RMI 0.00% 0.9¢ resource mining corporation limited

big plans unveiled for png nickel project

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    A Western Australian exploration company has received details of a scoping study that puts its big Wowo Gap nickel-cobalt laterite project in Papua New Guinea in a positive light for development.

    Author: Ross Louthean
    Posted: Wednesday , 27 Feb 2008

    PERTH -

    Resource Mining Corporation Ltd (ASX: RMI) said today that a 40 year mine life could be developed on the Wowo Gap project, 190 kilometres east of Port Moresby in Papua New Guinea based on the annual treatment of 2.7 million tonnes of ore that could produce 20,000 tonnes of contained metal.

    The scoping study, completed by the Simulus process and metallurgical engineering company, favoured the production of mixed hydroxide precipitate via heap leaching.

    Capital costs for this option were estimated to be in the range of $US626-860 million with operating costs in the range of between $US2.74-4.41/lb.

    Executive director, Warwick Davies, said the mixed hydroxide heap leach option had several benefits including its relative simplicity and that there was no requirement for production of hydrogen sulphide gas which has environmental concerns.

    The estimated net present value of the heap leach development option was between $US296-608 M at 12% cost of capital with an internal rate of return of between 20.3-23.7%.

    Wowo Gap is being developed by Resource Mining's subsidiary Niugini Nickel Ltd and board members and consultants last week gave a presentation on the project to PNG's Mining Advisory Council in Pt Moresby.

    In that presentation the company said a pre-feasibility study was underway and pointed out Wowo's inferred resource was comparable in size to other major world class nickel laterite projects.

    The current schedule would have the project moving towards a start to mining in 2010/11 with plant design work completed by that time.

    The Pt Moresby presentation was linked to the company seeking renewal of its tenements.

    The project has an inferred resource of 200 million tonnes grading 0.83% nickel and 0.07% cobalt and the strike area of this deposit covers a length of 6 kilometres with the company saying the untested potential strike length was a further 8 km.

    Today's report claimed that a comparison with other lateritic nickel projects in the Pacific Arc showed Wowo Gap could cost less than most - particularly compared with the Goro project in New Caledonia and Gladstone Nickel in the Australian State of Queensland.

    However, based on known studies operating costs for Wowo Gap may prove to be higher.

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