Nickel › Wingellina Prospect
The Wingellina Prospect is hosted within ultramafic rocks of the Wingellina layered intrusive complex. Deep oxidation of the ultramafic units comprising the layered complex has resulted in the formation of substantial resources of iron-rich nickel-cobalt oxide mineralisation. Exposures of extensive ocherous clays in soils characterise the presence of outcropping of nickel oxide mineralisation over wide areas of the deposit.
Considerable effort has been devoted to developing good relations with the Ngaanyatjarra Land Council and the Traditional Owners, and to involve them in the development of work programs. Metals X has a strong relationship with the Wingellina Community and continually consults and actively involves the Community in its exploration programs and future objectives of the prospect.
Land access to Wingellina is via an access deed for EL69/535. Negotiations for access to the adjoining EL69/1090 and 1091 titles is currently being discussed and negotiated with the Ngaanyatjarra Land Council.
Work prior to 2005 by previous explorers, primarily Inco Ltd and Acclaim Exploration NL, had outlined a large resource of nickel-bearing oxides within E69/535 (the Wingellina Prospect).
Previous reconnaissance work also intersected PGE mineralisation in pyroxenites within the intrusive complex had returned best results of 2m @ 2.2ppm Pt+Pd in WPRC0060, 3m @ 1.5ppm Pt+Pd in WPRC0083 and 7m @ 1.3 ppm Pt+Pd in WPRC064.
Metals X acquired 100% ownership in the project in early 2006 acquiring the Companies that owned the leases and access agreements.
Metals X has completed significant exploration work on the titles since acquisition including over 50,000 metres of drilling which has improved the quality of the Resource such that the vast majority currently sits within measured and indicated categories under JORC.
The Wingellina deposit is substantial in scale, occurring over widths of up to 600m, along a strike length of some 9 kilometres and to depths of up to 200 (typically 80 - 100m). The mineralised system remains open along strike and there is significant potential for depth extensions in many areas of the deposit that were only previously tested by shallow drilling.
In the main, high grade nickel values are associated with yellow-brown to red-brown ochre-stained limonitic Fe-rich clays that are developed over the ultramafic (primarily dunite) units in the layered sequence. Depth and intensity of weathering appears to be associated with both rock-type and the presence of shears on the contacts with adjacent foliated mafic rocks. High grade cobalt values are associated with discrete bands of manganese oxides within the Ni oxide profiles.
The latest drill data indicates that the Wingellina resource comprises approximately 85% limonitic lithologies (40 - 60% Fe2O3, <2% MgO) mainly in the form of ochreous Fe-rich clays. The balance of the mineralisation comprises saprolitic lithologies (10 - 40% Fe2O3, >2% MgO) in the form of clayey sap-rock and transitional oxide lithologies adjacent to mafic units. This is significant as the metallurgical treatment of limonitic ores lend themselves more to atmospheric leaching and lower acid consumption as opposed to saprolitic ores.
Silcrete comprises about 5% of the limonitic lithologies. The Company is undertaking further assessments in relation to domaining and modelling the various styles of mineralisation within the resource block model as a prelude to metallurgical follow-up sampling and for a more detailed metallurgical appraisal of the resources. However, generally speaking the nickel oxide mineralisation at Wingellina occurs in high Fe limonitic residual clays after weathered ultramafic rocks which typically characterises the low viscosity, limonitic ore types of other nickel oxide deposits.
The bulk of the mineralisation typically has low MgO content of less than 2% and can therefore be classed as a low acid consuming resource. The resource has the potential to be processed in a Low Pressure Acid Leach (LPAL) or even at atmospheric pressure. Relatively high rates of treatment could also be achieved in a High Pressure Acid Leach (HPAL) process due to its indicated low viscosity characteristics.
Metallurgical tests carried out on samples from the project have concluded that recoveries of up to 96% Ni and 96% Co by HPAL ("High Pressure Acid Leaching") after 60 minutes reaction time are achievable from the typical Wingellina ore types. Acid additional of approximately 300kg's per tonne and a temperature of 255 degrees Celsius was determined to be optimal.
Metals X will be moving to full pilot plant testing of the ore process in the final quarter of 2007.
Detailed works as part of the feasibility study in many disciplines are underway.
In parallel with the Wingellina work programs, the Company is continuing with the exploration and evaluation of other nickel oxide targets above untested ultramafic rocks within the prospect. Preliminary exploration activity targeting nickel sulphides within and associated with the Wingellina Prospect will commence.
Scoping Study Results
Metals X has calculated the Identified Mineral Resource estimate for its Wingellina Nickel - Cobalt Limonite deposit at varying cut-off grades:
| 0.5% Ni Cut Off | Million Tonnes | %Ni | %Co | %Fe2O3 |
|---|---|---|---|---|
| Measured | 56.9 Mt | 0.98% | 0.077% | 47.9% |
| Indicated | 125.5 Mt | 0.94% | 0.073% | 45.4% |
| Inferred | 30.8 Mt | 0.95% | 0.070% | 44.5% |
| Total | 213.2 Mt | 0.95% | 0.074% | 45.9% |
| 0.7% Ni Cut Off | Million Tonnes | %Ni | %Co | %Fe2O3 |
|---|---|---|---|---|
| Measured | 47.6 Mt | 1.06% | 0.083% | 49.6% |
| Indicated | 100.5 Mt | 1.04% | 0.078% | 47.4% |
| Inferred | 25.1 Mt | 1.04% | 0.075% | 46.1% |
| Total | 173.2 Mt | 1.04% | 0.079% | 47.8% |
| 1.0% Ni Cut Off | Million Tonnes | %Ni | %Co | %Fe2O3 |
|---|---|---|---|---|
| Measured | 25.4 Mt | 1.23% | 0.093% | 52.0% |
| Indicated | 50.0 Mt | 1.23% | 0.087% | 49.8% |
| Inferred | 11.9 Mt | 1.25% | 0.082% | 47.1% |
| Total | 86.3 Mt | 1.23% | 0.088% | 50.1% |
A feature of the resource is the comparatively high percentage 86% of the resource estimate is in the Measured and Indicated categorisation under the JORC 2004 code.
Metals X has completed a Scoping Study (Product and Economic) on the Wingellina Prospect which shows sound economics and the Company will now move to complete a detailed feasibility study on the project. The accuracy of the Scoping Study is deemed to be -10%/+50%.
The Scoping study was performed by expert consultants in the nickel laterite processing field, Lixiviant Pty Ltd. The study considered two scenarios of mine life, the first being 46 years, effectively mining out the Measured and Indicated resources and the second being limited to a 20 year term, mining approximately half the known resource.
The key outcomes of the study are summarised as follows:
| Process Methodology | High Pressure Acid Leach (HPAL) |
| Product | Mixed Nickel-Cobalt Hydroxide |
| Assumed Ramp Up
Year 1 Year 2 Year 3 Year 4 |
50% 75% 90% 100% |
| Average Mining Grades
Year 1-6 Year 7-16 Year 17-26 Year 26+ |
1.2% Ni, 0.10% Co 1.1% Ni, 0.085% Co 1.05% Ni, 0.075% Co 0.90% Ni, 0.070% Co |
| Metal Price Assumptions
Nickel Cobalt |
US$20,000 per tonne US$15 per pound |
| Metal Recoveries
Nickel Cobalt |
91.2% 86.5% |
| Exchange Rate Assumptions $AUD:$USD | $US0.78 |
| 46 yr Mine Life | 20 yr Mine Life | |
| Average Annualised Prod'n
Nickel (t) Cobalt (t) |
36,111 2,635 |
38.873 2,871 |
| Capital Cost Avg. Capital Cost US$/pound Ni - Equiv. |
A$1.682 Billion $US 0.36/lb |
A$1.682 Billion $US 0.77/lb |
| Operating Cost - average $A p. annum Avg. Oper. Cost $US/tonne Ni - Equiv. Avg. Oper. Cost $US/pound Ni - Equiv. Avg. Oper. Cost $US/pound Ni - after Cobalt Credits |
A$477 Million $US10,300/t $US 4.67/lb $US3.58/lb |
A$480 Million $US9,600/t $US 4.37/lb $US3.26/lb |
| Total Prod'n Cost $US/tonne Ni - Equiv. $US/pound Ni - Equiv. Total Prod'n Cost $US/pound Ni - after Cobalt Credits |
US$ 11,100/t US$ 5.03/lb $US 3.94/lb |
US$ 11,300/t US$5.14/lb $US 4.03/lb |
| Est. Avg. Oper. Surplus - $A per annum | $A330 Million | $A390 Million |
| Est Avg. Prod'n Surplus - A$ p. annum | $A293 Million | $A305 Million |
| NPV (8% nominal) - Pre-Tax | $A5.29 Billion | $A4.23 Billion |
| IRR | 34.1% | 34% |
The Scoping study has been performed at a flat nickel price of US$20,000 per tonne and a flat Cobalt price of US$ 15 per pound.
Metals X has formed a strategic alliance with China's largest nickel producer, Jinchuan Group Limited ("Jinchuan") to advance the development of Metals X's mineral assets, in particular the Wingellina Prospect.
Jinchuan will provide assistance and guidance to the Wingellina feasibility study. Metals X has conditionally agreed for Jinchuan to take off-take rights to the anticipated mixed nickel-cobalt metal hydroxide products from Wingellina.