The news that nickel miner ENK has achieved first nickel production at its Philippines pilot plant was hailed by the firm's house broker, the London based Evolution Securities, as a great development, with the broker deciding to strongly reiterate its buy recommendation and 50 pence per share target price.
Approximately 50 kilograms of nickel hydroxide product (NHP) was released from the plant's filter press yesterday. Final assay results are described as outstanding and initial assays of the NHP at bench top level have contained approximately 49% nickel and 4% iron.
ENK said that the plant can produce approximately 200 kilograms of NHP per month by using ion exchange for nickel cobalt separation and purification to process a pregnant leach solution from the heap leach trial pad, followed by precipitation of the nickel as NHP.
The initial NHP will be sent to potential customers for evaluation. NHP has wider market appeal than the MHP (missed hydroxide product) that was previously produced at the company's Caldag project in Turkey since it has significantly lower metal impurities.
Meanwhile, ENK said that the Acoje bankable feasibility study for an atmospheric nickel leaching project remains on track for completion in the second quarter of next year. The firm said that the infill drilling program at Acoje was completed on October 21st 2011 and a new updated resource estimate for this tenement will be announced in due course. The drill rigs are currently in the process of relocating to the Zambales Chromite tenement five kilometers north of Acoje, where they will embark on a 255 hole program, estimated to be completed early next year.
Mr Robert Gregory MD of ENK said that "It is a magnificent effort by the Acoje team to go from being on care and maintenance last year to building and commissioning the pilot plant ten months later."
In addition, atmospheric pressure tank leach testing is also being undertaken and should be completed in November, at which point a decision on which leaching process will be taken to the bankable feasibility study stage.
Evolution commented that the news that the atmospheric pressure tank leach is also emerging as a potentially viable processing route for the Acoje ore increases the company's processing options.
Meanwhile, it added that the agreed sale of the firm's Caldag operation for USD 40 million will mean it is more than fully funded to complete its work program at Acoje. Evolution's forecasts have ENK making sales of USD 2.4 million this year, with a loss of USD 3 million.
(Sourced from www.proactiveinvestors.com.au)
