Centaur sees low-cost production at Cawse — Aussie miner secures buyers for cobalt concentrate

Lower nickel-cobalt ratios from test mining at the Cawse laterite project in Western Australia have enabled Centaur Mining & Exploration (CNXTY-O)to lower its estimated cash costs, making Cawse potentially one of the lowest-cost nickel operations in the world.

Centaur now believes it can produce nickel at US9cents per lb., after cobalt credits, for the first five years of mining, down from a previous estimate of US55cents per lb.

The mine, situated northwest of Kalgoorlie in between the company’s Ora Banda and Mt. Pleasant gold mines, is expected to produce 8,200 tonnes of nickel and 1,600 tonnes of cobalt during its first year of operation. The nickel-to-cobalt ratio would be 5-to-1, whereas a more typical ratio in laterite deposits would be 10-to-1.

During December, Centaur commenced trial mining and found

higher-than-expected grades of both nickel and cobalt. The company intersected up to 8% nickel and 4% cobalt in 1-metre intervals during grade-control drilling. It also found that selective mining and screening out of lower-grade siliceous material increased the head grade and metal output, while further reducing costs.

Centaur has already secured buyers for all of the cobalt sulphide concentrate it expects to produce over the next four years.

Construction on the A$234-million project is nearly 30% complete. The plant commissioning has been set for July, and the start of production is scheduled for August.

Although it is excluded from the capital costs, the project requires that a A$25-million power station be built.

Centaur is also considering building a A$20-million cobalt refinery if the cobalt grades remain elevated in the closely spaced drilling used in trial mining.

The nickel laterite mineralization at Cawse has a strike length of 20 km and an average width of 500 metres. Additional mineralization has been located at the Siberia Tank prospect northwest of Cawse.

Proven and probable reserves at Cawse stand at 30 million tonnes of lateritic material grading 1% nickel and 0.06% cobalt. The total mineral inventory comprises 213 million tonnes grading 0.7% nickel and 0.04% cobalt.