Rio Narcea to drive ramp at Aguablanca (December 22, 2003)

Anxious to catch the peak of nickel prices, Rio Narcea Gold Mines (RNG-T) plans to begin developing its Aguablanca underground nickel project in western Spain even before open-pit mining starts.

Aguablanca, where an open-pit mine and mill are under construction, is scheduled to start producing in mid-2004 at the annual rate of 8,200 tonnes nickel, 5,000 tonnes copper, and 20,000 oz. platinum group metals. Current nickel prices of more than US$12,500 per tonne plus the prospect of a continued deficit in the nickel market have persuaded Rio Narcea that higher-grade material below the planned open pit should be brought into production earlier in the mine’s life.

Development work is budgeted at US$5 million and will entail driving a decline ramp into the mineralized zone and drifting to provide underground drill stations. Rio Narcea geologists believe the known mineralization is faulted-off and hope to locate the faulted extensions of the mineralized system underground.

Drilling below the limit of the planned open pit has encountered significant widths of mineralized material, running 0.6-2.66% nickel and 0.14-1.25% copper. The reserve in the open pit has been calculated at 15.7 million tonnes grading 0.66% nickel and 0.46% copper, with platinum, palladium and gold credits.