Vancouver – Aspiring nickel developer Asian Mineral Resources (ASN-V) has wrapped up the preliminary assessment on its 70%-owned Ban Phuc nickel sulphide project in Vietnam.
After evaluating several open pit and underground development scenarios, the company is leaning towards a 200,000-tonne-per-year underground operation with standard sulphide flotation.
The preliminary assessment reviews an indicated resource of 1.3 million tonnes grading 2.6% nickel and 1.1% copper with additional inferred resources of 200,000 tonnes at 2.6% nickel and 1.3% copper. Over a mine life of 5 years, about 1 million tonnes of the deposit will be processed with metallurgical recoveries of 85.6% for nickel and 95.8% for copper. Projected start-up capital is estimated at US$30 million for the operation.
The study assumed long-term metal prices of US$4.00 and US$1.00 per pound for nickel and copper respectively. An average operating cost of US$2.69 per pound of nickel was calculated factoring in the copper credits. The internal rate of return (IRR) for the operation comes in at 25% and estimated annual net cash flow is US$27.4 million.
At current spot metal prices of US$7.00 per pound for nickel and US$1.00 per pound for copper, project economics show yearly net cash flow of US$127 million and a 105% IRR.
Ban Phuc nickel-copper mineralization occurs within a large ultramafic intrusive. Nickel sulphide layering is evident at the base and walls of the intrusive. Massive sulphide mineralization occurs in a major shear-related vein structure within a hornfels host on the southern margin of the intrusive.
Asian Mineral Resources is now advancing the project to feasibility stage, which is expected to be completed by the end of 2005.
Vietnamese government agencies own the remaining 30% of the project.
With about 38 million shares outstanding, the company posts a market capitalization of $12.5 million at its recent trading level of 33 per share.