Green light for Raglan deposit

At long last, Falconbridge (TSE) is drawing up plans to develop its Raglan nickel project on the Ungava Peninsula of northern Quebec.

However, development is contingent upon completion of related agreements with Makivik Corp. (which represents the local Inuit people) and with the Quebec government (regarding infrastructure funding, environmental permitting, tax issues and other regulatory matters). These negotiations are close to being completed, and Falconbridge does not anticipate any delay in its plans for development.

Paul Severin, Falconbridge’s vice-president of exploration, says one of the main reasons for proceeding with the project was the recent improvement in nickel prices. “We expect nickel prices to hold up until at least the end of the decade,” he tells The Northern Miner.

Raglan ranks as one of the largest undeveloped nickel sulphide deposits in the world. Situated some 300 km above the tree line, it was first discovered in the early 1930s but languished for more than 20 years. Starting in 1955, the area experienced a mini-exploration boom which culminated in Falconbridge’s assuming control and management of the Raglan project in 1966. In 1970, a 280-metre shaft was sunk, and drilling was carried out from crosscuts on the Donaldson deposit at the eastern end of the property. Since 1989, the company has spent some $50 million on the project, including a feasibility study in 1993.

Widespread nickel-copper mineralization occurs in an east-west-striking belt, over a distance of at least 60 km. Geological reserves totaling 18.1 million tonnes grading 3.13% nickel and 0.88% copper have been established at six separate sites.

Falconbridge believes the exploration potential at Raglan to be excellent, and the operation will likely extend beyond the 15-year mine life assumed in the Raglan feasibility study.

A capital expenditure of $486 million will be required to bring the deposit on stream by mid-1998 at a rate of 20,000 tonnes of refined nickel per year, with the cash operating cost estimated at less than US$2 per lb. Ore will be mined and milled at Katinniq, and a concentrate will then be trucked some 65 km north to a port facility at Deception Bay, Que. From there, the Raglan concentrate will be shipped by boat for further processing into nickel and copper matte at Falconbridge’s smelter in Sudbury, Ont. The matte will then be sent to the Nikkelverk refinery in Norway, where $31 million is being spent to increase the annual capacity to 80,000 tonnes (the funding is included in the capital cost).

Based on 1994 production levels, Raglan will increase the refined nickel production from Falconbridge mines by 56%.