Analysts applauded Tati Nickel Mine last week, as it gears to embark on the ground breaking ceremony for its hi-tech nickel refinery plan which is enhancing its metal recovery at its operations.
The US $ 630 million (nearly P 4 billion) project, dubbed Activox, is the first of its kind in the world and will soon take-over activities performed by its smelter at Selebi-Phikwe, and other activities in Canada, to be done at Tati Nickel Mine. The groundbreaking ceremony is scheduled to take place in two weeks time.
“This is good for both the country and the company. In other words, it will be putting P 4 billion on the door-steps of Francistown,” Leutlwetse Tumelo, an analyst at Capital Securities, said Thursday.
“This is positive in the sense that the company is looking at the possibility of coming up with one in Nkomati in South Africa, to be followed by another in Australia. That means Botswana and LionOre will be exporting which is very unique,” he added.
The company has run a pilot plant testing its Activox technology. It has plans to roll it out to its 50/50 joint Nkomati nickel project in South Africa with African Rainbow Minerals. A feasibility study into Activox at Nkomati will be completed by mid-2007.
The multi-listed LionOre, which owns Tati Nickel Mine, is in the meantime looking at the possibility of leasing Activox to other regional mines that are aiming to get better value from their copper.
The system uses chemical solution to extract metals from finely ground ore at lower temperature and moderate pressure. It is scheduled to be completed in 2009 and it is expected that it will increase the mines’ production 22,000 metric tons of nickel per annum over its 11-year life span.
LionOre’s Africa Managing Director, Peter Breese, told reporters in September that LionOre’s projected cash cost per recovered pound of nickel at the Activox plant is $1.69, far below the industry average of $3 to $3.80. LionOre is currently producing nickel via third party smelting and refining agreements at $2.87/pound.
The total cost of $620 million, includes a 12 million tonne per annum dense media separator for $114 million, a 25,000 tons per annum, $482 million, Activox refinery and $24 million for power infrastructure.
The dense media separator will be commissioned by mid-2008 and the Activox Refinery by the third quarter of 2009. Full production is forecast for third quarter 2009.
The refinery will be built at the Tati Mine and will be 15 percent owned by the Botswana government, LionOre said.
Further, the company said it had confirmed new substantial deposits at Selkirk at Tati Nickel in Botswana following an initial phase of resource drilling.
The company started the drilling areas surrounding the Selkirk Mine, which has been on care and maintenance since mining operations on the mined-out massive sulphide body (MSB) ceased in 2002. The positive results from the first phase of resource evaluation drilling confirm the presence of a large disseminated sulphide ore body down-plunge of the depleted MSB.
“We are enormously encouraged by the potential of this large resource at Selkirk to substantially enhance the future production profile and longevity of operations at Tati Nickel,” said Colin Steyn, President and CEO of LionOre. “This will undoubtedly contribute positively to the overall project economics of the proposed Activox┬« and DMS (Dense Media Separation) projects at Tati Nickel. Our priority now is to convert this resource into a reserve and we remain extremely confident of extending this new resource even further,” he said.
The drilling has confirmed the continuity of a thick package of gabbro hosted disseminated sulphides
around and down-plunge of the underground mine.
The development gives potential for both open pit and underground mining activities at the site.