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Shakespeare Nickel Project
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Developing The Shakespeare Nickel Project
(Windows Media)
This 11 minute and 30 second video shows the construction of the Shakespeare access
road and development of the Shakespeare Project in February of
2007.
To download, right-click and choose "Save
target as" (Windows) or Option+Click link (Mac).
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The model shows the Shakespeare Project from the Micon
feasibility study.
The mineral resource (red and green) has been
defined by drilling (orange traces). The mineral reserve is
contained within the open pit shells. The mill building and
infrastructure are shown in purple.
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The Shakespeare nickel project is located 70 km west of Sudbury,
Ontario, is currently in a pre-production mining stage of development.
URSA Major completed the trucking of a 50,000 tonne bulk sample from
the Shakespeare West Deposit in October 2007. Batch processing of the
sample at Xstrata’s Strathcona mill was completed in October 2007, and
in November 2007 blending tests with Shakespeare ore and Strathcona ore
feed were also completed. Based on mill balances, the batch test
processed 45,487 dry metric tonnes (dmt) of ore with a head grade of
0.40% nickel, 0.46% copper, 0.026% cobalt, 0.186 g/t gold, 0.378 g/t
platinum, and 0.483 g/t palladium. Overall nickel and copper recoveries
into concentrates were 76.20% and 89.42% respectively. Cobalt recovery
into concentrate was 60.03%. Gold, platinum and palladium recoveries
into concentrate were 62.56%, 66.12%, and 46.28% respectively. The batch
ore sample produced 124.22 tonnes contained nickel in nickel
concentrate, 186.86 tonnes contained copper in both copper concentrate
and nickel concentrate, and 6.31 tonnes contained cobalt in nickel
concentrate. Contained gold, platinum and palladium are 5.30 kg (170
oz.), 11.38 kg (366 oz.), and 10.18 kg (327 oz.) respectively.
The 5,329 dmt blended ore sample produced additional 12.57 tonnes of
recovered nickel, 20.25 tonnes of recovered copper, and 0.71 tonnes of
recovered cobalt, all in concentrate, plus additional precious metals.
In December 2007, the Company signed an agreement with Xstrata that
provides for the further treatment of ore from the Shakespeare nickel
deposit at Xstrata’s Strathcona Mill. URSA Major resumed shipments of
ore to Xstrata in February 2008 and currently has an additional 50,000
tonne batch of ore from the Shakespeare property awaiting processing.
The batching of ore through the mill is expected to take place in May
2008, subject to confirmation of Xstrata’s milling schedule and weekly
production profile. After the current batch sample, Xstrata has agreed
to treat Shakespeare ore at the Strathcona Mill on a blended basis. The
initial target blending rate is 500 tonnes/day and this may be
increased. Xstrata will treat the blended ore for a period of at least
12 months from April 1, 2008 with Xstrata, giving 4 months notice of
cancellation of treatment. The blended ore shipments are anticipated to
commence in June 2008.
URSA Major completed the Shakespeare project feasibility study in
January 2006. Micon International Limited (Micon) evaluated the base
case of an open pit mine and a 4,500 tonne/day on-site concentrator. In
Micon’s opinion, “Shakespeare project contains an economic mineral
reserve and is worthy of continued development through detailed
engineering and construction to produce 4,500 t/d of ore mining and
subsequent concentrate for sale.” Subsequent to the year ended January
31, 2008, Micon has completed an update to the feasibility study to take
into account changes in metal price outlook, marketing of separate
nickel and copper concentrates, a treatment and refining contract, and
escalation of capital and operating costs since the original feasibility
study was published in January 2006.
At conservative metal prices including nickel at an average of
US$9.37/lb, the project is projected to yield an after tax internal rate
of return (IRR) of 22.6% (29.1% pre-tax IRR) on an initial total capital
cost of C$148,193,000. Net revenue (NSR) is $58.89/tonne and totals
C$696,331,000 for the project. Total operating cost is C$26.64/tonne
milled. The undiscounted total annual cash flow (NPV) is C$169,581,000
and the NPV discounted at 8% is C$73,297,000. The project has a 7.2 year
mine production life. The economic analysis makes the conservative
assumption of a reversion of metal prices from current levels to their
10-year historical median Canadian dollar prices, expressed in 2007
terms. Current price levels are assumed to regress exponentially toward
the median, with a ‘decay’ half-life of three years. The resulting
average prices over the life of the project, expressed in 2007 dollars,
are nickel US$9.37/lb, copper US$2.11/lb, cobalt US$27.57/lb, platinum
US$995.52/ounce, palladium US$342.49/ounce, gold US$563.27/ounce. The
base exchange rate for the economic analysis is taken from the average
of over 9 months of 2007, for a rate of C$1 = US$0.9052.
The feasibility study has defined a diluted Probable Reserve of
11,828,000 tonnes grading 0.33% nickel, 0.35% copper, 0.02% cobalt, 0.33
g/t platinum, 0.36 g/t palladium and 0.18 g/t gold. The mineral reserve
is to a maximum depth of 250 metres below surface and was determined by
applying a C$12.84/tonne NSR internal cut-off value which is derived
from the sum of the milling and G&A costs. The reserve is based on an
Indicated Resource (undiluted) of 12,430,000 tonnes grading 0.35%
nickel, 0.37% copper, 0.02% cobalt, 0.35 g/t platinum and 0.39 g/t
palladium and 0.20 g/t gold. This Indicated Resource is contained within
an optimized pit shell with an NSR cut off above C$24.23. An additional
Indicated Resource of 1,830,000 tonnes grading 0.37% nickel, 0.41%
copper, 0.03% cobalt, 0.36 g/t platinum, 0.39 g/t palladium and 0.22 g/t
gold at an NSR cut off of CDN$50/tonne is located outside of the pit
shell. The majority of the Indicated Resource is down plunge to the east
of the pit shell. Mr. Terrence Hennessey, P.Geo, of Micon is the
qualified person for the resource estimate. Mr. Eugene Puritch, P.Eng.
of P&E Engineering is the qualified person for the reserve estimate. Mr.
Ian Ward, P.Eng. of Micon is the qualified person for the feasibility
study.
URSA Major engaged Golder Associates Ltd. in early 2006, to manage
environmental baseline studies and permitting activities. In November
2007, the Company announced that it had received permits from the
Ontario Ministry of the Environment including a Permit to Take Water,
Certificate of Approval for noise and air emissions, and a Certificate
of Approval for the Shakespeare Mine and Mill co-disposal facility and
sedimentation pond for water treatment. The Company also announced the
acceptance of a certified Closure Plan for the Shakespeare Mine and Mill
Project from the Ontario Ministry of Northern Development and Mines (MNDM)
on September 12, 2007.
The Company continues to carry out surface and groundwater sampling,
weather monitoring, and stream flow monitoring as part of on-going site
monitoring activities. The Company also has received a permit from the
Ontario Ministry of Natural Resources (MNR) for the operation of a
gravel pit located approximately 3 km north of the Shakespeare
nickel-copper project, in the Sudbury area of Ontario. The 290 acre (120
ha) gravel pit will be used as an aggregate source for site improvements
and construction at the Shakespeare project.
In addition to custom milling of Shakespeare ore at the Strathcona Mill,
URSA Major has an agreement with Xstrata that provides terms for the
smelting of URSA Major’s concentrates for a period of seven years.
In the first half of 2007, the Company completed significant upgrades to
the access road into the Shakespeare deposit making it an all weather
gravel road that allows for trucking access and future mining
operations. This road facilitated the bulk sample haulage and further
development of the property. The Company has also completed a number of
site improvements including building a crusher pad and truck loading
area, building an access road to the Shakespeare West pit area, and road
building, stripping and grubbing in preparation for construction of a
sedimentation pond for mine water management. This work has been
ongoing.
URSA Major currently has a 100% beneficial interest in the Shakespeare
project area which contains all of the Shakespeare reserves and
resources and is subject to a 1.5% royalty in favour of Xstrata. The
Shakespeare project area is partially surrounded by an exploration
property that is the basis of a joint venture between URSA Major and
Xstrata with URSA Major as the project operator. URSA Major has an
approximately 80% beneficial interest in the joint venture area. |
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