Duluth PFS shows robust, high margin base/precious metals project – by Lawrence Williams (Mineweb.com – August 21, 2014)


The latest PFS on the TMM project provides increasing confidence that the proposed underground mine remains hugely attractive in economic terms.

LONDON (MINEWEB) – Duluth Metals, which is working on moving an enormous base and precious metals project to the development stage in a controversial part of Minnesota, USA, has just announced it has received an independent draft feasibility study prepared by a multi-company team led by AMEC.

The draft PFS, part of an NI 43-101 compliant technical report shows the economics of the proposed underground copper/nickel/pgm mine are supported by fundamentals showing a competitive cost position, high margins sustained over time, and capital efficiencies resulting from outstanding regional and local infrastructure and competitive advantages.

The study was carried out on a proposed underground project which involves mining only a relatively small portion of the company’s Twin Metals Minnesota (TMM) resource on the massive Duluth Complex in eastern Minnesota, and the overall project area should support an even bigger, far longer life operation.

The area is environmentally sensitive and Duluth is keen to demonstrate that a smaller project can be developed which meets all environmental criteria while keeping surface disruption to a minimum by underground mining and very strict environmental controls on waste disposal, processing and tailings storage.

Even so, satisfying the environmental lobby is perhaps an insuperable task given the location of the project on the edge of the Boundary Waters recreational area, although Duluth is working on the premise that the economic benefits to the area, the State and the Nation, will strongly outweigh any environmental concerns.

Thus, the PFS Technical Report is based on a 30-year underground mine plan focused on the part of the overall TMM project area known as the Maturi and Maturi SW mineral deposits. It is based on an average production rate of 50,000 short tons per day, producing copper and nickel concentrates that are anticipated to be marketable to customers across the world. Over a planned 30 year mine life, the report estimates the proposed mining operation would produce approximately 5.8 billion pounds of copper, 1.2 billion pounds of nickel, 1.5 million ounces of platinum, 4.0 million ounces of palladium, 1.0 million ounces of gold, and 25.2 million ounces of silver.

Looking at this smaller scale project purely as a major copper mining operation (it could perhaps also be similarly assessed as a primary nickel or pgm mine), the PFS comes up with a low $0.31/lb copper cash cost over the first 10 years and a 30 year overall cash cost of $0.76/lb – both figures being net of the very substantial by-product credits from the other metals contained in the resource.

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