5th October 2006
Australian Mines to significantly expand nickel portfolio with acquisition of Marriott Nickel Project
Drilling programmes to extend current Inferred Mineral Resource of 7,700 tonnes Ni
Western Australian-based nickel miner Australian Mines Limited (ASX: AUZ) today announced its plans to acquire an advanced nickel project which significantly enhances the Company’s resource base and exploration portfolio.
Australian Mines has entered into an option agreement with BHP Billiton (ASX: BHP) to purchase the Marriott Nickel Project, located less than 70 km south of BHP’s Leinster Nickel Operations, north of Kalgoorlie.
The deposit contains an Inferred Mineral Resource comprising 550,000 tonnes at 1.4% nickel for 7,700 tonnes contained Nickel.
Commenting on the deal, Australian Mines’ Chief Operating Officer Mr Brett Young said that the acquisition was very timely given the record prices prevailing for nickel.
“Marriott represents an exceptional opportunity to add value for the company, and enables us to leverage off our industry knowledge and expertise.
“We view Marriott as a real growth investment, given that the ground is highly prospective, with the ore body still open at depth and up dip. WMC first discovered the resource in 1969 and no further drilling has been conducted since 1971 on the project area. As such, we are very excited to apply modern exploration techniques to this ground.
The project will now become the primary focus for Australian Mines over the next 12 months. The Company plans to commit a minimum A$500,000 to a programme of infill and extension drilling to firm up the resource base, carry out detailed metallurgical testwork and complete a preliminary open pit scoping study.
“As part of the deal, we have secured a ready buyer of all of Marriott’s production, with an offtake agreement in place with BHP the operator of the nearby Leinster Nickel Operation,” Mr Young added.
Under the terms of the agreement, Australian Mines now holds a 12-month free option to evaluate the project. Should the company opt to exercise its right to acquire the project, Australian Mines will pay BHP up to A$500,000 depending of the prevailing nickel price and a 1% royalty on revenues received from nickel sold.
Australian Mines owns and operates the Blair Nickel Mine, 35km south of Kalgoorlie, which has historically produced in excess of 25,000 contained tonnes of nickel. The company is also advancing the exciting Duplex Hill South gold project, south of the Blair mine.
For further information contact:
Brett Young
Chief Operating Officer
Australian Mines Limited
Tel: 08 9481 5811
For media enquiries contact:
Robert Williams
Farrington National
Tel: 02 9332 4448
Location Map of Marriotts Nickel Project
The information in this report that relates to Exploration Results is based on information compiled by Mr M Elias who is a Fellow of The Australasian Institute of Mining and Metallurgy. Mr Elias is employed by CSA Australia Pty Ltd and is a Non-Executive Director of AUZ. Mr Elias has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.’
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