May 29, 2009 Heron Resources announced it has entered into a binding Framework Agreement with Ningbo Shanshan Co with respect to Heron’s Yerilla Nickel Cobalt project in Western Australia. The Agreement provides for Shanshan to undertake a feasibility study into treating ore from Heron’s Yerilla project utilising technology being provided by Shanshan, to produce a nickel and cobalt concentrate for further processing in China.
September 12, 2008 Heron Resources announced positive results from the scoping study for its Yerilla project, located northeast of Kalgoorlie in Western Australia. The project involves mining 3.2 Mt of ore per annum from shallow open pits located at Jump-up Dam, Boyce Creek and Aubils. Using Atmospheric Leaching Technology, the study provides for an 18 year mine life with annual production of 21,000 tonnes of nickel in a mixed sulphide intermediate product and a further 1,400 tonnes of cobalt sourced from 2.5 Mt of leach feed grading 1.06% Ni and 0.07% Co. Capital costs are estimated at A$1.2 billion. Assuming a pre-tax 8% discount rate, a US$9.00/lb average nickel price and a 0.75 A$:US$ exchange rate, the project has a NPV of $218 million, with payback estimated at 6.5 years. The NPV increases to $1 billion at US$11.00 per pound. The study was based on a combined resource of 135.3 Mt at 0.77% Ni and 0.05% Co with a cash operating cost estimate of US$5.70 per pound of payable nickel net of credits.
