Royal Nickel Corporation - Beta Hunt Mine Gold Production Ramp Up Continues to Exceed Expectations; Infill Drilling and New Toll Milling Arrangement Underway

TORONTO, May 30, 2016 /CNW/ - Royal Nickel Corporation ("RNC") (TSX: RNX) announces that Beta Hunt Mine gold production in May 2016 has reached approximately 65% of the year end mining rate target, which is ahead of the ramp up schedule contemplated in the Beta Hunt PEA technical report. At the end of Q1 2016, Beta Hunt had achieved 58% of the year end mining rate.

"I am pleased with the development progress at the Beta Hunt Mine as gold production continues to ramp up ahead of schedule. We have received encouraging results from the first set of infill drill holes as we upgrade our resource. We continue to evaluate the best long-term option to process gold production from Beta Hunt and have been very satisfied with the initial results from a new tolling agreement which began last week. With the recently developed bonanza grade Hand of Faith ("HOF") zone, targeting of further bonanza-grade zones for mining in 2016, and the strong progress in mine development to date, the mine continues to exceed expectations," said Mark Selby, President and CEO of RNC.

Toll milling of gold under a new arrangement began on May 20, 2016 by HBJ Minerals Pty Ltd (a subsidiary of Metals X Limited). RNC is fortunate to have a range of potential options for treatment of gold production from Beta Hunt and is evaluating these options to determine the best long-term milling solution. Utilizing the smaller HBJ mill is expected to improve results for the treatment of coarse gold, found in higher proportions in bonanza grade areas like the HOF (see RNC news release dated April 21, 2016), which will make up a meaningful proportion of gold production this year.

As of May 26, 2016, the first seven days of the first HBJ toll campaign have been completed and 17,700 tonnes of Beta Hunt development material was processed at a head grade of 2.0 g/t. The mill had an average recovery of 91.4%, in line with expectations. The head grades from the first 7 days of tolling reflect the planned head grades from the ongoing mine development production. Over the balance of the toll campaign, higher head grades are expected as material from higher grade stopes as well as high grade areas such as the HOF are processed.   

It is currently expected that this toll campaign will continue until June 7, 2016, and that a total of approximately 50,000 tonnes of gold production will be treated. RNC will provide further updates on the toll campaign as it progresses.

Beta Hunt Western Flanks/A Zone Drilling Update
An underground infill diamond drilling program for the Western Flanks and A Zone resources commenced in March 2016. Drilling is designed to upgrade the resource classification of the block model to improve the existing mine plan. To May 25, 13 holes were completed for 2,675.7 m of drilling.

  • Assay results are available for 6 holes (Table 1). Results to date support the current resource model. Of significance is drill hole WF14-23 which returned an interval of 4.00m @ 9.0 g/t (0.29 ozs/t) which indicates a potential increase of the existing block model grade in this area.
  • Drilling of the A Zone is planned to commence next month.


 

Table 1: Western Flanks Drilling Results >1g/t Au, April/May 20161,2










Hole ID

Drill
Hole
Collar
Location

End of
Hole
Depth
(m)


Downhole
From (m)

Downhole
To (m)

Interval
(m)

Gold
g/t

Gold
ozs/t

WF16-03

SP 25

155


121.00

125.00

4.00

1.31

0.04


128.00

134.00

6.00

4.36

0.14

IncIuding

129.00

133.00

4.00

5.85

0.19


135.60

141.55

5.95

2.51

0.08

WF16-05

SP25

166.3


151.00

155.00

4.00

1.71

0.05

WF16-08

SP 25

197.6


53.00

54.57

1.57

2.46

0.08


194.00

197.60

3.60

2.34

0.08

WF14-17

SP 22

255


166.00

167.00

1.00

1.42

0.05


176.00

179.00

3.00

5.47

0.18


239.00

241.00

2.00

5.85

0.19

WE14-18

SP22

260.0


188.00

189.00

1.00

6.67

0.21


195.00

196.20

1.90

3.46

0.11


198.60

200.50

1.90

7.45

0.24


243.30

246.50

3.20

2.31

0.07

WF14-23

SP 22

269.2


103.00

104.00

1.00

31.20

1.00


129.50

131.28

1.78

3.94

0.13


223.00

227.00

4.00

9.00

0.29


261.09

266.43

5.34

2.53

0.08

  1. All downhole intervals. True thickness to be determined
  2. All gold assays uncut.

 

Compliance Statement (JORC 2012 and NI 43-101)
The technical information in this news release relating to results at the Beta Hunt Mine is based on information compiled by Steve Devlin, who is a Member of the Australian Institute of Mining and Metallurgy. Mr. Devlin is a full time employee of Salt Lake Mining Pty Ltd and has 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 2012 edition of the "Australasian Code for Reporting of Exploration Results".

Drill core sampling for the Western Flanks resource definition programme was conducted by SLM personnel. Samples are shipped to SGS Mineral Services of Kalgoorlie for preparation and assaying by 50 gram fire assay analytical method. First sample of each sample submission incorporates a barren rock sample as a flush to clean the lab crusher and pulveriser and as a check for contamination. Analytical accuracy and precision are monitored by the analysis of insertion of additional blank material and certified standards. The lab is also required to undertake a minimum of 1 in 20 wet screens on pulverised samples to ensure a minimum 90% passing at -75µm. 

The disclosure of scientific and technical information contained in this news release has also been approved by Alger St-Jean, P. Geo., Vice President Exploration of RNC and Johnna Muinonen, Vice President Operations of RNC, both Qualified Persons under NI 43-101.

About Royal Nickel Corporation
Royal Nickel Corporation is a multi-asset mineral resource company focused primarily on the acquisition, exploration, evaluation and development of base metal and precious metal properties. RNC's principal assets are its majority stake in the producing Beta Hunt nickel and gold mine in Western Australia, the Dumont Nickel Project located in the established Abitibi mining camp in Quebec and a 30% stake in the producing Reed Mine in the Flin Flon-Snow Lake region of Manitoba, Canada. RNC also owns a majority interest in the West Raglan and Qiqavik projects in northern Quebec. RNC has a strong management team and Board with over 100 years of mining experience in the nickel business at Inco and Falconbridge. RNC's common shares and warrants trade on the TSX under the symbols RNX and RNX.WT. RNC also trades on the OTCQX market under the symbol RNKLF.

About SLM
SLM is a private company based in Australian focused on developing mineral properties. Its main asset is the Beta-Hunt nickel-gold mine located in Western Australia.

Cautionary Statement
The decision by SLM to produce at the Beta Hunt mine was not based on a feasibility study of mineral reserves, demonstrating economic and technical viability, and, as a result, there may be an increased uncertainty of achieving any particular level of recovery of minerals or the cost of such recovery, including increased risks associated with developing a commercially mineable deposit. Historically, such projects have a much higher risk of economic and technical failure. There is no guarantee that that anticipated production costs will be achieved.  Failure to achieve the anticipated production costs would have a material adverse impact on SLM's cash flow and future profitability. It is further cautioned that the PEA is preliminary in nature. No mining feasibility study has been completed on Beta Hunt. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that the PEA will be realized.

Cautionary Statement Concerning Forward-Looking Statements
This news release contains "forward-looking information" including without limitation statements relating to RNC further increasing its ownership of SLM and the potential of the Beta Hunt Mine.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of RNC to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could affect the outcome include, among others: failure of the parties to sign definitive agreements and satisfy conditions of closing; future prices and the supply of metals; the results of drilling; inability to raise the money necessary to incur the expenditures required to retain and advance the properties; environmental liabilities (known and unknown); general business, economic, competitive, political and social uncertainties; accidents, labour disputes and other risks of the mining industry; political instability, terrorism, insurrection or war; or delays in obtaining governmental approvals, projected cash costs, failure to obtain regulatory or shareholder approvals. For a more detailed discussion of such risks and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, refer to RNC's filings with Canadian securities regulators available on SEDAR at www.sedar.com.

Although RNC has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this news release and RNC disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.

SOURCE Royal Nickel Corporation

Image with caption: "Figure 1: Western Flanks Drill plan showing Resource Definition Drilling – completed and in progress. (CNW Group/Royal Nickel Corporation)". Image available at: http://photos.newswire.ca/images/download/20160530_C6655_PHOTO_EN_701757.jpg

For further information: Rob Buchanan, Director, Investor Relations, T: (416) 309-0600, www.royalnickel.com; Mélanie Corriveau (French contact), Community Relations Coordinator, T: (819) 727-3777

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