| November 3, 2008 |
| Victory Nickel Announces Results of Lac Rocher PEA, Updates Projects |
TORONTO, ONTARIO--(Marketwire - Nov. 3, 2008) - Victory Nickel Inc. ("Victory Nickel" or the "Company")(TSX:NI)(www.victorynickel.ca) today announced the results of the Preliminary Economic Assessment ("PEA") on the Company's Lac Rocher nickel deposit in northwestern Quebec.
The PEA, completed by Roche Limited Consulting Group, proposes two phases of mining that would extract 317,730 tonnes of material at a grade of 1.57% nickel, 0.58% copper and 0.053% cobalt. This would result in the production of 38,400 tonnes of a mixed nickel-copper-cobalt concentrate containing some 4,040 tonnes of nickel (8.9 million pounds), 1,680 tonnes of copper (3.7 million pounds) and 160 tonnes of cobalt (0.35 million pounds). The PEA shows that metal prices of US$9.74/lb nickel, US$3.65/lb copper and US$30.43/lb cobalt (at an exchange rate of Cdn$1.00:US$0.95) are necessary for the project to break even on a pre-tax, 100% equity basis.
"Lac Rocher is a solid project that needs higher metal prices based on the current size of the deposit, said CEO Rene Galipeau. "As a result, we are continuing with permitting and road construction to allow access for further drilling at Lac Rocher to enable us to quickly advance Lac Rocher to production when metal prices rebound. Our near-term focus will remain on developing the Minago nickel mine and frac sand by-product resource in Manitoba and on opportunities to add assets in line with our goal of building a mid-tier nickel company."
The PEA envisions the Lac Rocher deposit being contract mined in two phases using mechanized cut-and-fill mining over a span of 24-26 months. In Phase One, 65,000 tonnes would be extracted at 1.75% nickel, 0.57% copper and 0.062% cobalt; in Phase Two an additional 252,730 tonnes would be extracted at 1.52% nickel, 0.59% copper and 0.051% cobalt.
All extracted material is assumed to be transported offsite to the Copper Rand mill operated by Campbell Resources Inc. Chibougamau, Quebec. In addition to those noted above, the PEA was based on the following parameters:
- Concentrate grading 10.5% nickel, 3.9% copper and 0.33% cobalt;
- Recoveries of 81% for nickel, 91% for copper and 95% for cobalt;
- An exchange rate of Cdn$1.00:US$0.95; and,
- Transportation, at a cost of $35.00 per tonne, of mined material to Chibougamau for processing.
Qualified Person
Normand Gregoire, Eng. of Roche Ltd., Consulting Group is an independent Qualified Person in accordance with NI43-101 Standards of Disclosure for Mineral Projects and the author of the PEA. Mr. Gregoire has reviewed and is responsible for the Lac Rocher information presented in this news release.
The PEA includes the use of inferred mineral resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that any value from such resources will be realized in whole or in part. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation or other relevant issues.
Project Update
Minago - Manitoba
Wardrop Engineering Inc. ("Wardrop") continues to make good progress on the Minago feasibility study. Various evaluations that will be incorporated into the feasibility study are reaching completion, such as the hydrogeological study by Golder Associates Ltd. and the recently-announced frac sand study by Outotec (USA) Inc.
Independent Nickel Acquisition
As previously announced, Victory Nickel has acquired approximately 84% of the issued and outstanding common shares of Independent Nickel Corp. ("Independent") (TSX:INI). Victory Nickel intends to acquire all of the remaining Independent shares pursuant to a Subsequent Acquisition Transaction which is expected to be considered at a special meeting of holders of Independent Shares on December 23, 2008.
The acquisition of Independent will benefit Victory Nickel shareholders going forward through the elimination of the 3% royalty interest in the Minago project held by Independent, which was valued at approximately $74 million in the November, 2006 Minago PEA, and through the addition of the nickel resources and exploration potential at the Lynn Lake properties in Manitoba.
Mel - Manitoba
Wardrop is in the process of updating the block model of the Mel deposit near Thompson, Manitoba. The Company has fully funded sufficient expenditures to earn a 100% ownership interest in this project subject to a 51% Vale Inco back-in, and is currently in discussions regarding Vale Inco's intentions with respect to its back-in right. Once complete, Wardrop's work will be provided to Vale Inco to undertake metallurgical testing.
About Victory Nickel
Victory Nickel Inc. is a Canadian company with three sulphide nickel deposits containing significant 43-101-compliant nickel resources. Victory Nickel is focused on becoming a mid-tier nickel producer by developing its existing properties, Minago and Mel in Manitoba, and Lac Rocher in northwestern Quebec, and by evaluating opportunities to expand its nickel asset base. Victory Nickel also owns approximately 84% of the outstanding shares of Independent Nickel Corp. ("Independent") (TSX:INI).
For further information, please visit our website at www.victorynickel.ca.
Forward-Looking Information: This news release contains forward-looking information. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding estimates and/or assumptions in respect of production, revenue, cash flow, costs, economic return, net present value, mine life and financial models, mineral resource estimates, potential mineralization, potential mineral resources, timing of possible production and the Company's development plans and objectives) constitute forward-looking information. This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company.
Factors that could cause actual results or events to differ materially from current expectations include, among other things: uncertainty of estimates of capital and operating costs, production estimates and estimated economic return; the possibility that actual circumstances will differ from estimates and assumptions; uncertainties relating to the availability and costs of financing needed in the future; failure to establish estimated mineral resources; fluctuations in commodity prices and currency exchange rates; inflation; metallurgical recoveries being less than those indicated by the testwork carried out to date (there can be no assurance that recoveries in small scale laboratory tests will be duplicated in large tests under on-site conditions or during production); changes in equity markets; operating performance of facilities; environmental and safety risks; delays in obtaining or failure to obtain necessary permits and approvals from government authorities; unavailability of plant, equipment or labour; inability to retain key management and personnel; changes to regulations or policies affecting the Company's activities; the uncertainties involved in interpreting geological data; and the other risks disclosed under the heading "Risk Factors" and elsewhere in the Company's annual information form dated August 18, 2008 filed on SEDAR at www.sedar.com. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein. |
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