NorontGrade is everything when considering mining ore bodies in the far north. Low-grade ore bodies, even those with large tonnage (500 million plus tonnes) are hard to mine given the cost of mining in the far north. Two examples of discoveries in the far north that became mines are Voisey’s Bay and Raglan.
Vale Inco spent C$825 million to develop Voisey’s Bay and commercial production began in 2005. Reported proven reserves of 31.7 million tonnes grading 2.9% nickel, 1.7% copper and 0.14% cobalt in the open-pitable Ovoid deposit alone. Another 110 million tonnes of resources in three separate deposits has also been identified. Milling capacity is 6,000 tonnes per day. The current mine life is estimated at more than 14 years, however there is potential to last much longer.
Falconbridge spent C$700 million to develop Raglan and commercial production began in 1998. Xstrata acquired Raglan mine through its acquisition of Falconbridge in 2006. Proven & Probable Reserves left to mine are 15.6 million tonnes of 2.82 % nickel and .8% copper. Total measured, indicated and inferred resources are 25.8 million tons. Milling capacity is 3,600 tonnes per day. The current mine life is estimated at more than 30 years.
Noront Double Eagle is reporting total indicated resources of 1.8 million tonnes of 2.0% nickel, 1.2% copper, 1.1 g/t platinum and 3.9 g/t palladium. Total inferred resources are 1.1 million tonnes of 2.4% nickel, 1.3% copper, 1.4 g/t platinum and 4.5 g/t palladium. Because there is a significant amount of PGE in the deposit there will not need to be huge tonnage to make this a viable mining operation. Noront estimates the ore body to be worth $500-$600 tonne, which is incredibly rich. However, they have a ways to go yet in building reserves before they could consider a mining operation. I would think a good comfort level for a feasibility study would be about 10-15 million tonnes. There’s lot of potential since this discovery is still in the very early stages. My thinking is that Noront would need enough tonnes to support a 3,000 tonne/day mining operation with a minimum 15 year mine life. That would translate into a 15 million tonne ore body. They have about 3 million tonnes indicated now after only a limited amount of drilling. Considering the value of the ore, they will be spending a lot more money here trying to expand reserves over the next 2 years.