Lundin Mining sinks claws into near-mine nickel copper discovery at Eagle.
Patience and deep wedge-drilling is paying off for Lundin Mining at its Eagle nickel-copper mine in Michigan, US, which recently went into production.
Back in 2013, Lundin bought the near-production project from Rio Tinto for $325 million. It was a project in flux that was not existentially important for Rio Tinto as a small- to medium-sized nickel-copper deposit.
Still, it was half-built and comprised a nickel-copper reserve that would, for Lundin, diversify it far more seriously into the nickel sphere, something it has lacked.
Reserves at the time (and still) were 5.2mt @ 2.93% Ni and 2.49% Cu, with strong gold, PGM and cobalt kickers. On top of the purchase cost Lundin spent about $400 million to get the mine up and running. It shipped first ore mid-last year.
Now, without recent drilling success, the mine stands on its own two feet. It is to produce some 17,000 tonnes of nickel and 17,000 tonnes copper a year over an eight-year life of mine with average C1 cash costs around $2.55/lb nickel, according to Lundin estimates.
But in making the acquisition, which wasn’t particularly cheap, the bet has always been there would be more ore to find, especially with a relatively short mine life (and, to be fair, the asset is considered high-quality.)
Eagle made a strong case for near-mine exploration especially on the flanks of Eagle East. This is a deposit about 2km east of the main Eagle mine and resource that Rio Tinto had drilled rather extensively. But it had not shown an economic deposit there.
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