On December 12, 2022, Western Australian nickel miner Mincor said it would spend between $55 million and $60 million to further the underground development of its nickel operations in Western Australia's north.
As well as funding its northern operations to accelerate the pace of underground development, the money will also help with more new underground exploration and resource definition drilling at the Cassini nickel mine in Western Australia. The remaining proceeds will be used to strengthen the company's balance sheet as the company continues to expand its Kambalda nickel operations for the remainder of FY2023, prior to full production.
Mincor intends to distribute up to $20 million of the offer proceeds to advance the recently announced development activities around the Golden Mile area. This will allow Mincor to move forward with this development, fast-tracking grade control drilling and development access works (capital works, ore drive development and additional drilling), as well as continuing existing extended drilling plans throughout the northern operations. In this case, the Company expects development preparations to commence in January 2023, with the first ore development expected to take place in June 2023. The money will be used to find and prove additional nickel reserves in the area. Mincor sees significant potential for the discovery of additional nickel mineralisation in the Golden Mile and the potential to significantly extend the mine life of its Kambalda nickel operations.
The additional $15 million raised will be used to accelerate the Cassini mine's underground exploration and resource definition drilling program, which was originally scheduled to begin in June 2023 but will now begin in January.
Mincor supplies BHP's NickelWest with nickel concentrate for processing and received a $25.3 million payment in June to purchase the first materials for its Kambalda mine. Due to low metal prices, the mine underwent maintenance and maintenance between 2001 and 2016. Mincor resumed work on reopening the Kambalda mine in September 2020 and then shipped the first batch of Kambalda ore to the concentrator near BHP Billiton in February 2022. Once the Kambalda operation is up and running, Mincor has the right to process up to 600,000 tonnes of nickel sulphide ore per year at BHP's Kambalda Nickel concentrator.
Mincor's cost of reopening Kambalda was $98 million, down from an estimate of $107 million. The company expects Kambalda nickel production to peak at more than 16,000 tonnes in the current financial year and hopes production from Cassini and new areas will increase production to current levels in the coming years.
