-off grade

            --------------------------------------------------------
                                                Lower cut-off grade
                                                      resource
                                               ---------------------
                                                Percentage  Cut-off
                 Host rock type                composition    grade
            --------------------------------------------------------
            Pyroxenite                                  41    0.30%
            Olivine Orthopyroxenite                     15    0.35%
            Harzburgite                                 40    0.35%
            Dunite                                       3    0.45%
            Weighted average cut-off grade            100%    0.33%
            --------------------------------------------------------
    





For further information:

For further information: Nick Poll, Managing Director, Telephone: +61 8
9324 1177

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Mirabela Nickel Ltd.

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