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ARM, LionOre to expand Nkomati nickel
Allan Seccombe
Posted: Mon, 18 Sep 2006

[miningmx.com] -- AFRICAN Rainbow Minerals (ARM) wants to quadruple the size of its Nkomati Nickel joint venture with London-listed LionOre Mining using property prospected by former owner, Avmin, the company said. ARM also wants LionOre Mining to pay for its share of the properties.

The additional property is contained in new exploration tenements around the Nkomati Nickel mine, said Gerhard Potgieter, ARM’s operations executive. The tenements were owned by Avmin, which merged with ARMGold to form ARM in 2004. Drilling and exploratory work had been conducted on the land, he said.

“The tenements are probably three or four times the size of the current Nkomati licence area. It’s prospecting area so its just farms,” Potgieter told Miningmx. “It is virtually the whole area surrounding the current Nkomati area,” he said.

“We have explored most of those farms and that’s the reason we would not mind renewing our prospecting licence there,” he said.

ARM and LionOre jointly own the Nkomati mine, which currently produces 5,000 tons of nickel a year, but the partners will build this up to 22,000 tons/year from 2010 as a result of two expansion programmes.

“We had indications at the time that there are nickel deposits, not sufficient at the time of prospecting to justify a new mine, but now that we have mined in the area for a long time we think we should go back to some of those areas where we found traces of nickel to look at them again,” he said.

If there are economically viable deposits they could supplement operations at Nkomati.

ARM is contributing the prospecting permits on the tenements to the joint venture. The prospecting permits have yet to be granted, but it should done soon. ARM believes the permits have to be registered as new order prospecting rights over the next couple of weeks.

“I wouldn’t like to discuss what LionOre will be contributing until we have made announcement, hopefully in the next four to six weeks when we will have firm documentation to disclose. But surely they will have to pay their way into this,” Potgieter said.

LionOre MD of African operations Peter Breese was not immediately available for comment.
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LionOre, which is listed in Toronto, London, Australia and Botswana, is the world’s tenth largest nickel producer. It has acquired four large nickel ore bodies, which tend to be of a lower grade.

LionOre has for two years tested its proprietary Activox technology at its Tati nickel mine in Botswana and is gearing up to build a full-scale plant in a $620m project to produce 22,000 tons/year of refined nickel. Production at the plant will start in the third quarter of 2009.

Activox brings the cost of producing refined nickel to about half of the current world average of $3 to $3.80 per pound, Breese said in a recent presentation, explaining why low-grade deposits are a viable prospect.

The joint venture plans to build a 20,000 ton/year Activox refinery at the Nkomati project and a bankable feasibility study into the project will start in early 2008, with production pencilled in for mid-2011.