Suppliers News (April 02, 2007)

PolyMet hires firm to develop NorthMet

PolyMet Mining (POM-T, PLM-X) has hired Denver, Colo.-based engineering firm URS Corp. to design and build its NorthMet polymetallic project about 10 km south of Babbitt, in northeastern Minnesota.

NorthMet consists of a copper-nickel-precious metals deposit and the nearby Erie Plant.

URS will complete the bulk of the engineering work in Denver, but has an office in Minneapolis, Minn., that will serve as a base of project operations.

The NorthMet office complex at the 100,000-short-ton-per-day Erie beneficiation plant, acquired from Cleveland-Cliffs (CLF-N) for US$3.4 million in cash and 6.2 million shares, will house the engineering and construction employees once the project moves on-site.

The NorthMet feasibility study, which was finished in September 2006, looked at a large open-pit mine feeding the Erie plant. PolyMet has since inked a deal to take over surface facilities and a short-line railway from Cliffs, for a further US$15 million in cash and 2 million shares.

The study estimated a capital cost of US$312 million, including US$27 million for a rainy day. The pit would take an average of 81,000 tons of material per day, to feed the plant at 32,000 tons per day.

NorthMet has a reserve of 182 million tons, at grades of 0.31% copper and 0.09% nickel, with 0.008% cobalt, 0.008 oz. palladium, 0.002 oz. platinum and 0.001 oz. gold per ton. That figure is out of a measured and indicated resource of 422 million tons grading 0.28% copper, 0.08% nickel, 0.007% cobalt, 0.007 oz. palladium, 0.002 oz. platinum and 0.001 oz. gold per ton.

The feasibility study used metal prices of US$2.25 per lb. for copper, US$7.80 per lb. for nickel, US$274 per oz. for palladium, US$1,040 per oz. for platinum and US$540 per oz. for gold. Treating all the metals as co-products, the operating cost has been estimated at US81 per lb. for copper, US$2.84 per lb. for nickel, US$113 per oz. for palladium, US$477 per oz. for platinum and US$239 per oz. for gold.

Runge sweeps into Asia-Pacific

Consultant and mining software developer Runge has spent A$20 million to acquire two mining consulting firms — MineConsult and Minarco Asia Pacific — as part of an effort to get a foot in the door in the Chinese and Indonesian markets and gain more skilled labour.

MineConsult, an independent Australian company, has been operating since 1991. MineConsult will increase Runge’s presence in Indonesia.

Minarco started as a coal industry consultant and now provides a range of services from technical consulting to corporate advice. Minarco will give Runge access to corporate China.

Both firms employ mining engineers and Runge aims to corner the market on skilled labour as the global mining engineering industry continues to grapple with a dearth of qualified workers.

“Management and employees of Minarco and MineConsult will join Runge, lifting the total number of our employees globally to 230. By growing our geographical presence, Runge can offer better and broader career opportunities for staff,” says Tony Kinnane, CEO of Runge.

Runge previously purchased MRM Mining Services of South Africa and Pincock, Allen & Holt in North America.

Runge posted a pretax profit of A$3.7 million on revenue of A$17 million in half-year results for the first six months of fiscal 2007, which ended Dec. 31, 2006 — an 11% gain over the same period a year earlier.

Brisbane, Australia-based Runge was established in 1977. Runge provides consulting services and software products targeted at customers that operate larger mines.