Falconbridge to proceed with Raglan

Though remote, the area along the northeastern shore of Labrador and Quebec is gaining renown as a hot spot for nickel discoveries. In addition to the Voisey Bay nickel-copper-cobalt deposit controlled by Diamond Field Resources (TSE), the region hosts Falconbridge’s (TSE) Raglan nickel-copper deposit, northwest of Voisey Bay on the Ungava Peninsula.

The company is committed to the immediate development of Raglan, which hosts geological reserves of 18 million tonnes averaging 3.13% nickel and 0.88% copper.

The operation will boost Falco’s annual nickel production by 56% over 1994 figures. This increase, along with the expected 135% jump in copper production from its share of the Collahuasi project in northern Chile, will generate much additional revenue for the base metal producer.

Raglan was discovered in the early 1930s and has undergone a stop-and-start exploration and development history. Plans to develop the deposit were brought forward several times, only to be shelved.

Falconbridge was among the companies interested in acquiring a stake in the Voisey Bay project, but nickel giant Inco eventually outbid all competitors. Analysts speculate that had Falco been the successful bidder, it might have placed Raglan on the back burner.

Development of Raglan is contingent on agreements with the Makivik Corporation, which represents the local Innuit people, and with the Quebec government. These agreements affect infrastructure funding, environmental permitting, taxation and other regulatory matters.

Nickel-copper mineralization is hosted in six zones within an east-west-trending belt over a distance of 60 km. The project also has excellent exploration potential.

Falconbridge will spend about $486 million to bring the property into production, which is expected to start by mid-1998. Over its 15-year mine-life, the operation will yield about 20,000 tonnes of refined nickel per year at a cost well below US$2 per lb.

Falconbridge plans to mill the ore at Katinniq, then truck the concentrate 65 km north to the port facility at Deception Bay, Que. The concentrate will then be shipped to the company’s smelter in Sudbury, Ont., and processed into a nickel and copper matte. From Sudbury, the matte will be sent to the Nikkelverk refinery in Norway for additional processing. Falconbridge is increasing capacity at the refinery to 80,000 tonnes per year.