Canadian Arrow Kelex nickel production update
SUDBURY, ON, Sept. 14, 2011 /CNW/ - Canadian Arrow Mines, Ltd. (CRO: TSX-V) (the "Company") is pleased to report on the progress achieved towards placing its Kelex and Alexo nickel mines located near Timmins, Ontario back into production.
Canadian Arrow President, Mr. Kim Tyler said, "We have successfully achieved more significant milestones towards resumed early production at Kelex and Alexo. We have received all regulatory approvals for our permitting and Closure Plan requirements. Early metallurgical results demonstrate a very marketable concentrate product can be produced. Our current efforts are focussed on concluding definitive custom processing and concentrate off-take agreements. We are also engaged in pursuing a number of financing opportunities including unique options alternate to equity dilution. The Company will defer guidance on production timelines until such agreements and arrangements are disclosed. "
The Company plans to resume production with a first phase, small tonnage,/high grade open pit production from the Kelex Central West pit that was exposed, but only superficially mined, before suspension of production in 2005 due to nickel prices falling below US$5/lb. Cash flow received from Phase 1 will be used to evaluate the Phase 2 open pit and underground mine expansion. Cash flow from the Phase 2 expansion will then be directed at advancing the Company's flagship Kenbridge nickel project near Kenora Ontario. Kenbridge has an NI 43-101 measured and indicated resource of 98M lbs of Ni and 52M lbs of Cu contained within 7.1M tonnes averaging 0.62% Ni and 0.33% Cu.
Permitting
The Company has all regulatory permits in place required for a production restart including a filed Closure Plan, an Exemption to Refine Domestically, a Certificate of Authorization for Industrial Sewage Works, and a Permit to Take Water. Furthermore the Company is pleased to report that it has recently received an upgraded temporary Permit to Take Water from the Ontario Ministry of the Environment that will allow the pre-production pit de-watering phase to be significantly shortened from nine months to approximately one month.
Metallurgical Test Work
The company has received reports assessing the metallurgical amenability and quantitative mineralogy of the high grade massive and semi-massive footwall style portion of ores at Kelex under several flow sheet simulations. The optimal open cleaner flotation metallurgical testwork achieved 86.1% Ni and 74.9% Cu open cleaner recovery at a combined concentrate grade of 10.2% Ni+Cu. The testwork was performed on planned ore for the Phase 1 production stream. The opportunity remains for improved metallurgical recoveries and performance with recommended additional grindability and locked circuit test work.
Custom milling and Concentrate Off-take Agreements
The Company has been engaged for several months in negotiating terms on a number of opportunities towards custom milling of the Kelex ores to produce marketable concentrates and the purchase (off-take) of the concentrates. As such, the company has signed a number of non-disclosure agreements forbidding it to comment further at this time. The anticipated metallurgical performance and quality of concentrate product as indicated by the metallurgical testwork noted above has a critical impact on achieving favourable custom milling and concentrate off-take terms.
The Alexo and Kelex mines have historically produced 87,000 tonnes averaging 3.06% nickel from both underground and open pit mining. An NI 43-101 Technical Report (April 2011) highlights an indicated resource of 9.92M lbs of nickel contained in 473,000 tonnes grading 0.96% Ni for the Kelex and Alexo projects. Exploration potential exists along strike and at depth on both zones.
Mineral resources that are not mineral reserves do not have demonstrated economic viability.
The information in this release was prepared under the direction of Mr. Kim Tyler, P. Geo., President of the Company, a Qualified Person as defined by NI 43-101.
About Canadian Arrow Mines:
Canadian Arrow Mines Limited is developing two advanced nickel/copper mining projects located near existing infrastructure in Ontario, Canada. Its principal asset is the Kenbridge nickel-copper sulphide deposit located near Kenora, Ontario that remains open in three directions, is equipped with a 620 m shaft built and explored by Xstrata Canada Corporation (formerly Falconbridge Limited) and has never been mined.
Highlights of an updated NI 43-101 Preliminary Economic Assessment Technical Report (PEA) on Kenbridge reported Sept. 4, 2008 include an operating cash cost/lb payable net of copper credits of US$3.47/lb nickel. At life of mine metal prices of US$10/lb Ni and US$2.50/lb Cu; a CD$1.00:US$0.90 exchange rate and a 7.5% discount rate the PEA concludes a Net Present Value of CD$253M is achievable. In addition to the work that Xstrata Canada Corporation (formerly Falconbridge Limited) expended, Canadian Arrow has additionally expended over $10M since acquiring the project.
The Company also owns the past producing Alexo and Kelex mines located in the Abitibi nickel district east of Timmins Ontario containing NI 43-101 indicated resources of 473,000 tonnes grading an average 0.96 % nickel which is the focus for earliest resumed production.
Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Additional information relating to Canadian Arrow is available on SEDAR at www.sedar.com
This press release may contain "forward-looking statements" within the meaning of the Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements are made as of the date of this press release and the Company does not intend, and does not assume, any obligation to update these forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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