Royalties › Mt Keith Royalty
The production and financial summary of the Mount Keith royalty for the current year compared with previous years is summarised below:
| Mt Keith Royalty | 2006 | 2005 | 2004 |
|---|---|---|---|
| Ni in Concentrate Despatched | 38.1 Kt | 43.7 Kt | |
| Avg. Ni Price Received A$/tonne | 19,048 | 18,721 | |
| Royalty Receipts A$ | 4.45 Million | 2.72 Million | 3.07 Million |
Mount Keith is located approximately 460km north of Kalgoorlie and 96km north of Leinster in Western Australia.
The Mount Keith deposit is a large low-grade disseminated nickel sulphide orebody hosted within Archaean Komatiite terrain. The nickel mineralisation extends for about 2km along strike and has been delineated by drilling to approximately 500m below the land surface. Production from Mount Keith began in 1995 and the operation currently produces concentrate through a plant of 11.5Mtpa capacity.
Metals X receives a royalty of 0.375% of the total contained nickel in concentrate or ore produced and dispatched from the royalty area of approximately 241 square kilometres (Figure 1). The Mount Keith Royalty has no terminal date.
Figure 1 — Mt Keith/Kingston Royalty Area
The price received by Metals X is the lower of the LME Nickel Settlement Price Average or the LME Nickel 3 months seller average, both expressed in US dollars and then converted back into Australian Dollars on monthly average Hedge Settlement rates.
BHP Billiton (formerly WMC) has previously outlined a significant growth strategy for Mount Keith nickel operation. They state that:
The Mount Keith operations will be expanded to add approximately 25,000 tonnes per year of nickel production by 2008/2009. A new circuit will be purpose-built to initially treat over 20 million tonnes of talc and low grade ores from existing stockpiles and subsequently treat similar materials from ongoing operations.
The outcome of this will have a significant positive impact on the annual royalty payments to Metals X.