PERTH (miningweekly.com) – Diversified junior Metals X has suspended work on the definitive feasibility study (DFS) of its Wingellina nickel/cobalt project, in Western Australia, as depressed commodity prices persisted.

“After due consideration of the current depressed equity and resource market and cyclical low nickel prices, the board has concluded that a deferral of expenditure is prudent,” said CEO and executive director Peter Cook.

He noted that the Wingellina project remained one of the largest economically viable undeveloped nickel limonite projects in the world, and added that a short deferral of expenditure or feasibility work would not change this, nor would it impact the reflected valuation of the asset by the market.

The Wingellina project is estimated to contain a resource of over 1.8-million tonnes of nickel and some 139 000 t of cobalt metal. The total mineral resource has been estimated at 183.2-million tonnes, at 0.98% nickel, 0.08% cobalt and 47% iron oxide.

A 2008 feasibility study determined that the project could produce some 40 000 t/y of nickel and 3 000 t/y of cobalt, with an estimated mine life of 40 years.

Cook noted that the company believed that the feasibility study was deemed to have a 25% confidence level, and remained sufficient to continue with the progression of the project in the interim.

“At this time, it is prudent to preserve existing cash and build on the strong operating position the company has with its tin business. Previous studies on Wingellina remain valid and show a robust long-term project with a projected 40 000 t of nickel and 3 000 t of cobalt metal production a year, for an initial 40 years.”

Cook added that a short delay in the current dawn cycle of the market made no significant difference to the project, and noted that it was of state and federal significance, despite the nickel price being depressed.

The company noted that while it has suspended the large cash outlay components of Wingellina, Metals X would continue to progress on other elements of the project, including other long lead time studies, and the completion of the public environmental review documentation.