Mirabela - 45% open-pit resource upgrade for Santa Rita


    Ordinary shares outstanding: 129,784,100

    PERTH, Australia, Sept. 4 /CNW/ - Mirabela Nickel Limited (ASX:MBN, TSX
MNB) is pleased to announce an upgraded in-pit resource for the Santa Rita
project comprising:
    -   130 million tonnes at 0.60% Ni & 0.16% Cu (Measured and Indicated)
        for 780,000t of contained Ni
    -   20 million tonnes at 0.60% Ni & 0.16% Cu (Inferred) for an additional
        120,000t of contained Ni
    -   Indicative strip ratio 7.6 to 1

    This represents a 45% increase in the Measured and Indicated nickel
resource compared with the previous November 2007 resource estimate. At a
planned throughput rate of 6.4 mtpa, to produce 27,000tpa of nickel, this
resource represents over 20 years of mine life.
    "This resource increase substantially exceeds expectations and affirms
Santa Rita as a world class nickel discovery." said Managing Director, Nick
Poll. "The Southern deeps high-grade zone made a large contribution to the new
open-pit resource despite being discovered less than 6 months ago and it
remains open at depth. We are seeing consistent improvement in both width and
grade around the base of the open-pit resource right across the entire 2km of
strike length. There is potential for yet another good open-pit resource
upgrade, mainly in the Central zone, and there is very large underground
resource potential."
    The additional 20 million tonnes of Inferred resource lies at the base of
the open pit. If fully converted to Indicated status this would add another
120,000t of Ni to the open-pit resource. As a result, the Company is now
targeting an open-pit Indicated resource between 900,000t and 1,000,000t of
contained Ni. This target is well within reach, due to the continuity of the
ore body and the improvement of width and grade with depth seen in drilling
over the last 6 months.
    "Over 900,000t of contained nickel would make Santa Rita larger than the
current Voisey's Bay open-cut project and about 80% the size of the current Mt
Keith nickel project. These are the two largest open-cut nickel sulphide
projects in the world. Even including underground operations, there are only a
handful of nickel sulphide projects in the world of this size," said Mr Poll.
    In addition to this open-pit resource, the Company is currently drilling
up an extensive underground resource below the Southern deeps high-grade zone.
An Inferred underground resource is due to be completed by November with only
2 holes of the initial program remaining to be drilled. The Company is
studying the potential for this underground resource to drive further
increases in the size of the Santa Rita project.
    Following are additional details on the resource estimate.

    Primary In-pit Resource

    The updated Potential Mill Feed Resource (the estimated resource
available as mill feed based upon a pit optimisation study) is:

                         Potential Mill Feed Estimate
                       (Indicative strip ratio 7.6:1)

                Million                                Pt   Tonnes   Million
    Category     Tonnes       Ni      Cu       Co    (g/t)      Ni    lbs Ni
    Measured       15.1    0.65%   0.16%   0.017%   0.108   98,000       220
    Indicated     115.2    0.60%   0.16%   0.015%   0.092  691,000     1,520
     + Indicated  130.3    0.60%   0.16%   0.016%   0.094  789,000     1,740
    Inferred       19.8    0.60%   0.16%   0.016%   0.086  119,000       265
       Includes 5% ore loss. Weighted average cut-off grade - 0.34% Ni.
                           See Attachment 2 below.

    The new Measured and Indicated resource (130.3mt grading 0.60% Ni)
represents an increase of 45% above the open-pit resource announced in
November 2007 (90.0mt grading 0.61% Ni) and 88% over the open-pit resource
announced in June 2007 (69.2mt grading 0.61%). This substantial increase
exceeds expectations and reflects excellent drilling results extending and
widening the resource in the southern half.
    The maximum depth of the open-pit resource is now 640m, compared with
500m for the previous estimate. The strip ratio remains at 7.6 to 1, due to
the wider mineralization at depth and good geotechnical results that allowed
steepening of the pit walls. The average cut-off grade is lowered to 0.34% Ni
from 0.36% Ni as part of the optimisation process.
    This resource estimate has been independently reviewed by Coffey Mining
Pty Ltd in accordance with the Australian JORC and the Canadian NI 43.101
reporting guidelines. For technical details in relation to the calculation of
the resources see Attachment 1.
    Pit optimisation studies for the Santa Rita resource were undertaken by
independent consultant Croeser Pty Ltd using the following parameters:

    -   The operating costs from the pit optimisation study announced
        November 2007 increased by 10% (representing a 10% reduction in the
        long term exchange rate to US$:1.80 Real)
    -   Latest pit slopes as recommended by Brazil-based geotechnical
        consultants VOGBR
    -   A nickel price of US$7.00/lb (the same as used in the previous
        resource estimate)

    Work is underway to calculate a Proven and Probable Reserve based upon
the Measured and Indicated resource, expected to be announced in October.
    Low Grade Resource
    In addition to the Primary In-pit resource (average cut-off 0.34% Ni)
there is a halo of lower grade mineralisation (average cut-off 0.25% Ni)
within the same pit shell. This lower grade mineralisation is free at surface
as it is mined as waste when the Primary In-pit resource is mined.

              Low Grade Resource - Potential Mill Feed Estimate
                    (within same pit as Primary Resource)

                Million                                Pt   Tonnes   Million
    Category     Tonnes       Ni      Cu       Co    (g/t)      Ni    lbs Ni
     + Indicated   47.0    0.30%   0.07%   0.012%   0.072  141,000       311
    Inferred        6.0    0.30%   0.07%   0.012%   0.071   18,000        40
         Includes 5% ore loss. Weighted average lower cut-off grade
     0.25% Ni and upper cut-off grade 0.34% Ni. See Attachment 2 below.

    Without any mining cost, this Low Grade resource is cashflow positive
through the Mill. However, to maximise the net present value of the project
this mineralisation needs to be processed at the end of the project rather
than displacing the higher cashflows generated by the Primary In-pit resource
in earlier periods. Accordingly, the Low Grade resource will be stockpiled and
treated at the end of the project after all Primary In-pit resource is
exhausted. This will add significant life to the project, especially if
combined with underground resource.

    Drilling To Date

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

    Santa Rita resource               Drill holes      Approx meters drilled
    Oct 2006 resource estimate            244                   56,000
    June 2007 resource estimate           313                   73,500
    Nov 2007 resource estimate            378                   93,750
    Latest Sept 2008 resource estimate    538                  139,450
    Total resource drilling to date       556                  156,100

    The new resource is based on 538 drill holes compared with 378 holes for
the previous mineral resource. A further 18 holes have been drilled since
commencement of the resource estimate, but assays were pending at the cut-off

    Updated Santa Rita Resource Targets

    The favourable drilling results have led to a revision in the target size
of the Santa Rita project. The Company's ongoing drilling programs are now

                                Current     Current
                               Indicated   Inferred    Target      Target
    Santa Rita         Grade      (mt)        (mt)      (mt)    (Ni tonnes)
    Open-pit Resource  0.60%       130         20       150 -   900,000
                                                          170    - 1,020,000
     Resource          0.80%       nil        nil       50 -    400,000
                                                          150    - 1,200,000
    Total                                               200 -   1,300,000
                                                          320    - 2,220,000
    Plus Low Grade
     Resource          0.30%        47          6       50 -

    Santa Rita will almost certainly become a "Million Tonne Monster"
following the announcement of the maiden underground resource, expected by
November this year. The underground drilling is progressing well, with 15
holes drilled and only 2 holes to be completed in the current program, and
excellent results to date. The total underground potential is exceptionally
large and drilling to date has only covered a portion of the prospective area.
    The Company is now pursuing a "40,000 for 25" objective - a production
rate of over 40,000tpa Ni in concentrate with a mine life of at least 25
years. The concept is to increase the plant throughput to 9 mtpa fed
contemporaneously by about 6 mtpa from the open-pit and 3 mtpa from
underground. A life of 25 years would require 150mt of open-pit resource and
75mt of underground resource.
    The Company has commenced feasibility work on the potential underground
resource. Early cashflow from the open-pit could be used to fund the
underground development costs and associated plant throughput increase. The
Santa Rita plant has been designed to enable a potential throughput increase.
It will take about two years to access underground positions with a decline.
Subject to feasibility results, commencement of decline development could
begin early next year.
    A combination of the low grade stockpile and more underground resource
could add a further 10 year tail to the project, albeit at a lower nickel
production rate, for a total potential life of over 35 years. Although not
fully recognised in a simple discounted cash flow calculation, long life, low
cost, nickel sulphide assets are rare and strategically valued in an industry
where the prize assets are tightly held. This is particularly so given
recently revealed high costs and risks of nickel laterite projects. Mirabela
is committed to proving up a long life project and drilling will continue with
5 rigs active.

    Project Construction Update

    Construction of the project is now about 60% complete and the project
remains on target for commencement of production in mid 2009. Construction
works on all the major plant components are well advanced.
    Infrastructure for the crusher and its electrical substation will be
ready to receive the crusher later this month. Foundations have been completed
for the grinding circuits, flotation circuits and thickeners. The sag mill,
ball mill and flotation cells are all on schedule for delivery in December and
construction of the thickeners has commenced.
    Construction of the tailings dam, access roads and bridges, maintenance
and administration buildings, and water facilities are all well advanced.
About 3.7mt of pre-strip material has been removed from the open pit, the
orebody is exposed, and mining of ore will shortly commence.

    Nick Poll                                           Craig Burton
    Managing Director                                   Corporate Director


    Mirabela Nickel Ltd is listed on the Australian and Toronto stock
exchanges. With an open-pit indicated resource of 130mt grading 0.60% Ni,
Santa Rita is the largest greenfields nickel sulphide discovery in the last 12
years world-wide.
    Construction of a nickel sulphide concentrator commenced in November 2007
and is progressing well. The plant is expected to produce 18,500 tpa of nickel
in a sulphide concentrate from one open-cut mine starting from mid 2009
increasing to 27,000 tpa by mid 2010. At this rate of production the project
will have a mine life of at least 20 years.

    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 Senior
Principal with Coffey Mining 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.
    Caution Regarding Inferred Resources: 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 any preliminary assessment will be realised in respect of such
resources. In the present case, the Inferred resources comprise about 13% of
the total resource estimate.
    Caution Regarding Forward Looking Statements: The forward-looking
statements made in this announcement are based on assumptions and judgments of
management regarding future events and results. Such forward-looking
statements, including but not limited to those with respect to resource
targets or the development of an underground mine at Santa Rita and the
Company's estimated future production involve known and unknown risks,
uncertainties, and other factors which may cause the actual results,
performance or achievements of the Company to be materially different from any
anticipated future results, performance or achievements expressed or implied
by such forward-looking statements. Such factors include, among others, the
actual market prices of nickel, the actual results of current exploration, the
actual results of future mining, processing and development activities,
changes in project parameters as plans continue to be evaluated, as well as
those factors disclosed in the Company's filed documents.


    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 Coffey Mining Pty Ltd in accordance with the Code and as
such is suitable for inclusion in a public report.
    In total, the grade interpolation dataset used for the resource estimate
consisted of 538 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 (November 2007) estimate.

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

                          September 2008 estimate   November 2007 estimate
    Host rock type         Percentage     Cut-off    Percentage    Cut-off
                          composition      Grade    composition     grade
    Pyroxenite                 62           0.30%        58          0.32%
     Orthopyroxenite           14           0.35%        14          0.35%
    Harzburgite                21           0.45%        25          0.45%
    Dunite                      3           0.50%         3          0.50%
    Weighted average
     cut-off grade            100%          0.34%       100%         0.36%

    In addition, a lower resource cut-off grade has been used as set out

                       Details for lower cut-off grade

                                               Lower cut-off grade resource
    Host rock type                                Percentage      Cut-off
                                                 Composition       grade
    Pyroxenite                                        61            0.20%
    Olivine Orthopyroxenite                           14            0.25%
    Harzburgite                                       22            0.35%
    Dunite                                             3            0.40%
    Weighted average cut-off grade                   100%           0.25%

For further information:

For further information: Australia contact: Nick Poll, Managing
Director, Telephone: +61 8 9324 1177, nickp@mirabela.com.au; Australia contact
(media): Caroline de Mori, Purple Communications, Telephone: +61 8 9485 1254,
cdemori@purplecom.com.au; Toronto contact (media): Eric Tang, Porter Novelli,
Telephone: (416) 422-7200, eric.tang@porternovelli.com

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