Nuinsco sizes up Mel (August 04, 2004)

A program of winter drilling by Nuinsco Resources (NWI-T) has boosted the resource estimate at the Mel nickel deposit, 25 km north of Thompson, Man.

The deposit’s measured and indicated resources are now pegged at 2.7 million tonnes averaging 0.77% nickel. Two-thirds of the resources is categorized as measured, and grades 0.8% nickel. Another 54,446 tonnes of material running 0.61% nickel are classified as inferred resources. Both estimates employ a cutoff grade of 0.5% nickel. The resource is situated at depths between 46 metres and 183 meters.

In 2000, Mel’s resource was estimated at 290,000 tonnes grading 1.7% nickel in the indicated category, plus 260,000 tonnes of inferred material of the same grade. Those estimated are based on drilling to a vertical depth of 230 metres, and a cutoff grade of 1.25% nickel.

“This significant increase in the estimated mineral resource of the Mel Deposit clearly increases the potential of advancing the property to production.

Nuinsco CEO Warren Holmes says that while the revised estimate includes most of the previously identified resource considered for underground mining, there remains potential for additional pittable and underground accessible tonnage.

“Open pit mining will enhance the project economics. The deposit’s close proximity, 40 km by road, to Inco’s Thompson facility is a critical factor making this project attractive,” adds Holmes.

Nuinsco plans to use the new estimate as the basis for a preliminary economic evaluation of mining the upper section of the Mel Deposit via an open pit; underground mining would follow. AMEC will complete the evaluation.

Meanwhile, the company plans to follow up on a previously sunk hole some 600 metres north of the Mel deposit. That hole was designed to test a pulse-electromagnetic anomaly, and returned a 0.92-metre interval grading 1.31% nickel.

Nuinsco can earn a 100% stake in the property from Inco (N-T) by spending $6 million by February 28, 2006; so far, it has spent about $3.4 million. Inco has the right to earn back a 51% interest in the project.