LionOre study confirms bright future at Tati

| Friday February 9, 2007 00:00

The Tati Nickel is 85 percent owned by LionOre and 15 percent owned by the Botswana government. Associated with the deposit is copper, gold, palladium and platinum by-products. The prefeasibility study confirms that the deposit can be economically exploited to produce around 20,000 tonnes of payable nickel and a similar amount of copper per year for approximately 13 years.

LionOre will proceed with a full Bankable Feasibility Study (BFS), which is expected to be completed during the third quarter of 2007. Commenting on the PFS, Colin Steyn, President and CEO, said: 'This is a positive result for future production at Tati and comes in the wake of achieving our production targets for 2006'. Steyn added that Selkirk is, without doubt, one of the largest undeveloped nickel sulphide deposits in Africa, and has the potential to get even bigger with further drilling.

He said that the positive results of the prefeasibility study confirm the real possibility of boosting LionOre's nickel production from Tati by approximately 260,000 tonnes over the life of Selkirk. 'This would substantially enhance both the project economics and the longevity of the Activox(r) growth projects. The bankable feasibility study will now proceed, with a particular focus on optimising the concentrate supply from Tati Nickel as a whole, and we expect to make a final decision on the development of Selkirk in the latter part of 2007', he added. The Selkirk low grade disseminated nickel sulphide deposit is located 14 kilometers south of the existing Phoenix open pit mine and forms part of Tati Nickel, 85 percent-owned by LionOre and 15 percent-owned by the Government of the Republic of Botswana. Associated with the deposit is copper, gold, palladium and platinum by-products. The pre-feasibility study was commissioned to evaluate the mining and processing potential of the Selkirk ore resource.

The study has concluded that the optimal mining route is an open pit and Dense Media Separation (DMS) operation that could commence after the end of the Phoenix mine in 2016 and utilize the existing Phoenix processing infrastructure: the 5mtpa concentrator and Activox(r) refinery. Initial capital cost estimates are in the region of US$160 million (about P990.4 million).