BASE METALS — Feasibility study improves Ramu

The final feasibility study on the Ramu nickel-cobalt project, while not yet complete, is already returning better-than-anticipated results.

Owners Highlands Pacific and Nord Pacific (NPF-T) report that preliminary results have augmented the resource and confirmed the metallurgy of the deposit, which is situated in Papua New Guinea (PNG).

Additional drilling for the US$22-million study, managed by Fluor Daniels and H. A. Simons, has increased the tonnage by 30% over year-end 1997 estimates, while boosting the nickel grade by 4%.

Within the greater Ramu area, the resource stands at 135 million tonnes grading 1.06% nickel and 0.09% cobalt. Highlands drilled 88 holes (1,817 metres) during the first quarter of the year, and all those completed through the end of February were included in the new resource.

The central Ramu area, where holes are spaced 25 metres apart, 44 million tonnes at similar grades to the overall resource have been categorized as measured and indicated. With continued drilling, Highlands is looking to increase the measured and indicated resource to 65 million tonnes by fall.

Highlands has mapped the Ramu resource with ground-penetrating radar in order to accurately locate the top of the saprolite

horizon. This work has enhanced the accuracy of the resource estimate and should prove useful in mine planning.

As a part of the feasibility study, Highlands started trial mining, taking 20 tonnes of limonite and saprolite for metallurgical testing. The material was subjected to an autoclave at 250 C for 60 minutes. Nickel recovery was in excess of 95% and cobalt recovery was 94%. Acid consumption was 250 kg per tonne of ore.

Highlands is in the process of selecting a site for the processing plant on Astrolabe Bay. The two sites being considered offer protected ports, access to deep water for tailings disposal, and easy access to limestone required for processing. The original site for the plant at Erima was deemed unsuitable because of poor ground conditions.

The final feasibility should be completed by the third quarter of 1998.

Preliminary cost estimates for the project stand at US$750 million.

Starting in late 2000, Ramu is expected to produce an average of 72 million lbs. nickel and 6 million lbs. cobalt per year. Cash costs are estimated at 50 cents per lb. nickel, after cobalt credits.

Highlands, an Australian-listed company, holds a 65% interest in Ramu, while Nord Pacific holds the remaining 35%. PNG-based Orogen and the PNG government have rights to buy into the project. If they were to do so, Highlands’ stake would fall to 46% and Nord’s would drop to 25%.