| 15 June 2012 - Duluth confirms massive potential of Twin Metals copper/nickel/pgm/gold resource |
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Duluth confirms massive potential of Twin Metals copper/nickel/pgm/gold resource By Lawrence Williams from http://www.mineweb.com/mineweb/view/mineweb/en/page103118?oid=153290&sn=Detail&pid=102055 A new independent technical report from AMEC confirms the vast tonnages and economic grades in the Duluth Metals/Antofagasta Twin Metals base and precious metals project in Minnesota. LONDON (MINEWEB) - We have always been very aware of the enormous potential of the ground held by Duluth Metals in eastern Minnesota on the edge of the old iron range which contains literally many billions of tons of complex ore grade material with significant copper, nickel, platinum group metals and gold content. It has to be one of the world's great mineral deposits - the major problems are permitting and finding the funding to mine it - neither necessarily an easy task nowadays, although one suspects the funding may be the easier of the two given that Duluth has brought in a base metals mining major, Antofagasta, to help it develop and mine a significant part of the resource under the Twin Metals jv (60% Duluth and 40% Antofagasta) banner. On the permitting front there is bound to be considerable opposition to mine development there from environmentalists given it borders on the Boundary Waters recreational area. However Twin Metals reckons it can meet the environmentalists' concerns using modern mining standards, mining the deposit underground to reduce the surface impact and use brownfield sites from old iron range operations to locate some of the key surface facilities. And it has the bipartisan support of the Minnesota legislature behind it, a supportive Minnesota Mines department and local support for providing jobs in an area which is not only a traditional mining one, but also one where there is currently high unemployment. But getting back to the resource itself - we have said here before that it is probably not a case of ‘if' it will be mined, but ‘when'. The world in general, and the U.S. in particular, needs the metals contained in the Duluth Complex, but probably, from the environmentalists point of view the permitting of one mine in the area will undoubtedly lead to others - the thin end of the wedge. Duluth has announced its latest figures on the size and grades as noted in a draft NI 43-101 compliant technical assessment by independent engineering company, AMEC. From this report the economic case for developing a major mine on the area which comes under the Twin Metals jv alone would likely be compelling given the tonnages and grades confirmed. Consider the following factors put out by Duluth Metals in its latest press release regarding the AMEC study: · Amongst the world's largest Cu-Ni-PGM polymetallic sulphide deposits with contained metals (using a 0.3% Cu cut-off) of Indicated 8.0 Billion lbs copper, 2.5 Billion lbs nickel, and 12.1 Million ozs palladium+platinum+gold total precious metals (TPM) and Inferred 13.5 Billion lbs copper, 4.6 Billion lbs nickel, and 15.8 Million ozs TPM. · Using a base case 0.3% Cu cut-off, AMEC estimated Indicated Resource of 726 million tons and Inferred Resource of 1.37 billion tons on the three deposits (Birch Lake, Maturi and Spruce Road) which are approximately 11% of the Twin Metals property block. · In addition to the stated Indicated and Inferred mineral resource tons, AMEC highlights additional Exploration Target areas surrounding Maturi estimating an additional potential of between 1.4 and 2.4 billion tons. These Exploration Target areas represent approximately 12% of the Twin Metals property block. · Within the three zones for which resources are estimated, there exists significant continuous mineralization at higher grades than the global resource. The significance of some of these factors should not be understated in technical terms. The higher grade sections give a mine, or mines, on the deposit the opportunity to boost cashflow in the early stages of mining which would lead to a faster payback and improve the economics on an NPV basis. The fact that this resource as defined is on only a small part of the ground controlled by Twin Metals and given there has been considerable drilling undertaken on areas between the three initial resource targets and on the edges, virtually all of which have shown potential ore grade material, the next resource estimate, due in a couple of months time, looks like it will further enhance the size and metal content from what is already one of the world's mega-resources. And this will still just be on a small part of the ground that falls under the Twin Metals jv. In commenting on the mining flexibility opportunities of the higher grade areas, Vern Baker, Duluth Metals President, noted "The grade-tonnage profile of the deposit is such that evaluating the mineral resource estimate using a (higher) 0.5% Cu cut-off provides an Indicated Mineral Resource of 430 million tons at 0.64% Cu, 0.20% Ni, and 0.68 ppm TPM (TPM = Pt + Pd + Au) in the Maturi deposit; an Inferred Mineral Resource of 495 million tons at 0.62% Cu, 0.20% Ni, and 0.73 ppm TPM in the Maturi and Birch Lake deposits, as well as an additional Inferred Mineral Resource of 101 million tons at 0.57% Cu and 0.21% Ni in the Spruce Road deposit. The relative large tonnage available at increased grade cut-off indicates the potential flexibility in scheduling production to maximize the value of the project." In a phone conversation with Mineweb, Duluth's Chairman and CEO, Chris Dundas emphasised the local and state support for a major mine development on the deposit, but also added that from Duluth's point of view the Twin Metals jv only covers part of the area of interest to Duluth itself. He anticipates drilling commencing on more highly prospective areas to the east of the Twin Metals ground, perhaps as early as August with pending BLM drilling permits expected to be received by then. So far the concentration of activity has been on three separate areas - Birch Lake, Maturi and Spruce Road. However there is already drill evidence of continuity between these three deposits which further enhances the resource potential of the deposit. However Duluth and Twin Metals are not the only companies interested in developing mines on the Duluth Complex. The most advanced in its plans is PolyMet Mining which controls 100% of the NorthMet ore deposit (to the southwest of the Duluth properties) and owns the nearby Erie Plant, a large former taconite crushing and milling facility (34 ball and rod mills) with associated infrastructure. PolyMet is currently in the advanced stages of the environmental review process and its long, slow progress of getting permitting for its project - a low strip ratio open pit with planned annual mill throughput put at 11.6 million tonnes of ore to produce 72 million pounds of copper, 15.4 million pounds of nickel, 0.7 million pounds of cobalt and 106,000 ounces of precious metals. Polymet's long wait in receiving permitting gives an indication of some of the problems facing other potential operators in the area but, as Duluth points out, Polymet is planning an open pit and some of the development parameters are very different. Nevertheless, the progress of PolyMet's permitting applications may well be key to opening up much of the complex for mining and sets out guidelines for other companies to follow. It can be tough being the first in line! Source : http://www.mineweb.com/mineweb/view/mineweb/en/page103118?oid=153290&sn=Detail&pid=102055 |
