PolyMet marches towards NorthMet development

Vancouver — Strong metal prices and refined engineering studies have prompted PolyMet Mining (POM-V, POMGF-O) to expand the scope of development at its NorthMet copper-nickel-cobalt-PGM deposit in northeastern Minnesota.

With all assays from last year’s drilling now integrated into the resource model, the company has modified the scale of its definitive feasibility study (DFS) to reflect a planned 18% boost in the production rate to 29,000 tonnes per day. In addition, production of separate nickel and cobalt concentrates will deliver improved processing terms compared with the combined product previously planned.

PolyMet anticipates that all pertinent data relating to the NorthMet DFS, being conducted by Bateman Engineering, will be in hand by mid-2006. The company will accelerate its permitting process as it nears planned open-pit base metal and PGM production by mid-2008.

The large NorthMet polymetallic deposit hosts a global resource of more than 800 million tonnes averaging about 0.4% copper, 0.1% nickel, 0.1 gram platinum per tonne, 0.4 gram palladium per tonne and 0.05 gram gold per tonne (about 1% copper equivalent). Preliminary mining plans review an indicated resource (above the 152-metre elevation and using a 0.2% copper cutoff) of 215 million tonnes grading 0.31% copper, 0.09% nickel and 0.007% cobalt, with 0.3 gram palladium, 0.08 gram platinum and 0.04 gram gold. Additional inferred resources of 110 million tonnes grading 0.32% copper, 0.08% nickel, 0.006% cobalt, 0.3 gram palladium, 0.1 gram platinum and 0.05 gram gold were also calculated.

Last year’s drilling of 109 holes, totalling over 23,500 metres, provided extensive data for the DFS, plus material for a 40-tonne bulk sample used in detailed metallurgical testing. Three composites of ore, representative of a 20-year mining cycle, were processed through a flotation recovery circuit into concentrates that then underwent successful hydrometallurgical testing.

Much effort has gone into fine tuning and improving the economics of proposed development, including a major redesign of the pit, which has seen the planned life-of-mine stripping ratio drop from 4.3 to 1.1. The company also recently acquired a large, nearby iron ore processing facility from Cleveland-Cliffs (CLF-N) subsidiary Cliffs Erie.

The plant, built in the 1950s for about $350 million and idled in 2000, consists of extensive crushing, milling and flotation equipment, in addition to buildings, tailings impoundments, electrical substations and other infrastructure. PolyMet estimates that the large complex provides about 80-85% of the physical plant assets required for project development and will save the company an estimated US$200 million in capital costs. As the plant was previously permitted, the current process is expected to be streamlined.

The DFS outlines a process of crushing, milling and flotation to produce a sulphide concentrate. The concentrate will then undergo an autoclave process (high temperature-pressure oxidation) with the addition of chlorine, which will put the metals into solution and allow sequential extraction (the company’s proprietary PlatSol technology). Cathode copper will be produced on-site using standard solvent extraction-electrowinning (SX-EW). Nickel, cobalt and zinc will be produced as hydroxides and platinum, palladium and gold will be recovered as a precipitate for offsite refining.

Initial capital spending for development at NorthMet is estimated at $235 million with copper production costs anticipated at US56 per lb. (net of all credits).

The NorthMet disseminated sulphide-polymetallic deposit occurs in the large Duluth Intrusive Complex, a composite layered, tholeiitic mafic intrusion occurring along a Middle Proterozoic mid-continental rift. Along with several other copper-nickel deposits, NorthMet is situated along the western edge of the complex, in troctolitic and minor gabbroic intrusions. The area also hosts a number of large taconite iron ore deposits (Mesabi Iron Range) currently being mined.

PolyMet maintains 100% leasehold interest in mineral rights to the project by paying United States Steel (X-N) US$75,000 per year. The steel giant, which initially discovered the deposit in the 1960s, also retains a 3% net smelter return royalty at NorthMet.