The Yerilla Nickel Cobalt Project is owned 100% by Heron, with Shanshan able to earn 70% through commissioning a mine and processing operation.
The Yerilla Nickel Cobalt Project is located 130 km north east of Kalgoorlie. It consists of the three resources of Jump-up Dam, Boyce Creek and Aubils.
Chinese battery manufacturer Shanshan entered a binding frame work agreement with Heron in May 2009 under which it can earn 70% in the Yerilla Nickel Cobalt Project by completing the feasibility studies, funding and construction of a process plant at Yerilla to produce a nickel concentrate. The final hurdle for Shanshan is to commission the project to reach at least 50% of the feasibility study design capacity. Shanshan commenced pilot testwork in December 2009 on laterite ores in Changsha China. This testwork was suspended when issues associated with controlling the atmosphere in the roasting kiln were identified during piloting. Further laboratory testwork confirmed the nature of the recovery issue. Testwork has now focused on sourcing a pilot scale kiln with a controlled roasting atmosphere.
The project is investigating segregation roasting to process the nickel ore. Segregation roasting heats finely ground ore in the presence of a reductant. The Iron Nickel and Cobalt Oxides reduce to their metallic state forming small particles of metal alloy. This metal alloy is recovered by further grinding and magnetic separation, forming an Iron Nickel Cobalt. Target concentrate grades of 10 to 12% Nickel with target recoveries in the region of 80% are sought for Heron ores. While the Iron, Nickel and Cobalt are reducing well, the grain size to date has been too fine for effective magnetic separation and hence the current low recovery from this stage.
Shanshan plan to recommence piloting once they have sourced a suitable kiln to improve recoveries.
About Yerilla
During 2008, Heron announced positive results (see below for summary) from the Scoping Study for its Yerilla Project located some 150 km north-east of Kalgoorlie in Western Australia. The Scoping Study was delivered on time and within budget because of the quality of the project assets and Heron's in-house project team.
Onwards from the scoping study Heron continue to build further understanding of the metallurgical material types in the Yerilla project areas based on multi-element geochemical data from X-ray fluorescence (XRF) analysis and detailed mineralogy data from X-ray diffraction (XRD) analysis and reflectance spectrometry. In particular, a new relationship between the geochemistry and mineralogy was identified enhancing the ability to predict material types and likely mineralogy based on multi-element geochemical data.
Previously collected core from sonic drilling at the Jump-up Dam and Boyce Creek deposits is being geologically logged and sampled in preparation for additional metallurgical test work should the project proceed to a prefeasibility study. In addition, bulk density measurements are being conducted on core samples from the Boyce Creek deposit for use in future resource estimation work.
Resources
The Mineral Resource Estimate at Jump-up Dam, Boyce Creek and Aubils stands at a total of 135.4Mt @ 0.77% Ni and 0.052% Co. Of this total more than half is in the higher confidence indicated and measured categories. The resources were estimated by Indicator Kriging into a block model. This resource upgrade increased the Company's total resource position to over 1 billion tonnes at 0.75% Ni and 0.05% Co for a total of 7.78Mt of contained nickel. The increase in the Yerilla Resources supported the doubling of potential nickel production examined by the Scoping Study helping to reduce the operating costs and improve economies of scale.
