Aguablanca gives birth (December 16, 2004)

Rio Narcea Gold Mines (RNG-T) has produced its first batch of nickel concentrate from the Aguablanca nickel-copper sulphide project, 80 km northwest of Seville, Spain.

While still in the commissioning phase, the 1.5-million-tonne-per-year processing plant’s grinding circuit and mills are operating at full capacity. The company says contractors are working to fix some minor bottlenecks identified in the flotation circuit’s piping; modifications are expected to take less than a week. Fine-tuning continues, and Rio expects to the plant to hit its stride in early January.

Aguablanca’s progress is about a month behind schedule owing to a 3-week delay in permitting construction of an 18-km power line. The high-voltage power line was energized in late November.

Over its 10.5 years of operation, the mine is expected to annually churn out 8,200 tonnes nickel in concentrate, equivalent to about half the European Union’s current annual output. The concentrate will also include some 6,100 tonnes copper and 23,000 oz. platinum group elements (PGE) as byproducts. A long-term, off-take agreement will see Switzerland’s Glencore International buy all the nickel concentrate produced from Aguablanca until 2010.

Aguablanca’s open-pit reserves stand at 15.7 million tonnes running 0.7% nickel, 0.5% copper, and 0.5 gram PGE per tonne, based on a cutoff grade of 0.25% nickel. Based on limited drilling, Rio figures underground mining at Aguablanca could produce an additional 200,000 to 300,000 tonnes of ore as soon as 2006.