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:: Decision to Construct a Nickel Sulphide Treatment Plant
The Board of Western Areas is pleased to announce a decision to construct a nickel sulphide concentrator (‘plant’) at Forrestania with site work planned to commence as soon as possible. Construction is subject to gaining environmental approvals and negotiating appropriate finance.
The intention is to have the 250,000 tonnes per annum plant commissioned by the end of 2006. The first few months of high grade ore produced from Flying Fox can be treated at the Emily Ann plant under the terms of the existing agreement with LionOre, until the Forrestania plant is available.
Total capital cost for the plant acquisition, construction, village expansion and tailings disposal is estimated to be $20 to $25 million. The company has already commenced discussions with its existing financiers to consider funding the plant construction as part of a new debt facility for the proposed Stage Two Flying Fox mine expansion. The feasibility study for Stage Two is almost complete.
Treating nickel sulphide ore on site provides a number of opportunities to increase revenue and reduce operating costs. This has the potential to improve the economic return indicated in financial models for the already robust Flying Fox project. These opportunities include the following:
During 2005, Western Areas acquired substantial second hand equipment for the plant, comprising: sulphide flotation and filtration circuits, a SAG grinding mill and conveyor systems, all in good condition. These items are currently stored either on site or in Kalgoorlie and will form the major components of the plant. A crushing circuit is the other main item required for the plant and is currently being sourced.
Detailed engineering design work is being undertaken by Como Engineers. The design includes capacity to enable future expansion to accommodate ore from other potential sources at Forrestania (eg Diggers South, New Morning/Daybreak).
The concentrate plant will be located at Cosmic Boy, 20km south of Flying Fox. It will use the site of the plant that Outokumpu operated until 1999 which has outstanding benefits, including:
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