Canadian Arrow Mines issues revised Preliminary Economic Assessment (PEA) Study for Kenbridge Nickel Project

    SUDBURY, ON, Jan. 21 /CNW/ - Canadian Arrow Mines, Ltd. (CRO: TSX-V) (the
"Company") has received an updated, positive Preliminary Economic Assessment
Study (PEA) for the Kenbridge Nickel Project near Kenora, northwestern
Ontario. This release is revised from the January 14th PEA release and
reflects changes to project resources and economics due to the discovery of a
coding error in the resource estimating software. Also included in this
revised news release are further details and cautionary statements.

    Highlights of the updated PEA include:

    -   Open pit amenable resources of 6.7 million diluted tonnes grading
        0.38% Ni and 0.23% Cu with a waste to ore stripping ratio of 1.87:1
        to a depth of 160m below surface
    -   Resources amenable to underground mining totaling 3.0 million diluted
        tonnes grading 0.63% Ni and 0.32% Cu
    -   A combined open pit/underground mining operation supplying
        2,800 tonnes per day to an on-site concentrator
    -   Open pit mining costs of $9.60/ore tonne, underground mining costs of
        $41.44/tonne, processing costs of $10.39/tonne and G&A costs of
        $2.59/tonne of ore
    -   Average cash cost/lb of $4.89 nickel net of byproducts
    -   Total recoverable metal production of 71.2 million lbs of nickel and
        49.6 million lbs of copper over a 10.5 year mine life
    -   Pre-production capital cost of $108 million including a 15%
    -   Pre-tax Net Present Value (NPV) of $134 million at a 7.5% discount
        rate, ranging from $236 million to $32 million with +/- 20% change in
        metal pricing
    -   33% Internal Rate of Return (IRR), ranging from 51% to 14% with
        +/- 20% change in metal pricing
    -   Economics based on an average $10.00 US/lb nickel, $2.50 US/lb copper
        and $1CDN:$0.9US

    The report is co-authored by WMT Associates of Oakville, Ontario, P&E
Mining Consultants of Brampton, Ontario and Micon International Limited of
Toronto, Ontario.
    The PEA is based on the updated technical report and deposit model of
mineral resources completed by SRK Consulting (Canada) Inc., released on
January 9th, 2008 and differs only by applying a more realistic cut-off
methodology. Resource estimates completed by SRK as shown in Table 2 used
arbitrary grade cut-off values not based on mine economics. The PEA estimate
by contrast has input current industry mine operating costs, anticipated metal
recoveries, mining dilution, metal values and other economic parameters to
derive a Net Smelter Return (NSR) model to determine the break between ore and
waste. The new estimate, using computer aided open pit optimization tools, has
also resulted in an increase in depth of the open pit by 10 metres to the
1350m elevation, (160m from surface). A copy of the full PEA report will be
available on the SEDAR website within 45 days of the January 9th press
release. The PEA was prepared by WMT Associates, P&E Mining Consultants Inc.,
and Micon International Limited, all independent consulting firms, under the
direction of Mr. Malcolm Buck, P. Eng. of WMT Associates, a qualified person
as defined by National Instrument 43-101 . Mr. Buck has reviewed and approved
of the technical content of this news release.

    Table 1.PEA Updated Diluted Mineral Resources, Kenbridge Nickel-Copper
Deposit, Ontario, WMT, January 18, 2008

                                                                Contained Ni
    Classification             Tonnes (Mt)    Ni%   Cu%  S.G.         (000't)
    Open pit
    ((greater than) 1350m EL)
    Indicated                6.6             0.38  0.23  2.95   25.3
    Inferred                 0.1 (+/- 20%)   0.50  0.40  2.95    0.5 (+/-20%)

    Underground                                                 Contained Ni
    ((less than) 1350m EL)     Tonnes (Mt)    Ni%   Cu%  S.G.         (000't)
    Indicated                0.8             0.71  0.34  2.95   5.7
    Inferred                 2.2 (+/- 20%)   0.60  0.31  2.95  13.2 (+/- 20%)

    Table 2. Mineral Resource Statement, Kenbridge Nickel-Copper Deposit,
Ontario, SRK Consulting, January 2, 2008

                                                                Contained Ni
    Classification             Tonnes (Mt)    Ni%   Cu%  S.G.         (000't)
    (*)Open pit
    ((greater than) 1360m EL)
    Indicated                         3.4    0.60  0.33  2.95   20.3
    Inferred                 0.1 (+/- 20%)   0.74  0.53  2.95    1.0 (+/-20%)

    ((less than)1360m EL)
    Indicated                        0.3     1.09  0.47  2.95    3.1
    Inferred                 0.7 (+/-20%)    0.89  0.44  2.95    6.0 (+/-20%)

    Total Pit & U/G
    Indicated                3.7             0.64  0.34  2.95   23.4
    Inferred        0.8 (+/- 20%)            0.86  0.46  2.95    7.0 (+/-20%)

    (*) Open pit mineral resources are reported at a cut-off of 0.3% nickel
        while the Underground mineral resources are reported at a cut-off of
        0.7% nickel. These cut-offs have not been verified by metallurgical
        testing or by any mining engineering studies. All figures have been
        rounded to reflect the relative accuracy of the estimates.

    Kim Tyler, President of Canadian Arrow Mines, comments: "This study
indicates the economic viability of Kenbridge Nickel Deposit. The
25,000 metres of diamond drilling completed in 2007 has resulted in a 75%
increase in contained nickel within the open pit component of the
mineralization at comparative grade cut-offs. Based on expected mining costs
and economics, approximately 71.2 million pounds of nickel and 49.6 million
pounds of copper could profitably be recovered. In addition, the resources
defined within the open pit area, including a portion of the underground
mineralization, have been upgraded from Inferred to Indicated classification.
Definition drilling will continue throughout the first quarter of 2008 to
upgrade the underground portion of the deposit to Measured and Indicated
classification towards completing a bankable feasibility study".
    Canadian Arrow Mines has concentrated on completing the necessary steps
to advance Kenbridge to a production decision within the next few months. A
program of securing key capital items has been initiated, including a
production sized mine hoist, head frame and SAG mill. In 2007 a comprehensive
environmental baseline study was undertaken which is expected to be completed
in the first quarter 2008. Inter-agency meetings have begun with Federal and
Provincial regulators and discussions with neighbouring aboriginal communities
and leadership from Treaty No. 3 First Nations are underway.
    Kim Tyler continues "Arrow is focused on developing the Kenbridge Nickel
Project and is pleased with the significant progress made since last April
when we arrived on the site. The PEA indicates Kenbridge has the potential to
become a very profitable operation for Arrow. This study estimates that our
average cost to produce a pound of nickel, net of byproduct credits for
copper, will be $4.89 per lb. This is well below the current price of nickel
of approximately $12 per lb. We are excited about the potential for enhancing
project economics through further metallurgical studies, upgrading the
underground resource with definition drilling and exploration on our numerous
regional properties.
    2008 will be even busier and more exciting than 2007. Surface diamond
drilling will continue to define the orebody to the approximate shaft bottom.
The advanced exploration program will commence as soon as the access trail is
upgraded to an all season road this winter. A headframe is expected to be
installed followed by dewatering of the shaft by mid of 2008. Underground
diamond drilling is expected to commence in late summer to explore the
orebody's open extensions below the shaft and along the south strike. Baseline
environmental as well as all other technical works will be ongoing culminating
in a Bankable Feasibility Study to be completed later this year. Meanwhile,
surface exploration will be shifting away from Kenbridge and onto the regional
exploration targets at Denmark Lake, Glatz and Emmons-Prigg over the winter."
    The PEA is being carried out under the direction of The Company's Vice
President of Operations, Garett Macdonald, P.Eng, MBA, a qualified person as
defined by National Instrument 43-101. The information in this release was
prepared under the direction of R. Kim Tyler, P. Geo., President of the
Company, a qualified person as defined by National Instrument 43-101.

    Cautionary Statements

    Mineral resources are not mineral reserves and do not have demonstrated
economic viability. WMT is not aware of any known environmental, permitting,
legal, title, taxation, socio-economic, marketing or other relevant issues
that could potentially affect this estimate of mineral resources. The
preliminary assessment includes inferred mineral resources that are considered
too speculative geologically to have the economic considerations applied to
them that would enable them to be categorized as mineral reserves, and there
is no certainty that the preliminary assessment will be realized.

    About Canadian Arrow Mines, Ltd.

    Canadian Arrow Mines, Ltd. is an established Canadian exploration and
development Company committed to developing and advancing base metal deposits
close to existing infrastructure through exploration, development and
acquisition. Shares of Canadian Arrow Mines trade on the TSX Venture Exchange
under the symbol "CRO".

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For further information:

For further information: visit the website at,
or call toll free, 1-877-262-6354, or contact: Canadian Arrow Mines, Ltd., R.
Kim Tyler, P. Geo, President, Tel: (705) 673-8259, E-mail:; CHF Investor Relations, Barry Leung, Tel: (416)
868-1079 ext. 247, E-mail:; or Cathy Hume, CEO, Tel: (416)
868-1079 ext. 231, E-mail:

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