It is reported that Kagara has mined the first ore from its Lounge Lizard high grade nickel sulphide deposit in Western Australia, bringing to fruition the innovative JV agreement struck just eight months ago with project neighbor Western Areas.
The ore was accessed by Western Areas as part of the joint development of its Flying Fox deposit and the connecting Lounge Lizard ore body. Importantly, the ore produced so far is outside the indicated and inferred resource estimate of 1.15 million tonnes grading 4.6% nickel previously announced by Kagara.
The 744 tonnes of development ore produced so far, grading 4.4% nickel has been stockpiled and is awaiting treatment through Western Areas' Cosmic Boy concentrator.
Mr Kim Robinson executive chairman of Kagara said that production of the first ore at Lounge Lizard highlighted the significant benefits of the JV with Western Areas, which enabled mining to start much sooner and at a lower cost than had Kagara developed the project as a standalone operation.
He added that "The speed at which Lounge Lizard has been developed has been extremely impressive. This will generate cash flow from the project far sooner and at significantly less expense than would have been the case had Kagara not struck the JV with Western Areas."
Mr Robinson said that it was also expected to result in even greater operating and capital cost benefits for both parties going forward. He added that "It should be remembered that Kagara only acquired these nickel rights in November 2006. This schedule could not have been achieved without the professional team at Western Areas who are mining the body on our behalf and we extend our thanks to all those involved."
Under the terms of the JV, Western Areas will mine Lounge Lizard using access from the Flying Fox decline. Western Areas will manage and operate all aspects of the combined project and Lounge Lizard ore will be treated at the Cosmic Boy nickel concentrator and sold into Western Area's off take agreements.
(Sourced from www.proactiveinvestors.com.au)
