Cut Off Grade at LN as an example
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Welcome To The Inspiration Mining HUB On AGORACOM
The company is exploring for nickel deposits on its Langmuir property near Timmins, Ontario; for nickel-gold-copper on its Cleaver and Douglas properties; and for molybdenum and rare earth elements at recently acquired Desrosiers property.
Message: 43-101 Expectations
From the Micon study it would seem we are at an early stage for certain details as underlined below. "17.1.3 Cut Off Grade Given the relatively early stage of the Langmuir North deposit exploration and development history, no studies have been undertaken that contemplate potential operating scenarios and limited information is available for such items as metallurgical recoveries and smelting/refining terms.
For the purposes of this assignment, a conceptual operating scenario was developed wherein nickel-bearing material was contemplated to be excavated using open pit mining methods and a nickel concentrate to be produced at a plant located on the property which employs a flowsheet incorporating a flotation process to generate a nickel-rich sulphide concentrate. This concentrate would then be transported to a domestic smelting/refining complex. This conceptual scenario will likely change as more information becomes available for this deposit.
The price of nickel is cyclical, responding to the supply and demand relationship and influenced to a degree by market speculation and technical analyses. The nickel metal prices have varied widely since the year 2000, have recently retreated from record high levels and more recently have recovered from dramatic lows. Given the cyclical nature of metal prices it is not reasonable to utilize the metal price at any one point in time, as it is certain that the price will change in the future. While history has shown that it is impossible to predict what the future metal prices will be with a high degree of accuracy, a reasonable alternative is to utilize the average metal price over a time period rather than using the metal prices at the close of any particular business day.
In light of the fact that the prices of nickel have now retreated from their peak prices, the use of trailing averages may result in values that are above the current spot prices – a situation that is clearly inappropriate. In the absence of a more formal metal price forecast, on a cost of- production basis, Micon believes that an appropriate choice of a long-term nickel price for the purposes of an initial mineral resource estimate is USD$8.00/lb.
Given the early stage of the project’s history, no detailed information is available in respect of many of the important input parameters required to prepare an accurate cut-off grade estimate such as operating costs for mining, processing and general and administration, metallurgical recovery, smelter accountabilities, freight and refining charges, and the like in respect of a potential open pit mining operation.
Consequently, Micon derived estimates for these items on the basis of its experience in the region and from general knowledge as shown in Table 17.2. It is to be noted that the estimates presented below are presented only for the purpose of developing an initial domain model, open pit optimization and reporting criteria, and the assumed values will likely change as new information is obtained as a result of further work."
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