Polymet mine plan cuts cost projection (July 04, 2005)

A mine plan for Polymet Mining‘s (POM-T) NorthMet copper project in Minnesota suggests the deposit could be put into production at a much lower cost than had been estimated previously.

Sydney-based Australian Mine Design & Development estimates that a 25,000-tonne-per-day operation would incur a mining cost of around US$1 per tonne and a processing cost of US$6 per tonne.

Hellman & Schofield, also of Australia, puts NorthMet’s indicated resource (above the 152-metre elevation) at 215 million tonnes grading 0.31% copper, 0.09% nickel and 0.007% cobalt, with 0.3 gram palladium, 0.08 gram platinum and 0.04 gram gold per tonne. Another 110 million tonnes, grading 0.32% copper, 0.08% nickel, 0.006% cobalt, 0.3 gram palladium, 0.1 gram platinum and 0.05 gram gold per tonne, are inferred.

Initial pit-optimization studies suggest the economic pit depth is around 195 metres, so not all that material would ultimately be available to convert to reserves.

The recent reworking of the pit design brings the stripping ratio down drastically, to 1.1 from 4.3.

Polymet plans to float a sulphide concentrate, pressure-oxidize it, and produce copper by solvent extraction-electrowinning. The plant would also produce, as byproducts, nickel and cobalt hydroxides and a precious-metal-bearing sludge. Discussions with possible buyers are going on, particularly for the nickel product.

In an agreement with steelmaker Cliffs Erie, Polymet has optioned a mothballed taconite mill about 15 km southwest of the pit, which has a grinding capacity of 100,000 tonnes per day. The company expects a considerable reduction in capital cost estimates as a result.

An April 2001 prefeasibility study put capital costs at US$631 million, plus US$186 million in sustaining capital over a mine life of 21 years. Feasibility work in 2004, after the Cliffs-Erie mill became available, said using the mill would lop about US$196 million off the capital cost, and further savings could be found by producing nickel and cobalt hydroxides instead of metal (US$60 million) and by contracting out the mining (US$95 million).

More feasibility work is planned.