One of the highest grade nickel deposits—and one of the lowest cost nickel mines in the world—at Forrestania, about 400 km east of Perth, Western Australia, is on track to meet a production target of 25,000 mt/y nickel next year. The project is 100% owned by Western Areas NL, an Australian-based nickel sulphide explorer and producer.
Western Areas plans to develop five mines at the project from 2011, for a targeted production of about 35,000 mt/y nickel. The total mineral resources at Flying Fox—the primary discovery at Forrestania—comprise more than 2 million mt at an average grade of 4.7% nickel, containing nearly 100,000 mt of nickel.

Flying Fox consists of a number of zones of mineralization, labeled from T Zero extending vertically down to the recently discovered T7 zone. In the first full year of production the mine produced more than 200,000 mt at 4.05%, containing more than 8,000 mt of nickel concentrate. In this year’s March quarter a total of more than 67,000 mt of ore at an average grade of 4.5% nickel for nearly 3,000 mt of nickel were mined from Flying Fox. According to Western Areas, Flying Fox cash costs were US$2.58/lb nickel, down 34% from the previous quarter and in line with the life of the mine target of US$2.50/lb nickel.

An increase in resources at Flying Fox has led the company to consider using a shaft to further increase production to more than 20,000 mt/y nickel.

Mining has also started at the Tim King pit at Spotted Quoll, 6 km south of Flying Fox. The mine is expected to produce about 2,500 mt nickel in the June quarter this year. About 1,600 mt of supergene sulphide mineralization averaging 4.8% of nickel (containing 77.2 mt of nickel) has been mined since March 29. This is in addition to nearly 4,000 mt of oxide mineralization averaging 3% nickel (120 mt nickel) already mined from the top of the deposit.

Probable ore reserve at the Spotted Quoll open pit mine is 386,000 mt at a grade of 5.1% nickel (19,900 mt of nickel).

A feasibility study for an underground mine at Spotted Quoll is expected to be completed later this year. Probable ore reserve at the proposed Spotted Quoll underground mine is 1,725,000 mt at a grade of 4.1% (70,200 mt nickel).  Total current ore reserves at Spotted Quoll comprise about 2.1 million mt at an average grade of 4.3% nickel for 90,100 mt nickel.

Current mineral resource at Cosmic Boy, the planned third nickel mine, is 181,000 mt at 2.8% nickel containing 5,000 mt of nickel.

Commissioning of a new crushing circuit for the Stage Two, 550,000-mt/y Cosmic Boy plant upgrade was completed during March. Design crushing rates have already been achieved. Construction is nearly completed for the upgraded flotation and thickener circuits. Stage One of the Cosmic Boy nickel concentrator is fully operational.

The company said Flying Fox, Spotted Quoll and the Cosmic Boy concentrator represent its core business to generate long term profits, while exploration to discover a new high grade deposit similar to Flying Fox or Spotted Quoll at the Forrestania project remains a high priority.