Fletcher Nickel likes what it sees near Timmins

Nearly two years after listing on the Toronto Stock Exchange, Fletcher Nickel (FL-T) is well on its way to proving that it has a large-tonnage, near-surface nickel resource on its hands that could be mined as an open pit.

Data from drilling and metallurgical and refining tests indicate that mineralization extends north of the past-producing Texmont nickel mine on Fletcher’s property south of Timmins and that it continues for about 800 metres along strike, increasing the overall strike length to about 1,100 metres.

“The Texmont mine itself produced at a reported average grade of plus or minus 1% nickel and we have completed some scoping studies which indicate the ore body might be mined at a rate of up to 2,000 tonnes per day from the existing shaft,” Frank Smeenk, the company’s chief executive, said in a statement.

The Texmont mine operated for a couple of years but was closed in 1972 due to low nickel prices and the high cost of diesel. “The government introduced a diesel surcharge and the project became uneconomic,” explains Bruce Hodgman, the company’s communications director. “We could quite easily get electricity in there now but at that time it was considered quite remote and I guess it just wasn’t feasible back then.”

The property is about 45 km south of Timmins in the Porcupine mining complex of northern Ontario. It can be accessed by dirt logging roads.

Fletcher has identified substantial targets to the north and south of the Texmont deposit that remain to be drill tested.

In 1972, Derry, Michener and Booth filed a report with the Ontario Securities Commission outlining a total of 3.19 million tons of proven and drill-indicated reserves at a grade of 0.92% nickel. The resource is not considered compliant with National Instrument 43-101 standards, however , and none of the plans, sections or detailed block calculations used for those reports have survived.

So far, Fletcher says, metallurgical testing indicates good recoveries and concentration. About 60 kg of nine mineral samples were selected from three drill cores obtained during the 2008 drill program from each of three geological zones (North, Main and South). Only one drill-hole sample in each zone was selected for testing.

The laboratory test program used split drill core that was blended into three composite samples, which varied by grade from 0.27% to 0.62% nickel, with similar sulphur values.

The primary nickel-bearing sulphide mineral was identified as pentlandite, with the major gangue consisting of fine-grained serpentine. Test work consisted of three scoping flotation tests on composited low grade (0.27% nickel), medium grade (0.47% nickel) and high grade (0.62% nickel).

The results of three bulk cleaning tests showed that the material upgraded well improving with the head grade, and produced concentrates in a range of 13% to 21% nickel. The third cleaner concentrate recovered from 38% to 49% nickel, using open cycle procedures, from the 0.27% to 0.62% nickel head grades respectively.

This recovery would be expected to increase by the recycling of the stage 2 and 3 cleaner tailings and locked cycle testing would be required to more accurately estimate an operating plant recovery, the company says. These concentrates also contained elevated magnesium (primarily as talc), a concern in smelting.

Fletcher points out that nickel concentration ratios of 30:1 to 50:1 were “encouraging.” After three stages of cleaning, nickel concentrate grades ranged from 13% to 21%, with higher concentrate grades corresponding to higher feed grades.

The company also notes that carbonyl refining testing demonstrates the concentrate may be refined to ferro-nickel, cobalt. As a possible alternative to smelting, the concentrates recovered from test work underwent a preliminary carbonylization refining test to determine their suitability for the production of high purity ferro-nickel and cobalt powders.

This proprietary refining method uses sulphur in a sulphide nickel concentrate to fuel its roasting, which then, after reduction to metal, enables the concentrate’s metals to form carbonyl compounds, which may then be precipitated in highly purified concentrations by selective distillation.

One 150 gram sample of feed material was delivered to Chemical Vapour Metal Refining in June. CVMR(R) was asked to demonstrate the possibility of extracting nickel, cobalt and iron directly from flotation concentrate.

Fletcher provided feed material consisting of about 15% nickel, 25% iron and 0.6% cobalt. Targeted metals were successfully extracted with yields of 91% for nickel, 95% for iron and 78% for cobalt. Future optimization of parameters should increase nickel yields above 95% and cobalt above 85%, the company believes.

Extracting nickel and cobalt directly from flotation concentrate using the carbonyl process means that several steps associated with producing nickel can be eliminated. This could cut capex and opex costs and make it possible to build an efficient, smaller scale plant to produce 2,000-4,000 tons per year, the company believes.

At presstime the Toronto-based junior was trading at 7.5¢ per share. The company has a 52-week trading range of 2¢-22¢ per share and has 24.4 million shares outstanding.