The bulk sample, equivalent to 1,000 truckloads of ore, will occupy the Strathcona Mill for the better part of a week. In addition to generating some revenue for the company, it will confirm nickel and copper grades and shed light on how well the metals can be extracted from the ore.
“We’d like to be in a position to receive our permits and go forward with development and construction in the first half of 2007,” said URSA Major President and CEO Dr. Richard Sutcliffe. “We’re very keen to move quickly because of the high commodity prices.”
The feasibility study, conducted by Micon International Limited, confirmed a resource of 11,266,000 tonnes of nickel, copper and platinum group metals and showed healthy returns based on a nickel price of $6.59/lb. The capital cost of the proposed operation, including a mill, was estimated at $118.5 million.
The company decided to look at a standalone operation with an onsite concentrator when the proposed combination of Inco and Falconbridge raised questions about milling capacity in Sudbury. Xstrata’s successful acquisition of Falconbridge could leave the Strathcona Mill with sufficient capacity to handle Shakespeare ore, but there has been no commitment made to URSA Major beyond the bulk sample.
Prior to founding URSA Major in 1996, Sutcliffe was a senior research geologist with the Ontario government and an associate professor at the University of Western Ontario.
The company began pursuing opportunities in Central Asia, but chose to refocus on Ontario in the late ’90s.
“I decided that I could best move the company forward by focusing on my technical ability and that was best applied close to home,” said Sutcliffe, who holds a PhD in Geology.
URSA Major decided to focus on the boundary between the older rocks of the Superior Province and the younger Southern Province, west of Sudbury, because of a “strong view I had that it was underexplored and had strong mineral potential for nickel, copper and platinum group minerals.”
The company acquired one small property from a local prospector in 2000 and then optioned the nearby Shakespeare Property from Falconbridge. It began drilling at Shakespeare in 2002 and found some significant mineralization.
“That’s what got us into high gear,” said Sutcliffe. “Since 2002, we’ve had a full-time presence on the property.”
URSA Major exercised its option on Shakespeare and has an 88 per cent interest in it, with Falconbridge (now Xstrata) retaining a minority holding.
The company has acquired additional property along the boundary of the two geological provinces west of Sudbury and currently has a total land package of approximately 20,000 acres.
“One of the things we’re most proud of is that we took this project from discovery through to the completion of a feasibility study for about $5 million,” said Sutcliffe.
“The Shakespeare deposit is very homogeneous and it’s quite wide, so we’ve been able to build up an 11 million tonne resource with less drilling than would normally be required in other deposit types.”
At first, there was speculation that the Shakespeare orebody was an extension of an offset dyke from the Sudbury Basin, but that theory was dashed when geochro-nology analysis at the Royal Ontario Museum concluded that Shakespeare samples were 400 million years older.
“One of the interesting things about geology is that processes do tend to be repeated over time, and this is an area that has demonstrated a substantial endowment of nickel and copper over a long period of the Earth’s history,” said Sutcliffe.
While URSA Major is currently preoccupied with getting the Shakespeare Project into production, it is also well-positioned to find more orebodies on property it has assembled.
In 2003, the company acquired the former Agnew Lake uranium mine, 40 km west of Sudbury. Part of URSA Major’s contiguous property package along the boundary of the two geological provinces, it was operated by Kerr Addison Mines Ltd. between 1977 and 1983, and still has a significant uranium resource, said Sutcliffe.
“We are primarily focused on nickel and copper, but would be interested in looking at opportunities to advance the uranium property – most likely by bringing on a partner.”
Last year, URSA Major negotiated an option on a property at Shining Tree, 110 km north of Sudbury. The property boasts an indicated resource of 1.02 million tonnes grading .71% nickel and .36% copper, as well as an inferred resource of 1.49 million tonnes grading .67% nickel and .36% copper.
“It’s a smaller, higher grade deposit that we’re advancing primarily to provide us with auxiliary feed for the Shakespeare project,” said Sutcliffe.
A preliminary economic assessment confirmed its viability as an open pit mine and an eight-hole drilling program has been undertaken to test higher-grade material at depth.
Financing for the development of the Shakespeare project is still up in the air. “We’re working on it and following up on leads,” said Sutcliffe. “The bulk sample will help move things along by demonstrating the viability of the operation.”
Korean Resources Corp. (KORES), a state-owned company that funds resource development and facilitates the supply of minerals from overseas, invested $2.3 million in URSA Major in December 2005 and is one of its biggest shareholders. KORES’ recent investment of US $852 million to help Dynatec Corp. develop its Ambatovy project in Madagascar “demonstrates the clout it has in the mining sector,” said Sutcliffe.
Another potential partner, North American Palladium, operator of the Lac des Iles palladium mine, 85 km north of Thunder Bay, entered into an option agreement with URSA Major in April to finance exploration and permitting of the Shakespeare project, but walked away from the arrangement in August.
However, with a feasibility study completed, permitting under way, nickel prices at record levels and results from a 50,000-tonne bulk sample due in months, Sutcliffe is confident that financing for Shakespeare will materialize.
Having taken the project this far, URSA Major is prepared to make the leap to mine operation.
“My background is in geology and advancing good geological ideas into exploration successes,” said Sutcliffe, “but I’ve been fortunate to be associated with projects that have gone into production. My view is that we’ll take this project through to whatever is required to maximize value for our shareholders and will look at expanding our team to assume operational responsibility.
“On the other hand, if the right investment partner comes along, we would also be prepared to do a deal and bring in another company as operator.”