Arimetco improves reserve estimate at Masaba property

A thorough analysis of drill core from the Mesaba copper-nickel orebody in Minnesota indicates a considerable improvement in reserves.

Owner Arimetco International (TSE) and a team of state engineers estimate life-of-mine reserves at 3.3 billion tons grading 0.46% copper and 0.12% nickel at a stripping ratio of 1.15-to-1.

The estimate includes a precious metal credit of about US$2 per ton and a cobalt credit of about US$1.50 per ton.

Included in the waste portion of the stripping ratio is an intermediate zone of potentially heap-leachable material totaling 1.1 billion tons at 0.3% copper and 0.08% nickel.

Open-pit reserves were previously estimated at 630 million tons grading 0.46% copper and 0.12% nickel plus precious metal and cobalt credits. A further reserve of underground material was estimated at 206 million tons grading 0.77% copper and 0.17% nickel. (Both sets of reserves are included in the new open-pit estimate.)

Arimetco acquired a 100% leasehold interest, in return for which it promised to spend US$6 million on exploration over seven years, with the underlying owners retaining a 3.5% net smelter return royalty.

Investment dealer Burns Fry has been enlisted to help the company find a partner for the project.

Roy Shipes, chief executive officer of Arimetco, says discussions are being held with two major mining firms and that two other majors have expressed interest.

The next step will be to commission an engineering firm to complete a feasibility and development plan. Shipes estimates a

120,000-150,000-ton-per-day operation would cost US$600-700 million to start up.