JV Article: Tartisan Nickel showcases low-cost underground nickel sulphide mine as part of flagship Kenbridge project

Following a 10,700 meter drilling program completed at the end of 2021, Tartisan Nickel (CSE:TN; US-OTC:TTSRF) has released a preliminary economic assessment (PEA) for its 100% owned Kenbridge nickel project in the Kenora mining district in northwestern Ontario. Prepared by P&E Mining Consultants, the PEA describes a low-cost 1,500 tpd operation with a potentially short lead time. The study projects a nine-year mine plan for underground mining with pre-production capital costs of $133.7 million and potential start-up within three and a half years.

The low pre-production capital cost and early start-up potential are attributed to the project’s status as a developed prospect with reported resources. It houses a 622 meter shaft which was sunk in 1954 and lay idle for 64 years with two working levels. Driven by growing demand for battery metals and the transition to electric vehicles (EVs), Tartisan acquired the property in 2018 through a merger with Canadian Arrow Mines.

“We had been looking for an asset to buy for a few years and came across Canadian Arrow Mines which was trading at pennies,” recalls Tartisan President and CEO Mark Appleby. “We have done our due diligence and reached an agreement to take them over through a plan of arrangement. At the time, we were called Tartisan Resources and were a pure Peruvian company, but we saw the emergence of the electric vehicle revolution and renamed ourselves Tartisan Nickel.

The growing awareness of the need to produce battery metals like nickel in an environmentally responsible manner favors nickel sulphide deposits, which use much less energy than laterite deposits in the production process. “The Kenbridge project is a sulphide deposit, so that’s an advantage for us,” Appleby said.

The Kenbridge project was discovered in 1937 and acquired by Falconbridge in 1952. Falconbridge began construction of the shaft two years later, extracted a bulk sample, but then suspended work on the property in 1958.

Dean MacEachern, Tartisan’s geological advisor for the project, had a 20-year career with Falconbridge and was familiar with the property from when he ran the company’s exploration office in Winnipeg. MacEachern picked it up for Canadian Arrow Mines in 2007.

“The Kenbridge project was part of the Falconbridge land package,” MacEachern said. “In the 90s, the price of nickel was $1.90 per pound and these non-core assets were sold to various junior mining companies, so this property was on my radar for a while.”

The project is located 70 km southeast of Kenora and occupies an onshore position of 42 km2 including a mixture of patented and non-patented claims. Work currently underway on a 13km all-weather road to the property is expected to be completed by the end of the year, the power grid is within 40km of the site and skilled labor is available locally in Kenora, Dryden, Fort Frances and nearby Indigenous communities.

Since 1937, the property has been tested by 665 surface and underground drill holes totaling 99,741 meters, including 40,000 meters drilled by Canadian Arrow Mines and 10,000 meters drilled by Tartisan in 2021.

Since 1937, the property has been tested by 665 surface and underground drill holes totaling 99,741 meters

“We drilled deep and along strike to see if we could go deeper than the historic 823-metre hole that was drilled by Falconbridge years ago,” Appleby said. “We have drilled to over 1,000 meters and found that the mineralization continues at depth and along strike, so we believe this is an expandable deposit. Indeed, through this campaign of drilling, we were able to increase the resource by 20%.We also carried out geophysical work on the majority of the property, including geophysical surveys in existing drill holes, and drilled four holes on a site that we call Kenbridge North, two miles away, it has similar geophysical and geological characteristics, so it may be a secondary deposit.

Tartisan has also budgeted over 8,000 meters of additional drilling to continue testing the down-dip extension and bring some of the inferred resources into the indicated category.

The PEA, which focuses solely on current underground mineral resources, reports 3.4 million tonnes of ore at 0.97% nickel, 0.52% copper and 0.013% cobalt in the measured and indicated categories. Inferred Mineral Resources total 1.0 million tonnes at 1.47% nickel, 0.67% copper and 0.011% cobalt.

Life of mine revenues from net smelter returns are estimated at $837 million, while total capital costs are set at $227 million, of which $133.7 million is to be spent before production. The PEA reports an estimated pre-tax net present value of $182.5 million using a 5% discount rate and a pre-tax internal rate of return of 26% with a return on investment in 3.5 year.

Kenbridge “is a nickel sulphide deposit, hosted in gabbro, similar to deposits that were mined at Lynn Lake, Manitoba, by Sherritt Gordon Mines years ago,” MacEachern said. “At the top it’s more spread out and as you go through the area it becomes more semi-massive and massive. It gets narrower but the grade improves.

MacEachern adds that one of the benefits of the project is that the existing infrastructure represents a modest investment. “It’s less than $140 million to start with. This compares to many large, low-grade deposits that will take $2 billion to get started.

Given the project’s low initial investment and short production lead time, “we see ourselves as low hanging fruits,” Appleby added.

According to Tartisan’s management, the combination of higher grade zones at depth and lower grade ore near surface provides Tartisan with the flexibility to adapt to fluctuations in nickel prices.

At one point, the management team considered the possibility of an open pit mine on the surface, but came to the conclusion that optimizing it would have a negative impact on the pit. The decision was therefore made to focus on the higher grade underground material and leave the surface deposits. at some point in the future.

“Some higher-grade underground areas can be incorporated early into the mine plan,” MacEachern said. “This will allow us to make the project profitable in just over three years and if the price of nickel goes up, so much the better. By focusing underground, we mitigate risk if the price of nickel drops to, say, US$6 per pound.

According to project manager Greg Edwards, Tartisan has strong support from the three First Nations impacted by the project: Naotkamegwanning First Nation, formerly known as Whitefish Bay First Nation, Northwest Angle #33 First Nation and Northwest First Nation. Corner #37.

“I meet with them regularly to keep them informed. Last year we invited several of the local First Nations groups to our site for a lunch and learn, took them on a tour and briefed them on what we were planning. There was also a blessing ceremony by an elder from one of the communities.

Anticipating an early start to permitting, Tartisan hired Knight Piesold Consulting and Blue Heron Environmental in May to begin baseline environmental work. A second phase of studies began in August and will continue over the four seasons.

The decision to get a skip on environmental studies reflects “the company’s commitment to an approximately three-year production schedule,” Appleby said.

An on-site plant will produce nickel and copper concentrates which will be shipped by rail or truck to Sudbury or another location for further processing. Also included in the PEA’s pre-production investment plan are the rehabilitation of the shaft, the installation of underground infrastructure and the excavation of 13,000 meters of lateral development.

“Although built in the early 1950s and currently flooded, the well is in very good condition,” MacEachern said. “We dropped a camera in the bottom and confirmed it was in good condition. The idea would be to carve out the well to be able to handle the tonnages we are considering. We estimate that it will take about eight months to put it in place to transport the ore. The big advantage for us is that we already have a hole in the ground.

The previous joint venture article is PROMOTED CONTENT sponsored by Tartisan Nickel Corp. and produced in cooperation with MINING.com. Visit www.tartisannickel.com for more information.

Bonny J. Streater