Duluth sees nickel upside at Twin Metals (Northern Miner – May 14, 2014)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

VANCOUVER — It’s been a long road for junior Duluth Metals (TSX: DM, US-OTC: DULMF) on the northern edge of Minnesota’s prolific Iron Range, but it looks like the development potential of the company’s Twin Metals joint venture with major Antofagasta (LON: ANTO, US-OTC: ANFGY) is set to come into focus in the next few months.

The companies are set to release a prefeasibility study (PFS) based on a large-scale copper-nickel-platinum-palladium-gold resource in July — the first updated study since a preliminary economic assessment (PEA) in 2008 — which will outline a 50,000-tonnes-per-day underground mine.

Duluth has also undergone a management change as it moves towards a potential development scenario, with former-COO Kelly Osborne — who worked as a senior vice-president of underground operations for Freeport-McMoRan Copper & Gold (NYSE: FCX) — stepping in as the company’s president and CEO on May 12.

Outgoing president Vern Baker took some time to sit down with The Northern Miner to discuss his four-year tenure with the company, and shed some light on the current state of the Twin Metals project. Baker will continue to serve on the Twin Metals technical committee moving forward.

During Baker’s time with the company Twin Metals significantly grew as an asset, with the project now hosting significant measured-and-indicated resources across four deposits, namely: Maturi, Maturi Southwest, Birch Lake, and Spruce Road. Baker explains that an operation would initially focus on Maturi, which he labels the “heart” of the story.

“The original PEA was done on a much smaller footprint back in 2008. We now have four geographically-distinct resources. Around six years ago was right when the capital acceleration started up throughout the industry, but for us the key issue is we think it’ll make a great mine,” he adds, speculating that Twin Metals development costs will be above the US$2 billion mark. “We have good rock, good scale, consistency, and for a copper mine, we definitely have the grade. Obviously Antofagasta is a big company that looks at things differently, but they’ve been a great partner.”

As per a late-February resource update Maturi now 268 million measured tonnes grading 0.63% copper, 0.2% nickel, 0.11 gram platinum per tonne, 0.28 gram palladium per tonne, and 0.06 gram gold per tonne. Indicated resources tack on 702 million tonnes of 0.58% copper, 0.19% nickel, 0.14 gram platinum, 0.31 gram palladium, and 0.06 gram gold. Updated inferred resources total 510 million tonnes grading 0.51% copper, 0.17% nickel, 0.11 gram platinum, 0.26 gram palladium, and 0.06 gram gold.

The newest resource edition is the Maturi Southwest satellite, which hosts 93 million indicated tonnes of 0.48% copper, 0.17% nickel, 0.06 gram platinum, and 0.25 gram palladium; as well as 29 million inferred tonnes averaging 0.43% copper, 0.15% nickel, 0.06 gram platinum, and 0.25 gram palladium.

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