Mirabela reports maiden underground resource for Santa Rita

Mirabela Nickel (MNB-T, MBN-A) likes to describe its Santa Rita project in Brazil as the world’s largest greenfield nickel sulphide discovery in the last 12 years.

At the Second Americas Nickel Conference in Rio de Janeiro in November, Nick Poll, Mirabela’s chief executive, noted that the project has “the scale of a world-class nickel laterite deposit but the economies of a world-class sulphide deposit.”  

Now Mirabela has sweetened the project further with a maiden underground resource that lies immediately below the current open-pit resource at depths of between 500 and 1,000 metres.

Santa Rita has an underground inferred resource of 55 million tonnes grading 0.82% nickel and 0.24% copper for total contained nickel of 450,000 tonnes. About 95% of that resource is hosted within one continuous zone of mineralization, with the remaining 5% of the resource found within two footwall horizons.

The company is now targeting 60 million tonnes to 80 million tonnes of minable underground resources to support underground production of about 3 million tonnes per year for over 20 years.

The main mineralized zone has an average true width of about 90 metres, a strike length of 300 metres, and a down plunge extent of 650 metres, Mirabela states in a press release.

So far the best intersection to date — 158 metres at 0.99% nickel — is the deepest hole at the north end of the resource, with mineralization open towards the north, south and at depth, Mirabela says.

Mineralization in the main zone is continuous and consistently above 0.5% nickel with higher grade intersections up to 65 metres at 1.22% nickel and 0.36% copper. The spacing between drill holes is between 100 metres and 120 metres.

A prefeasibility study is underway. According to scoping studies, the underground resource appears to suited to bulk underground mining techniques (at a yearly production rate of between 3 and 5 million tonnes).

“Such operations have mining costs as low as US$20 per tonne,” Mirabela stated.

An expansion of the Santa Rita concentrator, to include underground production, is viable and would probably bring significant economies of scale and infrastructure.

Mirabela also notes that preliminary analysis suggests that the underground resource has similar metallurgical characteristics to the open-pit reserve. (About 82% of the underground resource is hosted by the preferred pyroxenitic rocks that contain less non-sulphidic nickel than other host rocks in the resource.)

“The combination of a higher head grade and pyroxenite content are expected to lift recoveries to about 78% for the underground resource, compared with the 70% average recovery for the open-pit reserve,” Mirabela stated.

Santa Rita has an open-cut resource of 130 million tonnes grading 0.60% nickel for 780,000 tonnes of contained nickel.

Construction of a 6.4 million tonne per year nickel sulphide concentrator began in November 2007 and is about 65% complete. The project is expected to start production in the middle of 2009.

The plant will produce 18,500 tonnes per year of nickel in a sulphide concentrate from the open pit and will raise that to 27,000 tonnes per year by the middle of 2010.  

Mirabela believes the project will have a mine life of at least 20 years.

“We want to produce over 45,000 tonnes per annum of nickel in concentrate for 25 years,” Poll said during his corporate presentation in Rio.

Where does Santa Rita put Mirabela in the ranks of the world’s nickel producers, Poll asked? BHP Billiton’s (BHP-N, BLT-l) Mt. Keith nickel mine, a nickel sulfide deposit in Western Australia, contains 194 million tonnes grading 0.56% nickel open cut, he noted, and that mine has a life of 17 years.  

“I think we can do better than that,” he said, adding that despite low nickel prices, “Santa Rita is a great long-term project and it will go ahead.”

In Toronto Mirabela’s stock remained unchanged by the news at 70¢ per share. Over the last year it has traded in a range of 52¢-$7.50 per share and has 127.8 million shares outstanding.