Oriel Resources plc (“Oriel”) announces today that world recognised metallurgical organisation Mintek has issued its detailed final report (“the Mintek report”) on the large, demonstration-scale smelting campaign of the Shevchenko ferronickel ores. The campaign, which was successfully completed at the end of March 2005, was conducted as part of the definitive feasibility study (DFS) being managed by Bateman, the international engineering group.
In addition, Oriel has received confirmation of growing demand for its Voskhod chromite ore due for production during 2007.
Executive Chairman, Dr Sergey V Kurzin said; “I am delighted that all our milestones are lining up in the right direction.”
Shevchenko
Key findings of the Mintek report (dated 15 June 2005):
• The nickel ore samples from the Shevchenko deposits in Kazakhstan have been successfully smelted in an extended demonstration-scale campaign using the selected DC arc furnace technology
• The primary objective of 90% recovery of nickel into ferronickel was achieved and even exceeded in some instances
• A nickel grade of 20% product in the ferronickel can be produced from the Shevchenko ores.
• The flexibility of the process to accept the expected range of ore types and blends has been confirmed
• Successful determination of key process and operating parameters that have confirmed the design of the commercial-scale furnaces
• The establishment of these key process relationships will allow the economic optimisation to proceed as planned
As part of the study the campaign smelted 193 tonnes of calcined ore to produce approximately 11.3 tonnes of ferronickel. The successful results for the smelting of the bulk ore samples from the Shevchenko nickel project were an essential part of confirming the design of the plant. Also, the results determine a saleable product after the usual refining processes.
Bateman who oversaw the smelting campaign confirms that the data provides the required parameters for the design of the smelting furnaces for Shevchenko.
Sustained periods of stable furnace operation were achieved and accurate material and energy balances over the campaign were measured, which therefore allowed the determination of reliable process relationships. This approach has also successfully generated the necessary process data for input to the economic optimisation of the overall project. The most important parameter is the nickel head grade, however the relationships between parameters such as the other components in the ore, namely SiO2, MgO and Fe2O3 and the recovery of nickel and the grade of the ferronickel have also been determined. This information will permit the further refinement of the economic optimisation based on the ore resource data.
The preliminary feasibility study completed in September 2004 indicated a pretax, pre-royalty net present value (“NPV”) (discount rate 10%) of $489 million and an internal rate of return of 26.6% based on a maximum pre production capital exposure of $346 million, and an operating cost of $1.53/lb nickel.
The DFS that commenced in November 2004 is expected to be finalised by September 2005.
