News

September 03, 2008

Capital Costs Are Key for Franconia Minerals As It Follows In The Footsteps Of PolyMet Mining Towards Production

By Our Canadian Correspondent

The Duluth Complex in northeastern Minnesota has long been known to host extensive resources of copper, nickel and platinum and its associated metals, but the cost of extracting them has in the past proved prohibitive. This is the reason that Brian Gavin and his team at Canadian-listed Franconia Minerals are initially looking at the economics of selling concentrate from the company’s Birch Lake deposit directly to the market before they’ll consider building an expensive hydrometallurgical facility.

Back in 2006, Franconia considered developing the Birch Lake deposit in tandem with the Maturi deposit some five kilometers away, as well as building a hydrometallurgical facility for processing. Capital costs were set at around US$616 million, including US$150 million for the hydrometallurgical plant. At the time, the scoping study pegged the pre-tax net present value using a 7.5 per cent discount at US$365 million using US$450 gold, US$1.50 copper, US$10.00 for cobalt, US$6.00 for nickel,...