Nuinsco sizes up Mel (August 16, 2004)

Drilling by Nuinsco Resources (NWI-T) has boosted the resource estimate at the Mel nickel deposit, 25 km north of Thompson, Man.

Measured and indicated resources are now pegged at 2.7 million tonnes averaging 0.77% nickel. Two-thirds of the resource is categorized as measured, and grades 0.8% nickel. Another 54,446 tonnes of material running 0.61% nickel are classified as inferred. Both estimates employ a cutoff grade of 0.5% nickel. The resource is at depths of between 46 and 183 metres.

In 2000, Mel’s resource was estimated at 290,000 tonnes grading 1.7% nickel in the indicated category, plus 260,000 tonnes of inferred material of the same grade. Those estimated were based on drilling to a vertical depth of 230 metres, and a cutoff grade of 1.25% nickel.

Nuinsco CEO Warren Holmes says that while the revised estimate includes most of the previously identified resource considered for underground mining, there remains potential for additional tonnage minable by open-pit and from underground.

“Open-pit mining will enhance the project economics,” adds Holmes. “The deposit’s proximity — 40 km by road — to Inco’s Thompson facility is a critical factor making this project attractive.”

Nuinsco plans to use the new estimate as the basis for a preliminary economic evaluation of mining the upper section of the Mel deposit via an open pit; underground mining would follow. Engineering firm AMEC will complete the evaluation.

Meanwhile, the company plans to follow up on a previously sunk hole some 600 metres north of the Mel deposit. That hole was designed to test a pulse-electromagnetic anomaly, and returned a 0.92-metre interval grading 1.31% nickel.

Nuinsco can earn a 100% stake in the property from Inco (N-T) by spending $6 million by Feb. 28, 2006; so far, it has spent $3.4 million. Inco has the right to earn back a 51% interest in the project.