Shakespeare feasibility works at 4,500 tonnes per day (January 20, 2006)

A feasibility study for Ursa Major Minerals (UMJ-V) gives a thumbs-up to a 4,500-tonne-per-day open-pit mine and mill operation on the Shakespeare nickel-copper property southwest of Sudbury, Ont.

The study, by Micon International, puts a 14.5% internal rate of return and a $16.2-million net present value (NPV) on the project, the NPV based on a discount rate of 10%. It estimated the capital cost at $118.5 million, with the biggest ticket — $48.6 million — on the mill.

The mine would have a life of just under 7 years and would take out a probable reserve of 11.3 million tonnes at average grades of 0.33% nickel, 0.35% copper, 0.02% cobalt, 0.33 gram platinum, 0.37 gram palladium and 0.19 gram gold per tonne. The pit designed around the reserve is 250 metres deep and has a stripping ratio slightly over 5:1.

The reserve is part of an indicated resource of 12.4 million tonnes at 0.35% nickel, 0.37% copper, 0.02% cobalt, 0.35 gram platinum, 0.39 gram palladium and 0.2 gram gold per tonne. There is another 1.8 million tonnes outside the designed pit, which runs 0.37% nickel, 0.41% copper, 0.03% cobalt, 0.36 gram platinum, 0.39 gram palladium and 0.22 gram gold. Most of that material is at depth, suggesting a large push-back of the pit would be necessary to take it out.

Micon’s estimate of operating costs is $22.55 per tonne, of which $10.80 is mining and stripping and $11.75 processing and overhead.

Ursa Major and partner North American Palladium (PDL-T, PAL-X), which is earning a 60% interest in Ursa’s share of the project, have already decided to take the project to the permitting stage. The feasibility study triggers North American Palladium’s obligation to begin funding 60% of the project; it will vest its 60% interest by securing full project financing.

The other partner, Falconbridge (FAL.LV-T, FAL-N) — which currently holds 20% — is allowing its interest to be diluted. Ursa will hold 86% by the completion of the feasibility work now under way.