Just out on Stockwatch.........Canadian Arrow's Kenbridge Ni, Cu resources adding up
Canadian Arrow Mines Ltd (C:CRO)
Shares Issued 52,446,400
Last Close 1/11/2008 $0.36
Monday January 14 2008 - News Release
Mr. Kim Tyler reports
CANADIAN ARROW MINES RECEIVES POSITIVE ASSESSMENT STUDY FOR KENBRIDGE NICKEL PROJECT
Canadian Arrow Mines Ltd. has received a positive preliminary assessment study for the Kenbridge nickel project near Kenora in Northwestern Ontario.
Highlights include:
Open-pit amenable resources of 7.3 million tonnes grading 0.38 per cent Ni and 0.23 per cent Cu with a waste-to-ore stripping ratio of 1.5 to one to a depth of 160 metres below surface;
Resources amenable to underground mining totalling 3.9 million tonnes grading 0.7 per cent Ni and 0.31 per cent Cu;
A combined open-pit and underground mining operation supplying 2,800 tonnes per day to an on-site concentrator;
Open-pit mining costs of $8.50 per tonne, underground mining costs of $41.44 per tonne, processing costs of $10.39 per tonne, and general and administrative costs of $2.59 per tonne of ore;
Average cash cost per pound of $4.65 Ni net of byproducts;
Total payable metal production of 81 million pounds of Ni and 51 million pounds of Cu over an 11-year mine life;
Preproduction capital cost of $108-million including a 15-per-cent contingency;
Pretax net present value of $191-million at a 7.5-per-cent discount rate, ranging from $312-million to $70-million with plus-or-minus 20-per-cent change in metal pricing;
Thirty-nine per-cent internal rate of return, ranging from 57 per cent to 20 per cent with plus-or-minus 20-per-cent change in metal pricing;
Economics based on an average $10 (U.S.) per pound Ni and $2.50 (U.S.) per pound Cu, and $1 to 90 U.S. cents.
The report is co-authored by WMT Associates of Oakville, Ont., P&E Mining Consultants of Brampton, Ont., and Micon International Ltd. of Toronto.
Kim Tyler, president of Canadian Arrow Mines, comments: "This study indicates the economic viability of Kenbridge nickel deposit. The 25,000 metres of diamond drilling completed in 2007 has resulted in a 75-per-cent increase in contained nickel within the open-pit component of the mineralization. Based on mining costs and economics, approximately 81 million pounds of nickel and 51 million pounds of copper could profitably be recovered. In addition, the resources defined within the open-pit area, including a portion of the underground mineralization, have been upgraded from inferred to indicated classification. Definition drilling will continue throughout the first quarter of 2008 to upgrade the underground portion of the deposit to measured and indicated classification towards completing a bankable feasibility study."
Canadian Arrow Mines has concentrated on completing the necessary steps to advance Kenbridge to a production decision within the next few months. A program of securing key capital items has been initiated, including a production-sized mine hoist, head frame and semi-autogenous grinding mill. In 2007, a comprehensive environmental baseline study was undertaken which is expected to be completed in the first quarter 2008. Interagency meetings have begun with federal and provincial regulators and discussions with neighbouring aboriginal communities and leadership from treaty No. 3 first nations are under way.
Mr. Tyler continues: "Arrow is focused on developing the Kenbridge nickel project and is pleased with the significant progress made since last April when we arrived on the site. The PAS indicates Kenbridge has the potential to become a very profitable operation for Arrow. This study estimates that our average cost to produce a pound of nickel, net of byproduct credits for copper, will be $4.65 per pound. This is well below the current price of nickel of approximately $12.50 per pound. We are excited about the potential for enhancing project economics through further metallurgical studies, upgrading the underground resource with definition drilling and exploration on our numerous regional properties.
"Two thousand eight will be even busier and more exciting than 2007. Surface diamond drilling will continue to define the orebody to the approximate shaft bottom. The advanced exploration program will commence as soon as the access trail is upgraded to an all-season road this winter. A headframe is expected to be installed, followed by dewatering of the shaft by mid-2008. Underground diamond drilling is expected to commence in late summer to explore the orebody's open extensions below the shaft and along the south strike. Baseline environmental as well as all other technical works will be ongoing culminating in a bankable feasibility study to be completed later this year. Meanwhile, surface exploration will be shifting away from Kenbridge and onto the regional exploration targets at Denmark Lake and Glatz-Emmons-Prigg over the winter."
The Kenbridge nickel property has a highly promising resource which at base-case nickel and copper prices would provide Canadian Arrow with good financial returns and a relatively quick payback, (approximately two years at base-case prices), of the initial capital investment. The company is in the process of fast-tracking a bankable feasibility study to be completed later in 2008.
A copy of the full PAS report will be available on SEDAR within 45 days of this press release. The PAS was prepared by WMT Associates, P&E Mining Consultants, and Micon International, all independent consulting firms, under the direction of Malcolm Buck, PEng, of WMT Associates. Mr. Buck has reviewed and approved of the technical content of this news release. The PAS is based on the updated technical report and deposit model of mineral resources completed by SRK Consulting (Canada) Inc., released on Jan. 9, 2008.
The PAS is being carried out under the direction of the company's vice-president of operations, Garett Macdonald, PEng, MBA. The information in this release was prepared under the direction of Mr. Tyler, PGeo.
) 2008 Canjex Publishing Ltd.