Heron 100%
Vale Inco earning 60%
On 5 November 2007 Vale Inco (formerly CVRD-Inco) advised Heron that it would proceed with KNP Step 3. On 20 November 2007 the Management Committee of the KNP approved an A$13.8 million program and budget for the first six months of the 14 month pre-feasibility study (PFS) for the Project. Step 3 involves the completion of the PFS by the end of January 2009.
The program will involve a significant drilling component to confirm and upgrade the confidence in the KNP resources providing the basis for estimating reserves, mine planning and metallurgical test-work. Vale Inco will investigate the application of High Pressure Acid Leach, Heap Leach and Atmospheric Leach to the extraction of nickel from the laterite ores of the KNP. Test-work for all three potential flow sheets will be undertaken simultaneously with resource definition drilling and initial engineering and infrastructure studies. A key component of the second six months of the study is the process engineering and preliminary plant design, leading to costing and estimation of capex and opex for the project.
To facilitate the proposed drilling schedule, a complete review of each KNP prospect was undertaken. A compilation of the existing drilling was completed. Areas where the drill spacing was larger than 160x80 metres spacing and zones that had the potential for a grade of >1.4% Ni either as a head grade or following beneficiation were identified for follow-up. These areas included Highway, Siberia North, Goongarrie Hill, Goongarrie South, and Kalpini.
Work plans for each prospect have been started to target infill drilling to bring the drill plans to a minimum of 160x80 metre spacing. Programs of work have been completed for each prospect and filed with the DOIR for approval.
Ground geophysical Electrical Resistivity Imaging (ERI) surveys were completed to follow-up the work undertaken during Step 2, and to expand other prospect areas. The ERI surveys added more confidence to the geological model interpretation. Surveys are planned to coincide with drill spacing to an approximate 160 metre line spacing. Although in areas like Goongarrie South where there is intensive drilling, the ERI surveys will be at 240 metre line spacing.
A total of 54.6 line kilometres across three prospect areas were completed.
| Prospect | Total number of Line Kilometers (Km) | Date |
|---|---|---|
| Highway | 19.3 | December 07 |
| Kalpini | 11.3 | November 07 |
| Goongarrie South | 24.0 | December 07 |
During Step 1 various drilling methods were evaluated for the collection of samples. From those tests, it was determined that the sonic rig provided excellent sample quality and could drill up to a six inch diameter sample. A total of 32 Sonic holes were completed in the quarter totalling 1,118.5 metres.
| Prospect | Number of Holes | Total Meters Drilled (m) |
|---|---|---|
| Highway | 8 | 318.5 |
| Kalpini | 9 | 314.0 |
| Goongarrie South | 4 | 167.6 |
| Goongarrie Hill | 11 | 318.5 |
RC Drilling commenced in December 2007 at the southern end of the Highway prospect. A total of 22 RC holes were drilled for a total of 933 metres during the December 07 quarter.
| Date | Tenement | No. of drillholes | Total Metres (m) | Comments |
|---|---|---|---|---|
| December 07 | E29/139 | 22 | 933 | Daily meter average - 233 m |
During the March 08 quarter, four RC rigs on site drilled a total of 32,959 metres. Infill drilling is complete at the Highway, Goongarrie Hill and Goongarrie South projects. Drilling is to increase confidence in the resource estimates of each of five project areas for use in the Pre-feasibility Study. Significant results received of drilling completed are summarised in the two tables below:
| Hole Number | East | North | From | To | Width | Ni% |
|---|---|---|---|---|---|---|
| VGHRC0017 | 321660 | 6677120 | 1 | 42 | 41 | 0.85 |
| VGHRC0039 | 321620 | 6677440 | 6 | 24 | 18 | 1.03 |
| VGHRC0208 | 321475 | 6678760 | 10 | 26 | 16 | 1.07 |
| VGHRC0050 | 321620 | 6677720 | 4 | 23 | 19 | 0.79 |
| VGHRC0236 | 321325 | 6679240 | 39 | 56 | 17 | 0.83 |
| VGHRC0011 | 321340 | 6676640 | 13 | 25 | 12 | 0.96 |
| VGHRC0022 | 321340 | 6677120 | 9 | 17 | 8 | 1.23 |
| VGHRC0007 | 321375 | 6676400 | 11 | 21 | 10 | 0.93 |
| Hole Number | East | North | From | To | Width | Ni% |
|---|---|---|---|---|---|---|
| VHIRC0002 | 315243 | 6696437 | 6 | 26 | 20 | 0.98 |
| VHIRC0011 | 314760 | 6696199 | 12 | 26 | 14 | 1.59 |
| VHIRC0012 | 314877 | 6696280 | 13 | 26 | 13 | 0.95 |
| VHIRC0013 | 314795 | 6696277 | 17 | 30 | 13 | 0.90 |
| VHIRC0014 | 314721 | 6696278 | 18 | 43 | 25 | 0.76 |
| VHIRC0016 | 314563 | 6696279 | 0 | 16 | 16 | 0.81 |
| VHIRC0017 | 314478 | 6696278 | 1 | 22 | 21 | 0.84 |
| VHIRC0039 | 315197 | 6696678 | 21 | 38 | 17 | 1.18 |
| VHIRC0044 | 314798 | 6696682 | 1 | 19 | 18 | 1.34 |
| VHIRC0050 | 315101 | 6696840 | 17 | 34 | 17 | 1.04 |
| VHIRC0058 | 315108 | 6696922 | 18 | 34 | 16 | 0.98 |
| VHIRC0061 | 314782 | 6696918 | 4 | 14 | 10 | 1.67 |
| VHIRC0065 | 315161 | 6696998 | 9 | 31 | 22 | 0.96 |
| VHIRC0082 | 313921 | 6699121 | 1 | 22 | 21 | 0.89 |
| VHIRC0092 | 313898 | 6699278 | 10 | 42 | 32 | 1.00 |
| VHIRC0101 | 313716 | 6699520 | 7 | 32 | 25 | 1.07 |
| VHIRC0105 | 313948 | 6699673 | 10 | 25 | 15 | 0.79 |
| VHIRC0110 | 313723 | 6699916 | 20 | 30 | 10 | 1.00 |
| VHIRC0202 | 315198 | 6697083 | 0 | 49 | 49 | 1.24 |
| VHIRC0203 | 315119 | 6697080 | 5 | 24 | 19 | 0.83 |
| VHIRC0204 | 315042 | 6697079 | 0 | 15 | 15 | 0.76 |
| VHIRC0215 | 314882 | 6697236 | 8 | 23 | 15 | 0.76 |
| VHIRC0218 | 315122 | 6697237 | 13 | 45 | 32 | 1.12 |
| VHIRC0223 | 315117 | 6697317 | 2 | 38 | 36 | 0.98 |
| VHIRC0225 | 314959 | 6697320 | 9 | 21 | 12 | 1.04 |
| VHIRC0227 | 314800 | 6697317 | 24 | 39 | 15 | 0.81 |
| VHIRC0237 | 314818 | 6697519 | 10 | 43 | 33 | 1.11 |
| VHIRC0240 | 315058 | 6697521 | 11 | 38 | 27 | 0.90 |
| VHIRC0241 | 315141 | 6697520 | 1 | 28 | 27 | 0.91 |
| VHIRC0244 | 315121 | 6697600 | 4 | 35 | 31 | 0.76 |
| VHIRC0245 | 315041 | 6697599 | 9 | 60 | 51 | 1.03 |
| VHIRC0246 | 314962 | 6697601 | 3 | 26 | 23 | 0.87 |
| VHIRC0252 | 314009 | 6697954 | 13 | 34 | 21 | 0.82 |
| VHIRC0256 | 314878 | 6697923 | 15 | 26 | 11 | 0.94 |
| VHIRC0266 | 314764 | 6698479 | 18 | 36 | 18 | 0.78 |
| VHIRC0270 | 314199 | 6698717 | 5 | 19 | 14 | 0.87 |
| VHIRC0284 | 313945 | 6700077 | 1 | 19 | 18 | 0.80 |
Metallurgical Test-work
For the project to date, 38 holes for 1,480 metres using the sonic drill method have provided samples for metallurgical test-work. Sonic drilling produces a large diameter core of mineralisation suitable for geotechnical and metallurgical evaluation. Twelve holes were completed for the quarter. Further sonic drilling to provide metallurgical samples is ongoing.
Vale Inco test-work includes evaluating heap leaching of nickel laterite as one of the possible nickel extraction techniques. A total of 59 columns are in progress at CSIRO's facilities in Perth. Development of the standard beneficiation test flow sheet is complete and test-work commenced during the quarter on over 300 samples across all deposits.
Pressure acid leach and atmospheric leach test-work along with rheology and settling tests for the Kalpini project were undertaken during the quarter. Preliminary atmospheric leaching results returned nickel and cobalt extraction in the range of 70-90% with acceptable acid consumption.
Pressure acid leach test-work based on nine samples completed has shown good nickel and cobalt results in the range of 85%-95% with low acid consumption. Sampling from Highway, Goongarrie Hill, Goongarrie South and Bulong is in progress. Test-work from these samples will be undertaken and reported on during the second quarter.
Beneficiation
A beneficiation program has been developed to determine the optimum conditions for nickel recovery in terms of:
- top size
- scrubber residence time
- solids contained
- temperature
- rotating speed
- potential benefit of using an attritioning cell
Following the completion of the optimisation testing, a variability program for the beneficiation process will examine approximately 300 samples from the selected prospect areas. The objective of the variability program will be to generate a correlation for the upgradeability behaviour of each material type. The upgradeability correlations could be applied as part of the resource estimation and mining planning phases, while evaluating the opportunity for either HPAL or Atmospheric Leach processes.
Column Leaching
Heap leaching is an alternative method for treating nickel oxide type ores. The lower up front capital costs compared to other processing options could be beneficial to the KNP although operating costs for the heap leach operations have increased recently due to an escalation in reagent costs and higher consumption of sulphuric acid compared to the HPAL process.
During the first phase of Step 3, a program has been planned to start testing approximately 60 mini leaching columns for the following prospects: Kalpini, Highway, Goongarrie Hill, Goongarrie South and Bulong.
At the beginning of December 2007, 16 mini leaching columns were started from material obtained from the Kalpini prospect.
HPAL, Atmospheric Leaching, Rheology and Settling Tests
The use of screen beneficiation has been an industry practice (used at Moa Bay, Cuba since 1958) to facilitate silica rejection and enrichment of Ni in the fine fraction. This process is also currently employed at other locations in Australia (Norilsk Nickel: Cawse Nickel plant and BHP: Ravensthorpe plant). The beneficiation circuit is economical and can often be crucial to making the entire operation economically feasible.
Taking these previous examples, a case can be made to continue to evaluate the use of a high pressure autoclave vessel or the use of a tank leaching in atmospheric conditions, to dissolve Ni and Co by sulphuric acid.
A test-work program has been developed in conjunction with CSIRO in Australia and the ITSL group (Vale Inco Technology Center) in Canada.
The HPAL tests will utilise elevated temperature and high pressure, generating a slurry product with sulphuric acid.
The atmospheric leaching tests will utilise a temperature under 100 degrees centigrade with sulphuric acid added to the ore.
These programs are scheduled to begin during the second half of January 2008.
