Shakespeare
The Shakespeare Nickel Mine is located 70 km west of Sudbury, Ontario. The Company declared commercial production during the year ended January 31, 2011 and the mine was in production for nine months of the year. During the nine months of production ending January 31, 2011, the Company delivered 166,913 tonnes of ore to the Strathcona Mill for processing. Contained metals in the delivered ore for the nine production months ended January 31, 2011, totalled approximately 1,314,000 pounds of nickel, 1,499,000 pounds of copper, 92,204 pounds of cobalt and 1,900 ounces of platinum, 2,100 ounces of palladium, 1,100 ounces of gold and 12,100 ounces of silver. The recovered and contained metals are subject to smelter recoveries and to further smelter deductions.
For the nine production months ended January 31, 2011, the ore averaged 0.357% nickel, 0.407% copper, 0.025% cobalt, and 0.989 gram/tonne precious metals. This is 91% of the average budgeted grade for 2010 that is based on the previous bulk sample and pre-production mined grades 0.39% nickel, 0.44% copper, 0.03% cobalt and 1.1 gram/tonne precious metals.
For the year ended January 31, 2011, the Company recorded gross revenue of $14,866,306 on the sale of metals from the Shakespeare Mine. The Company reported an operating profit for the year ended January 31, 2011 of $2,388,738 on the Shakespeare Nickel Mine.
The feasibility study update 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 C$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.
Click here to download the 2006 feasibility study.
Micon Feasibility Study Model
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.
Review of Exploration and Development Activities
During the year, the Company implemented several site improvements at Shakespeare including construction to complete the sedimentation pond facility and pumping facilities for mine dewatering. Water treatment and monitoring was also carried out. The Company continues to carry out surface and groundwater sampling as part of on-going site monitoring activities.
An updated Shakespeare feasibility study completed in 2008, by 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 and subsequent concentrate for sale". At projected 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 smelter 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 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 update 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 C$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.
The Shakespeare Mine has all permits 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 received acceptance of a certified Closure Plan for the Shakespeare Mine and Mill Project from the Ontario Ministry of Northern Development and Mines ("MNDM") in 2007. 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.
In August 2009, URSA Major signed an Impacts and Benefits Agreement ("IBA") with Sagamok Anishnawbek First Nations ("Sagamok"). The IBA is the first such agreement to be entered into by either Sagamok or URSA Major, and one of only a few in the Sudbury mining camp. For the year ended January 31, 2011, the Company made its first payment to Sagamok under the IBA.
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.
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 approximately an 81% beneficial interest in the joint venture area.
In December 2010, URSA Major initiated a drill program to test the down plunge extension of the Shakespeare East Deposit. An immediate goal of the program is to expand the size of the Shakespeare East Deposit and assess the potential of underground production from this section of the Deposit.
For the nine production months ended January 31, 2011, the ore averaged 0.357% nickel, 0.407% copper, 0.025% cobalt, and 0.989 gram/tonne precious metals. This is 91% of the average budgeted grade for 2010 that is based on the previous bulk sample and pre-production mined grades 0.39% nickel, 0.44% copper, 0.03% cobalt and 1.1 gram/tonne precious metals.
For the year ended January 31, 2011, the Company recorded gross revenue of $14,866,306 on the sale of metals from the Shakespeare Mine. The Company reported an operating profit for the year ended January 31, 2011 of $2,388,738 on the Shakespeare Nickel Mine.
The feasibility study update 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 C$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.
Click here to download the 2006 feasibility study.
Micon Feasibility Study Model
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.
Review of Exploration and Development Activities
During the year, the Company implemented several site improvements at Shakespeare including construction to complete the sedimentation pond facility and pumping facilities for mine dewatering. Water treatment and monitoring was also carried out. The Company continues to carry out surface and groundwater sampling as part of on-going site monitoring activities.
An updated Shakespeare feasibility study completed in 2008, by 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 and subsequent concentrate for sale". At projected 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 smelter 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 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 update 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 C$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.
The Shakespeare Mine has all permits 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 received acceptance of a certified Closure Plan for the Shakespeare Mine and Mill Project from the Ontario Ministry of Northern Development and Mines ("MNDM") in 2007. 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.
In August 2009, URSA Major signed an Impacts and Benefits Agreement ("IBA") with Sagamok Anishnawbek First Nations ("Sagamok"). The IBA is the first such agreement to be entered into by either Sagamok or URSA Major, and one of only a few in the Sudbury mining camp. For the year ended January 31, 2011, the Company made its first payment to Sagamok under the IBA.
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.
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 approximately an 81% beneficial interest in the joint venture area.
In December 2010, URSA Major initiated a drill program to test the down plunge extension of the Shakespeare East Deposit. An immediate goal of the program is to expand the size of the Shakespeare East Deposit and assess the potential of underground production from this section of the Deposit.
