| Tue 20 Jan 2009, 13:30 | | BRR - Braemore - Results Of Leinster Scoping Studies |
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BRE
BRE
BRR - Braemore - Results Of Leinster Scoping Studies
BRAEMORE RESOURCES PLC
(A company incorporated in England and Wales with Registration Number 5350550)
(South African registration number: 2008/013973/10)
Share code on the JSE Limited: BRE
Share code on AIM: BRR & ISIN: GB00B06GJQ01
("Braemore" or "the Company")
RESULTS OF LEINSTER SCOPING STUDIES
Braemore Resources Plc ("Braemore" or "the Company"; AIM: BRR, JSE: BRE) is
pleased to update the market on progress with the Leinster Nickel Tailings
Project, following receipt of the preliminary results from the independent
consultants and the completion of the scoping study.
A detailed overview of the scoping study is provided later in this announcement.
In summary, the main findings are:
- project viability confirmed at average production rate of 12,500 tonnes per
annum (tpa) of nickel as intermediate product;
- preliminary results indicate low operating costs in range of US$3.85/lb to
US$4.07/lb; and
- preliminary capital expenditure in range of US$415m to US$444m.
As previously announced, the final scoping report will be presented to BHP
Billiton ("BHPB") by the end of January 2009 for review over the following
months.
Leon Coetzer, Braemore`s CEO, commented:
"Braemore is confident of Leinster`s future given that the scoping studies have
indicated a number of strategic advantages, including the potential low recovery
cost of the tailings, low processing costs and high sulphur recovery rates.
"We believe that additional reductions in capital and operating costs are
achievable in the future through the continued refinement of the project. In
addition to copper and cobalt credits, there are significant by-product credits
from the production of magnesium oxide (MgO) from the sulphur recovery circuit."
Scoping Study Overview
The revised scoping studies include independent validation by leading
consultants of the flowsheets developed by Braemore and revised estimates of
capital and operating costs to a +/- 35% accuracy. The scoping studies have
assumed a conservative 66.65 million tonne resource at an average grade of 0.35%
nickel for 235,318 tonnes of nickel over a life of mine of some 12.25 years.
These studies were presented to the Braemore Board ahead of presenting the final
review to BHPB by the end of January 2009.
The study was divided into five sub-projects, each with a responsible
consultant:
Mineral Resource Estimate - CSA Global Pty Ltd
2) Tailings Recovery - AMC Consultants Pty Ltd
3) Sulphur Recovery - Atomaer / SNC Lavalin Pty Ltd
4) Acid Plant - SNC Lavalin Pty Ltd
5) Nickel Refinery - Bateman Engineering Pty Ltd
Each of these sub-projects have been evaluated in detail within this review,
collating the results to facilitate a detailed analysis of capital and operating
costs to enable selection of the most viable flowsheet for the project. The
project has been investigated at different nickel dissolution rates (60% and
70%) and as either a nickel sulphide or nickel hydroxide producer. The ensuing
anticipated acid consumption rate will be around 150 kg/t for 60% recovery and
250 kg/t for 70% nickel recovery, and the acid consumption costs will vary
accordingly.
1) Mineral Resource Estimate - includes the updating of the previous Mineral
Resource Estimate to include additional tailings deposited in the past two years
and to consider the grade and deposition rate of future tailings over the
expected mine life.
2) Tailings Recovery - studies were concluded over the most effective mining
method from the three storage facilities. Different mining and transport
methods were examined, with Slurrytrack being identified as the most cost
efficient method.
3) Sulphur Recovery - current testwork for the acid recovery flowsheet and
modelling by SNC indicates sulphur recovery at 70% of plant demand is
achievable. A combination of SO2 recovery and burning elemental sulphur will
determine the required scale of the acid plant, whose capacity is set by the
percentage nickel dissolution selected.
4) Acid Plant - studies into scale and options for acid supply were
investigated. These include burning elemental sulphur to generate SO2 gas,
recovery of sulphur units from the waste leachate solution and direct purchasing
of acid.
5) Nickel Refinery - various flowsheets have been investigated at different
percentage nickel dissolution rates to produce either nickel hydroxide or nickel
sulphide intermediate products. Braemore`s flowsheets are well established in
the industry and did not contain any fatal flaws.
Projected capital costs as per scoping studies
The percentage of nickel dissolution selected and the intermediate product
produced (sulphide or hydroxide) are the main determining factors for capital
costs. Estimates of total capital expenditure arising from these studies are in
the range of US$415m to US$444m for intermediate nickel hydroxide and sulphide
respectively. The acid plant is anticipated to cost between US$181m and US$185m
depending on the scale of the plant and the sulphur source.
There remains significant scope to further reduce capital costs by tendering and
specific engineering design to support the final flowsheet.
Projected operating costs as per scoping studies
Recovering the tailings using a Slurrytrack system will result in mining costs
of between US$0.40/lb and US$0.50/lb. Braemore is confident that these are among
the lowest mining costs for nickel sulphide in the industry.
Operating costs could be further reduced by:
a) substituting the sulphide precipitation stage with hydroxide precipitation;
b) substituting purchased limestone with by-product MgO from the sulphur
recovery process; and
c) on-site generation of hydrogen sulphide (H2S)
The operating costs for the various sub-projects were combined and total
operating costs range between US$3.85/lb and US$4.07/lb for intermediate nickel
hydroxide and sulphide respectively.
There remains significant scope for reductions in operating costs through
classification of the tailings and further optimisation of the leach circuit.
For further information please visit our website at www.braemoreresources.com or
contact:
WH Ireland: (Nomad and Joint Broker)
James Joyce
+44 207 220 1666
Mirabaud Securities: (Joint Broker)
Rory Scott
+44 207 878 3360
Qinisele Resources: (RSA Corporate Advisers)
Dennis Tucker
+27 82 492 4957
Russell and Associates: (RSA Public Relations)
Nicola Taylor or Charmane Russell
+27 11 880 3924
Parkgreen Communications: (UK Public Relations)
Sue Scott/Leah Kramer
+44 207 933 8780
Sasfin: (RSA Corporate Sponsor)
Sharon Owens
+27 11 809 7762
Johannesburg
20 January 2009
Sponsor
Sasfin Capital (A division of Sasfin Bank Limited)
Date: 20/01/2009 13:30:04 Produced by the JSE SENS Department.
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