CANICKEL MINING LIMITED Highlights of PEA
Current Bucko Lake MRE:
Measured and Indicated Mineral Resources of 5.7 million tonnes grading 1.24% nickel ('Ni') (using a 0.7% Ni cut-off grade) and 0.11% copper ('Cu') for contained metal content of 156.3 million pounds of nickel and 13.4 million pounds of copper.
Additional Inferred Mineral Resources of 10.6 million tonnes grading 1.18% Ni (using a 0.7% Ni cut-off grade) and 0.13% Cu for contained metal content of 275.6 million pounds of nickel and 31.2 million pounds of copper.
The PEA indicates that the Project would be rehabilitated from its current 'care and maintenance' status and placed into operation to produce 101 million pounds of payable nickel over a 13-year mine life.
Using a base case future life-of-mine (LOM) nickel price assumption of
Pre-tax net present value using a discount rate of 6% (NPV6%) of
After-tax NPV% of
Sensitivity analysis using a recent spot nickel price of
Pre-tax NPV6% of
After-tax NPV6% of
Initial capital costs of
The existing 1,000 tonne-per-day ('tpd') processing plant would be upgraded to 1,500 tpd.
Average cash costs of
Opportunities exist for operations to continue beyond the current LOM plan using resources from multiple known satellite deposits on active company claims: three contiguous deposits are located within 4 km from the
The PEA supersedes the
'We are encouraged by the positive economics demonstrated by this PEA for the
*Cautionary Statement: The Bucko Lake PEA was prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects. Readers are cautioned that the PEA is preliminary in nature. It includes Inferred Mineral Resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the PEA outcome will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
Preparation of PEA
The PEA was prepared by independent firm
For the PEA base case, a nickel price of
Updated Mineral Resource Estimate
The updated MRE incorporates results from a total of 428 drill holes drilled from 1962 to 2013, of which 360 drill holes intersected the mineralization wireframes used for the MRE. Additionally, recent metal prices were incorporated into the estimate for the PEA. The MRE, with an effective date of
Mineralization domain boundaries were determined from grade boundary interpretation constrained by lithological and structural controls determined from visual inspection of drill hole cross-sections and level plans. The domain outlines were influenced by the selection of mineralized material above 0.70% Ni that demonstrated a lithological and structural zonal continuity along strike and down dip and that had a reasonable prospect of economic extraction. The minimum constrained down-hole sample length for the wireframes was 2.0 m. In some cases, mineralization below 0.70% Ni was included for the purpose of maintaining zonal continuity and minimum mining width. On each cross-section, polyline interpretations were digitized from drill hole to drill hole, however, were not extended more than 25 m into untested territory. The interpreted polylines from each cross-section were wireframed into 3-Dimensional solids. The resulting solids (domains) were used for statistical analysis, grade interpolation, rock coding and Mineral Resource reporting purposes. Four mineralization domains were constructed for consideration for potential economic underground mining of the Mineral Resource Estimate.
In order to regularize the assay sampling intervals for grade interpolation, a 1.5 m compositing length was selected for the drill hole intervals that fell within the constraints of the above-mentioned Mineral Resource wireframe domains. Grade capping was investigated and applied to the 1.5 m composite values in the database within the constraining domain to ensure that the possible influence of erratic high-grade values did not bias the database. A variography analysis was undertaken as a guide to determining a grade interpolation search strategy. The Ni and Cu grade blocks in the model were interpolated with the Inverse Distance Squared method. The model block size was 2.5 m x 2.5 m x 2.5 m. The Nearest Neighbour interpolation method was utilized for validation.
Additional mineralization at the
Despite underground development challenges associated with geotechnical stability experienced during previous operations at the
Rehabilitate and re-use existing development where possible while avoiding stopes in historical production areas:
Refit and re-use the existing shaft for broken rock conveyance
Rehabilitate and re-use the existing ramp for trackless equipment access
Convert the existing 1,000 ft (305 m) Level exploration drift into new primary access on hanging wall ('HW') side of the deposit
Change access orientation to the HW from the footwall (FW) to improve geotechnical stability of the parallel wireframed domains.
Improve the ventilation system by relocating ventilation raises to the HW side of the deposit using raise-bores from the 1,000 ft Level to surface.
Postpone capital development while mining previously accessed areas.
FW drifts will allow improved grade selection, bypassing low-grade areas and allowing improvement of the grade profile by targeting more high-grade areas earlier.
Areas of development to be situated away from weaker ultramafic contact areas. Development will be done either outside the ultramafic unit or fully inside the unit with improved ground support versus previous efforts at the mine. Intersections with the ultramafic unit, while unavoidable, will be minimized.
Mine design and planning were accomplished with the assistance of geomechanical input from
The PEA is based on an underground mine operating at a mining rate of 1,500 tpd for a mine life of 13 years. The mining method was selected to ensure maximum geotechnical stability and grade control flexibility while minimizing initial capital expenditure requirements. It is estimated to take one year of pre-production and two years of production to reach the steady-state rate of 1,500 tpd. The underground mine production schedule is summarized in Table 2.
Long-hole mining, on both transverse and longitudinal orientations, has been chosen as the main mining method with a small subset (~2% of tonnes) of cut-and-fill mining above existing workings.
The sublevel spacing is set at 20 m (floor to floor) to allow use of top-hammer or in-the-hole drills. Mining will be carried out bottom-up in 'blocks' approximately 100 to 150 m in height.
A stope width of 12 m was selected to limit the hydraulic radius, enhance stability and reduce cable bolting requirements.
Cemented paste backfill will be utilized to provide improved stope and ground support, to improve stope cycling compared to previous operational backfill practices, and to reduce the amount of tailings stored on surface.
A modular approach to mining will be used:
Stopes will be segregated into high-grade (average 1.31% Ni mined grade) and low-grade (average 0.88% Ni mined grade) areas using a 1.0% Ni mined grade as the nominal split between high and low grades.
Low-grade mining areas are deferred where possible to postpone development costs and improve the production grade profile (segregation and selection done both vertically and laterally).
A combination of cemented paste backfill, transverse cross-cuts, and top-hammer drills will allow for the extraction of low-grade stopes situated between mined-out high-grade stopes later in mine life using up-hole drilling.
Mining will be kept above the 1,000 ft Level until high-grade stopes in the area are depleted prior to developing a ramp to the next block to minimize CAPEX. This strategy will be repeated in consecutive blocks until the maximum mine depth of approximately 900 m below surface is reached.
Initial production will use diesel trucks to haul material to the shaft with later production to use battery-powered electric trucks to limit ventilation requirements as the mine progresses deeper.
Trucks will not enter FW drifts and load-haul-dump equipment will haul all material to level access re-muck bays where the trucks will be loaded. This allows smaller FW drift profiles and reduces ventilation requirements on the levels.
Trucks will predominantly haul to the shaft and a portion of the tonnage from above the 1,000 ft Level will be trucked up the existing ramp directly to surface.
ABOUT CANICKEL
The mine and surrounding deposits benefit from excellent infrastructure including roads, rail, power, internet, personnel, and equipment. The mine can be accessed and operated all year, and existing mine infrastructure includes a 1,000-tpd processing plant, paste plant, on-site drill core shack, hoist and headframe, fine mineralized material bin, office, dry trailers, compressor room, tailings disposal management area and a 100-person camp.
Contact:
VP
Corporate Development
T: 778-999-2771
Email: shirley@canickel.com
Website: www.buckolakemine.com
P.O. Box 35
Tel: 778-372-1806
Fax: 604-254-8863
Forward-Looking Statements
This press release may contain forward-looking statements including those describing the Company's future plans and the expectations of management that a stated result or condition will occur. Any statement addressing future events or conditions necessarily involves inherent risk and uncertainty. Actual results can differ materially from those anticipated by management at the time of writing due to many factors, most of which are beyond the control of the Company. In particular, this news release contains forward-looking statements pertaining, directly or indirectly, to the Company's plans regarding bringing, the
Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties, actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, general economic, market or business conditions, risks associated with the exploration and development industry in general (e.g., the outlook for nickel and copper, interest and exchange rates, inflation and capital market conditions, operational risks in development, exploration and production; the uncertainty of Mineral Resource Estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks).
Readers are cautioned that the foregoing list of risk factors should not be construed as exhaustive. These statements speak only as of the date of this release or as of the date specified in the documents accompanying this release, as the case may be. The Company undertakes no obligation to publicly update or revise any forward-looking statements except as expressly required by applicable securities laws.
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