PERTH (miningweekly.com) – Nickel firm Mincor Resources on Thursday revealed a two-pronged growth strategy which would take advantage of the current high gold price and a future recovery in the nickel price.

The miner, which suspended operations at its Mariners and Miitel mines, in Western Australia, in January this year, has unveiled the results of definitive feasibility studies (DFS) for its Durkin North and Miitel/Burnett projects, which also formed part of the greater Kambalda operations.

The Durkin North DFS, which was based on a maiden ore reserve of 17 700 t of nickel-in-ore, estimated that the project would require a capital investment of A$20.2-million, with the project life estimated at four years.

The Durkin North operation would deliver a net present value (NPV) of some A$24-million and an internal rate of return (IRR) of 53%.

With the Durkin North operation acting as anchor producer, an additional 12 000 t of identified nickel resource could be accessed elsewhere on the Kambalda tenements, adding substantially to the cash flow generating capacity of the overall project.

Meanwhile, at the Miitel/Burnett project, the DFS estimated a pre-production capital requirement of A$12.4-million, with the mine life projected to span three years, based on an ore reserve of 10 500 t of nickel-in-ore.

The Miitel/Burnett project was expected to have a NPV of A$15-million and an IRR of 57%.

In parallel with the nickel options being investigated, Mincor had also identified opportunities for near-term gold production on its Kambalda tenements, based on gold resources historically identified on the tenements.

Mincor said that the gold targets provided the potential for a series of shallow, easily-mined gold pits, which would allow the company to take advantage of the current high gold price.

Initial scoping studies had started on two potential gold pits.

Mincor CEO Peter Muccilli told shareholders on Thursday that the company had implemented what it believed to be an effective strategy to rebuild shareholder value, following the closure of the Kambalda nickel operations.

“Our first objective was to minimise losses through an orderly and well-managed care-and-maintenance process, completing a wind-down of our existing nickel production assets that had been in train for nearly a year.

“With that behind us, we can now turn to the future and I believe we have a clear pathway to build significant value in the company, leveraging off our two key assets; firstly our outstanding land-holdings in the heart of one of the world’s premier nickel and gold belts, and secondly, our highly experienced and very capable team.”

Muccilli said that the two nickel feasibility studies highlighted the value of the company’s nickel options, and demonstrated that the two projects could provide a solid foundation for a return to production once nickel prices recovered.

“In the meantime, however, we have a genuine opportunity to determine the viability of our gold assets. Its easy to forget that our tenements lie in the heart of the prolific Easter Goldfields, and we have a number of gold prospects with the potential for rapid development in the current strong gold market, and offering the exciting possibility of building a long-term business.

“We intend to pursue these opportunities very vigorously indeed.”

Meanwhile, Mincor had taken the decision to allow the Mariners mine to flood, since ore reserves at the mine were depleted in January this year.

The surface infrastructure would remain on full care and maintenance, and was expected to provide an ideal base for the future possible mining of the nearby Voyce deposit.