Trillion to earn 90% interest of 54-million-tonne nickel bet

There is a lot of work still to be done to develop the huge Ivory Coast nickel deposit optioned recently by Calgary-based Trillion Resources (ASE).

It could take as much as seven years and around $10 million for Trillion to earn a 90% interest in the Sipilou nickel project by delivering a bankable feasibility study to SODEMI, the Ivory Coast’s government-owned mining company.

But the potential is enormous, according to Trillion President Jens Hansen, who worked at the project before it was optioned by Falconbridge Ltd. in the late 1970s.

Drill-indicated reserves stand at 54 million tonnes grading 1.9% nickel and government reports suggest that geological reserves could run as high as 500 million tonnes.

While low nickel prices and the recession of the early 1980s forced Falconbridge to walk away from the property, Sipilou is now a key project for Trillion. A 38% owned affiliate of Ottawa-based geophysical consulting company Geotest Corp., Trillion is attempting to develop Sipilou regardless of the recent slump in nickel prices.

Under an agreement signed last year, the Ivory Coast government retains a 10% stake in the Sipilou project and the right to back in for 30%.

The deposit is on a 3,600-sq.-km concession straddling tropical rain forest and savanna in the Ivory Coast’s interior. Jensen says the 400-km distance from Sipilou to the coast means that trucking costs could be prohibitively expensive.

“It is possible that we could ship ore out to the coast but we may have to build a plant,” he said.

Wright Engineers has already started work on a $500,000 prefeasibility study that should answer some of the questions relating to appropriate metallurgical processes and an economic mining method.

According to Jensen, a paved highway runs through the permit and existing transportation networks, power distribution, as well as potential hydro and natural gas availability will have an important impact on the economic viability of the deposit.

Limited exploration will form part of the field program, which will focus on a second identified deposit about 45 km east of the Sipilou deposit.

To help finance exploration, Trillion has already solicited support from the Canadian Federal government which has agreed to kick in $170,000 through the industrial co-operation plan.

Having been approved by the Canadian International Development Agency (CIDA), the funds are designed to support private sector initiatives to facilitate joint ventures in developing countries. “It’s not a lot of money but it helps,” said Jensen. Trillion shares were trading recently at 45 cents .