Barnes Hill Nickel Project

 

Metals Finance has a Joint Venture Agreement with Proto Resources and Investments Limited (Proto), to participate in the development of the Barnes Hill nickel laterite deposit in Tasmania. The Barnes Hill JV Agreement provides generally as follows:

Proto will complete the detailed drilling required in order to convert the indicated resource into a measured resource category. Proto will obtain mining tenements and environmental permits required for establishment of a commercial operation Subject to successful completion of 1 and 2 above, Metals Finance has the option to complete a bulk leach pilot programme and detailed feasibility study on the project. In the event that the project proceeds to commercial development, all surplus derived from operations will be applied to repayment of capital expended by Metals Finance in the development of the project. After capital has been repaid any surplus from operations will be divided equally between Metals Finance and Proto.

Status as at July 2011

Utilising the latest drill results Snowden Mining Industry Consultants have calculated an updated Mineral Resource estimate for the Barnes Hill deposit of a Reserve of 4.0Mt at 0.84% Ni and 0.06% Co at a 0.70% nickel equivalent cut-off. At the proposed mining rate of 250,000t per annum this equates to a mine life of 16 years.

Under the direction of Proto, Pitt & Sherry Engineering Consultants have completed a Development Proposal and Environmental Management Plan (DPEMP) for the Barnes Hill resource development.

Based on previous testwork and the currently proposed flowsheet MFL are preparing a definitive feasibility study into the development of the Barnes Hill resource, including a detailed capital estimate prepared by Intech Engineers. Completion of the DFS is expected by late August 2011.

Utilising bulk samples collected in conjunction with Proto, MFL have commenced large scale leaching trials at a facility in Northern NSW with results expected by the end of September 2011. Preliminary leach results look promising and confirm earlier bench scale testwork.

On 29 June 2011 Proto was granted a Mining Lease (ML1872P/M) over the Barnes Hill deposit thus securing the resource for the proposed development, and paving the way for the lodgement of the DPEMP and subsequent permitting to undertake mining and construction at Barnes Hill.