The mines, Wannaway, Miitel, Mariners, Ottojuan, Coronet North, which were put on care and maintenance earlier this year, should represent a major production fillip for the winning bidder given their annual output of about 10,000 tonnes of concentrate. WMC is also offering a long-term off-take agreement with the deal.
Tectonic’s managing director, Andrew King, wouldn’t be drawn as to the company’s bidding status at Kambalda but said it made sense to identify niche mining opportunities. Like many small players in the sulphide nickel game, Tectonic is looking for small, high-grade resources that can be quickly and profitably be exploited.
“Everyone is supposing a whole heap at the moment, it [the Kambalda purchase] is a proposition that we are considering same as anyone else,” King said.
Tectonic has been fortunate in that its RAV8 nickel sulphide project, 5km east of Ravensthorpe in WA, is being bought on stream at a time when the nickel price has strengthened.
Acquired in 1997 from the Ravensthorpe Joint Venture, the project has recently started wet commissioning and first production is expected late this month.
Best of all RAV8 has put on fat since Tectonic took control. The resource has grown 52% to 207,000t at 5.95% nickel. The company currently has 164,000t at 5.83% nickel in reserves.
“With the changing price of nickel, things are looking good for us at the moment,” King said. “This gives us some leeway to look at other projects.”
The nickel price has undergone a remarkable turnaround in recent times. Back in December 1998 it sank to as low as $3000 per tonne - currently nickel is trading at $13,000/t.
The RAV8 project is forecast, based on reserves, to produce 19.9 million pounds of nickel concentrate over an initial two-year mine life.
WMC has signed an off-take agreement to purchase 100% of all nickel concentrate produced from the mine for the next five years.
“We are in the process of settling the RAV8 plant down now with low-grade material and we have high-grade ore on the stockpile ready to put through the plant,” King said.
“We plan to increase the pits down to 40m into the higher grade ore.”
The company has hedged 72-73% of nickel production at a price of US$8225/t.
“The bit unhedged will make a good return on the market at the moment with increased nickel prices,” King said.
