Crowflight prepares to take off at Bucko Lake (May 12, 2008)

If everything goes according to plan, Crowflight Minerals (CML-V, CMLGF-O) could begin production at its Bucko Lake nickel project, in Manitoba, toward the end of the summer, says Greg Collins, vice-president of exploration.

With 30 employees and 80 contractors on-site, the company is moving forward aggressively at Bucko Lake, located near Wabowden, on the Thompson nickel belt.

A 1,500-tonne-per-day mill is under construction, and there is an existing shaft with access to one level at a depth of about 330 metres.

Underground preproduction development work is progressing, as well as underground delineation drilling. Because the shaft has only a 1,000-tonne-per-day hoisting capacity, a ramp is being driven, which will allow mining to increase by another 500 tonnes per day, so that the mill can run at full capacity.

The project has been optioned from Xstrata (XSRAF-O, XTA-L), which retains a 2.5% net smelter return (NSR) royalty interest. Crowflight owns 100% of the project, and Xstrata has a back-in right. There is an offtake agreement with Xstrata for the concentrate, which will be shipped by rail.

A National Instrument 43-101 technical report from March 2007 estimates that at a cutoff grade of 1.4% nickel, there are 2.5 million tonnes of 2% nickel in the indicated category and 1.2 million tonnes of 2.2% nickel in the inferred category, with copper grades of 0.12-0.14%. At a cutoff grade of 1.4% nickel, the report estimates the life-of-mine mineral reserves at 2.4 million tonnes of 1.8% nickel and 0.14% copper.

If the cutoff grade is lowered to 1% nickel, indicated resources rise to 6.2 million tonnes of 1.5% nickel, and inferred resources to 3.7 million tonnes of 1.5% nickel, with copper grades of 0.1-0.11%. On the basis of metallurgical test work, nickel and copper recoveries are estimated at 79%.

There are two satellite deposits near Bucko Lake. The M11A deposit is 4 km from Bucko Lake and has an inferred resource of 330,000 tonnes of 1.4% nickel. The Halfway Lake deposit is 20 km from Bucko Lake and has an inferred resource of 650,000 tonnes grading 1.2% nickel. In April, the company announced that a hole from the M11A deposit returned 26.7 metres grading 1.3% nickel, including 5.8 metres of 3.1% nickel.

The project is well financed, with $25 million in equity and a debt facility of $55 million. About $34 million was spent on Bucko Lake last year.

Crowflight’s land package in the Thompson nickel belt totals 700 sq. km.

The company recently closed a bought-deal private-placement financing for a total of $11 million, consisting of 8 million shares at 62 and 8 million flow-through shares at 75. The financing was being arranged by a syndicate of underwriters led by Macquarie Capital Markets and including Versant Partners.