October 2004
Past lessons, future optimism pave the way
BHP Billiton's decision to commit $2 billion to a Western Australian laterite nickel project, coupled with the lessons learnt from the Cawse processing experience, have flow-on benefits for emerging junior Heron Resources.
30 July 2004
Interview: Australia Junior Eyes 50,000 MT/Yr Nickel Mine
SYDNEY (Dow Jones)--The red-hot nickel market of the past year has raised expectations of fresh supply from a handful of new projects due to come on line in the next few years.
These include Inco Ltd.'s (N) Voisey's Bay and Goro mines along with BHP Billiton Ltd.'s (BHP) Ravensthorpe, but not the seemingly massive Kalgoorlie Nickel Project, a potentially large feather in the cap of Australian junior Heron Resources Ltd. (HRR.AU), whose annual output could rival the aforementioned operations.
Following a recent independent scoping study, the hopeful laterite nickel producer was told that a profitable operation could be constructed in Western Australia state for about A$1.4 billion, based on a nickel price of US$3.50 per pound.
Nickel, which has close to doubled over the past 18 months, currently trades for about US$6.20/lb.
Heron's market capitalization, even after doubling in its own right in the last two months, is still well below A$50 million.
But the company has a major, albeit low grade, resource of 862 million metric tons at 0.74% nickel. Within this is contained a more attractive 122 million tons grading 1.5%, which would form the basis of the project, Heron's managing director, Ian Bucchorn, told Dow Jones Newswires in an interview this week on the sidelines of the annual Diggers and Dealers mining forum in Kalgoorlie.
Based on that, "our independent engineer believes we can do 50,000 tons per annum of nickel production," he said.
In order to arrive at such a massive resource total, Bucchorn spent seven years piecing together a patchwork of properties around Kalgoorlie, relying on diligent exploration, but also a bit of good fortune.
"There was one particular tenement which we'd offered someone A$200,000 for, and they told us to get lost, because their tenement was worth a million dollars at least," he said.
"Very shortly afterwards, they went dot-com and they just dropped the ground, so we picked it up for nothing in the end," Bucchorn said.
The technology boom of the late 1990's, which coincided with nickel prices below US$2/lb, saw several mining companies, in Australia and elsewhere, morph into Internet firms.
"So the whole dot-com period, a lot of ground was being dropped, and we just kept picking it up," he said.
In April, after buying the mineral rights to land around the bankrupt Bulong nickel plant in Western Australia, Heron was ready to move forward.
"At that stage, for the first time ever, we figured we had the right critical mass to actually look at going ahead and funding the project, doing all the feasibility (work)," Bucchorn said.
With Challenges, Risks Ahead, Heron Seeking Partner
Heron is now proceeding with a A$16 million pre-feasibility study that Bucchorn hopes to complete by the end of next year. A week ago, the company raised A$1 million in new equity to get the ball rolling.
Heron intends to raise at least two-thirds of the balance on London's Alternative Investment Market (AIM), with the remainder to come from Australia, Bucchorn said.
He believes Heron has the resources and skills to keep the project going into pre-feasibility study. But at some stage in the not-too-distant future, Bucchorn acknowledges that a partner is required.
"During the course of the pre-feasibility, (we) would be trying to bring in a strategic investor," he said, adding that this company would ideally become a future offtake partner. Heron's intention isn't to produce nickel metal, but rather an intermediary product called nickel-cobalt hydroxide that would be sold to a refinery.
The 862 million ton resource also grades 0.05% cobalt.
Calling it a "technical partnership," Bucchorn is seeking "someone who's done it all before, who's got access to the fundraising ability (and) mainly, someone who's got a need for nickel."
Several refineries have made initial contact with Heron, he said. But Bucchorn is also aware that there are those with doubts about the project, particularly given that it is based on clay-like laterite ore, an alternative to the more traditional nickel sulfide ore.
The history of nickel laterite operations, like Western Australia's Murrin Murrin, which produces refined metal, is a checkered one.
While Murrin Murrin, operated by Australia's Minara Resources Ltd. (MRE.AU), has overcome many of its earlier problems, it continues to struggle to meet its production targets.
But Bucchorn believes the technical challenges facing Heron have been exaggerated.
"Everything on our (production) flow-sheet is working at someone else's plant," he said, mentioning Murrin Murrin as well as the Cawse plant, also in Western Australia.
"The technical risk we would view as low, because we're only looking at flow-sheet options which someone else is already using… without problems," he said.
The bigger risk, he believes, is how to raise the roughly A$1.4 billion that will ultimately be needed to build the Kalgoorlie Nickel Project.
But Bucchorn said this will be mitigated by the fact that Heron plans to have a much larger partner involved.
He's also firmly of the view that nickel market fundamentals are strongly balanced in the company's favor.
"The whole thing you've got to look at is… the world wants to have a stainless steel sink," Bucchorn said, adding that there aren't yet enough new mines coming into production in the next few years to meet growing demand from the stainless steel industry.
"If you're in the nickel business… you have to look at laterites, because there just aren't sulfides out there," he said.
29 July 2004
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15 July 2004
Junior Heron takes major step
After more than eight years amassing a Western Australian landholding of almost 20,000 square kilometres, Kalgoorlie-based exploration company, Heron Resources believes it is ready for the big league.
Last week the junior revealed plans to develop a $1.4 billion nickel laterite project near Kalgoorlie.
The ambitious plan to produce 50,000 tonnes of nickel a year for 20 years marks a sea change for the explorer …
13 July 2004
Heron says to fast-track Australian nickel plans
SYDNEY, July 13 (Reuters) - Heron Resources NL (ASX: HRR) said on Tuesday it was fast-tracking plans to develop a new nickel processing plant in the Australian outback after a study showed the A$1.4 billion ($1 billion) project's profit potential.
The plant would number among a small handful of Australian operators gleaning nickel and cobalt from clay-like laterite ores, as opposed to sulphide ores mined by most nickel producers in the region.
The plant would target sales of 50,000 tonnes of nickel and 3,000 tonnes of cobalt annually, generating revenue of A$710 million against operating costs of A$312 million, Heron said. …
9 July 2004
Heron flies
Heron Resources shares jumped more than 20 per cent yesterday as it took the first steps to mine its 6 million tonne laterite nickel resource. …
8 July 2004
Heron sticks to its nickel
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8 July 2004
Heron flags new $1.4b nickel mine
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8 July 2004
Heron nickel project on majors' radar
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6 May 2004
Processing plant focus of Heron Resources study
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3 May 2004
Heron looks to AIM
Heron Resources is targeting a listing on London's AIM stock exchange and has appointed Sinclair Knight Mertz and Snowden to carry out work on the scoping study for a 40,000 tonne per annum nickel-in-intermediate-product operation based on its large laterite resource north of Kalgoorlie.
Results of the scoping study are expected in July.
The junior also said it had commenced discussions with international refiners in respect of product off-take and investment in Heron. …
To download article see www.miningnews.net
19 April 2004
Laterites ignite big and small players
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15 April 2004
Heron picks up Bulong tenements
Heron Resources has taken another step towards development of its North Kalgoorlie nickel laterite project with the $3.79 million cash and share acquisition of resources from the failed Bulong project that are suitable for the processing route being envisaged by the junior.
For its cash and mainly scrip consideration, Heron gets saprolite and nontronite resources that were quoted around project start-up in 1999 at 140 million tonnes grading 1% nickel. …
Heron is progressing towards a pre-feasibility study, which, when at full speed, will likely take around 12 months to complete. …
To download article see www.miningnews.net
19 February 2004
Focus now on nickel laterites
Unlike their nickel sulphide cousins the nickel laterite industry hasn't seen the same rush of interest in recent years and it's not surprising, given the closure of Bulong and the near death experiences of both the Cawse and Murrin Murrin operations.
But there is a mood of change in the air and this could signal an improvement in sentiment towards local laterite nickel devotee Heron Resources. …
