Xstrata boosts Raglan resource (December 17, 2007)

Exploration efforts by Xstrata (XSRAF-O, XTA-L) at its Raglan nickel mine in northernmost Quebec have paid off with a substantial resource boost for the mine’s Zone 5-8, which the company describes as the “largest mineralized zone in Raglan’s history.”

Zone 5-8 now contains proven and probable reserves of 800,000 tonnes grading 3.02% nickel and 0.8% copper, and measured and indicated resources of 400,000 tonnes at 1.3% nickel and 0.35% copper. Another 11.5 million tonnes of 3% nickel and 0.8% copper lie in the inferred category.

In August, Xstrata outlined plans to roughly double production at Raglan to 2 million tonnes of ore annually. The company says its ongoing expansion work will result in annual production rates of 1.3 million tonnes by the end of 2008, 1.5 million tonnes by 2011, and up to 2 million tonnes by 2013.

At the 2-million-tonne-per-year rate, Raglan would be one of the world’s largest nickel mines, with output approaching 50,000 tonnes of contained nickel-in-concentrate annually, plus byproduct copper and platinum group metals.

Xstrata plans to spend US$200 million on exploration at Raglan over the next five years to backstop its ambitious expansion program.

Xstrata’s Toronto-based subsidiary Xstrata Nickel recently scooped up the Association de l’exploration minire du Qubec’s (AEMQ) “Development of the Year” award for the work at Zone 5-8.

Raglan ore is crushed, ground and processed into nickel-copper concentrate at an on-site concentrator. It’s then shipped via Quebec City to Xstrata’s Sudbury smelter for further processing before being sent to Xstrata’s Nikkelverk refinery in Kristiansand, Norway, for refining. Raglan directly employs 600 people, plus more than 200 contractors.