Vancouver — With receipt of a mining licence for its Ban Phuc massive sulphide nickel deposit in northwestern Vietnam, Asian Mineral Resources (ASN-V, AIERF-O) can begin construction.
The company is aiming to start production in early 2009.
Through its 90%-owned subsidiary Ban Phuc Nickel Mines, Asian Mineral Resources has been advancing the project over the past decade — completing a positive feasibility study in late 2005. The report examined an underground mining operation and conventional sulphide flotation plant to produce nickel and copper concentrates.
The study tabled proven and probable reserves of just over 1 million tonnes grading 2.4% nickel, 1% copper and 0.08% cobalt, with a mine life of 5.5 years.
A revised capital cost estimate at the roughly 600-tonne-per-day operation comes in at about US$62 million. Cash flow over the mine’s life span was projected at about US$282 million (after tax) in a recently updated technical report. Using a 10% discount rate, the June 2007 economic analysis update also projects a pretax net present value of US$192.2 million, a 137% internal rate of return and a 9-month payback period.
Vein-type massive sulphide mineralization at Ban Phuc is associated with a shear zone occurring in a suite of meta-sedimentary rocks in the footwall of the Ban Phuc ultramafic intrusive.
Ban Phuc also hosts a larger zone of disseminated nickel sulphide mineralization containing almost 40 million tonnes of 0.42% nickel using a 0.3% nickel cutoff grade.
The remaining 10% of the project is owned by the Mechanical Engineering Co. of Son La province.
With a mining licence in hand, Asian Mineral has also lined up a $20-million non-brokered financing to fund construction. It plans to sell just over 11.4 million units at $1.75 apiece to an Asian investor. Units will consist of a common share plus 0.595 of a warrant. Full warrants are exercisable at $2.10 until April 30, 2008.
Shares of Asian Mineral climbed 12%, or 17, on the news to $1.62. The stock has a 52-week trading range of 91-$3.
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