TANZANIA Two Toronto-based companies, BARRICK GOLD and FALCONBRIDGE, have finalized a joint venture agreement regarding the Kabanga nickel deposit. Falconbridge has acquired a 50% indirect interest for US$15 million and will be the operator.
Over the next several years, Falconbridge will fund and conduct a further US$50-million work plan that will include additional exploration and infill drilling and update the resource model for Kabanga. Upon conclusion of the work, Falconbridge will fund the next US$95 million of any project development expenditures to advance the Kabanga project. Thereafter, Falconbridge and Barrick will share equally joint-venture revenues and expenditures.
Since acquiring the Kabanga nickel project as part of the acquisition of SUTTON RESOURCES in 1999, Barrick has significantly enhanced the value of Kabanga by increasing the known resource estimate. The current estimated inferred resource is 26.4 million tonnes grading 2.6% Ni. The project is located in northwestern Tanzania, west of Barrick’s Bulyanhulu gold mine and northwest of its Tulawaka gold mine, which commenced production in March 2005.
Barrick and Falconbridge contemplate that the Kabanga project, when put into production, would comprise an underground mining operation and associated surface infrastructure and concentrator. Contingent upon the results of the Falconbridge drilling program, the partners expect that the operation would mine approximately 2.0 million tonnes of ore per year, capable of producing approximately 30,000 to 35,000 tonnes of nickel in concentrates per year. The nickel concentrates would be marketed by Falconbridge and at least 50% of the nickel concentrates would be processed at Falconbridge’s Sudbury nickel smelter and Norwegian nickel refinery on behalf of the joint venture.
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