venezuelan nickel deposit at the feasibility stage

A feasibility study is nearing completion for the Loma de Hierro nickel laterite deposit, 50 km southwest of Caracas, Venezuela.

About a year ago, Jordex Resources (TSE) signed an agreement allowing Anglo American Corp. of South America (AMSA) to acquire 70% of a Venezuelan company (Cofeminas) which owns the deposit. Jordex has a half interest in Cofeminas and operates the private company.

“The feasibility study is on schedule, and we expect all technical aspects to be completed by or before mid-December (of this year),” said Jordex Chairman Paul Kostuik. “This will be followed by (AMSA’s) financial analysis in the first quarter of 1995.”

The purchase price is based on a US$43.5-million valuation of the nickel deposit. Initial payments gave AMSA a 10% interest, with the remaining 60% to be acquired after the feasibility study is completed.

At last report, the reserve estimate stood at 25 million tons grading 1.8% nickel at a 1.5% cutoff. The stripping ratio is 0.6-to-1 and the deposit has a higher-grade (2% nickel) starter zone at surface.

AMSA’s recent work was focused on the first five years of a mining operation and included metallurgical testing and closely spaced (25-by-50-metre) drilling of the core of the deposit.

Preliminary capital costs are in the range of US$300-$350 million for an operation targeted to produce 35-45 million lb. of ferronickel per year over roughly 20 years.

The deposit is accessible by road. Power costs are low in Venezuela and the partners expect the project to be a low-cost producer.