Hard Creek gets updated Turnagain assessment

Vancouver – An updated preliminary assessment for Hard Creek Nickel‘s (HNC-V, HNCKF-O) Turnagain nickel deposit in northern British Columbia paints a positive economic possibility for a 29-year open pit mine operation.

The revised report by engineering firm AMEC Americas significantly boosts a previously estimated 17-year mine life tabled in mid-2006. Revised and expanded geologic interpretation of the main Horsetrail zone was incorporated in the new study as well as inclusion of a peripheral area.

Unlike the earlier report, the updated study is based solely on using a hydrometallurgical process option to recover nickel showing better economic viability versus inclusion of a flotation circuit to produce a concentrate. Hydrometallurgical processing involves pressure oxidizing of the finely ground ore in an autoclave, then leached to produce nickel, cobalt and copper precipitates. A separate copper concentrate will also be produced.

The modeled 50,000-tonne-per-day open pit operation would mine about 516.6 million tonnes averaging 0.163% nickel sulphide, 0.012% cobalt plus copper credits over the project’s life with a 0.44-to-1 strip ratio. Initial focus is on a higher-grade starter pit in the initial five years of an operation to expedite capital payback. Lower grade material mined in the initial phase will be stockpiled for later processing.

Using a 0.1% nickel sulphide cut-off grade, Turnagain contains measured and indicated resources of 489 million tonnes at 0.163% nickel sulphide and 0.012% cobalt plus an additional 560 million inferred tonnes grading 0.152% nickel sulphide and 0.011% cobalt.

Metallurgical recoveries for nickel and cobalt are pegged at 73.6% and 6.5% respectively.

Average annual output is estimated at 20,397 tonnes (45 million lbs.) nickel in nickel hydroxide and 1,301 tonnes (2.9 million lbs.) cobalt in cobalt hydroxide. Additionally, 2,281 tonnes (5 million lbs.) of copper in a sulphide concentrate will also be produced annually.

Capital costs of $1.38 billion are anticipated for construction the mine (almost 60% higher than estimated last year) with ongoing operating costs of $9.42 per tonne of ore milled. Payback is anticipated in 6.4 years along with an internal rate of return of 12.2% and a net present value of $186.9 million using a 10% discount rate.

Metal prices of US$7.50 per lb. nickel, US$11.00 per lb. cobalt and US$1.40 per lb. copper were applied in the base case scenario along with an exchange rate of US$0.95 per Canadian dollar.

One significant caveat for Turnagain to proceed to development is the availability of power from a regional grid. Planned extension of a provincial power grid along the Highway 37 corridor (to Dease Lake) is now in question following the suspension of development by NovaGold Resources (NG-T, NG-X) and Teck Cominco (TCK.B-T, TCK-N) at its Galore Creek copper-gold project.

Shares of Hard Creek Nickel perked up 11% in December 10th trading following the news closing up 11 at $1.10 apiece. The company posts a $66-million market capitalization given its 60.2-million shares outstanding and has a 52-week trading range of 76-$3.26.