Metals X Suspends Study for $2.19 Billion Wingellina Project

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Researched by Industrial Info Resources Australia (Perth, Australia)--Amid the current decline in activity in Australia's mining sector, Metals X Limited (ASX:MLX), a Western Australia-based company, has temporarily suspended its definitive feasibility study (DFS) for the Wingellina Nickel-Cobalt Project, just two months after appointing SNC-Lavalin Pty Limited to study the project.

The board's decision not to proceed with the project, at this stage, is based on information from the cyclical market, which indicates a trough in commodity prices that makes the project currently unfavourable.

"After due consideration of the current depressed equity and resource market and cyclical low in nickel prices, the Board has concluded that a deferral of expenditure is prudent," said Peter Cook, the Chief Executive Officer of Metals X.

The Wingellina project is in the eastern region of Western Australia, bordering Western Australia, Northern Territory and South Australia in the Central Musgrave Ranges.

The resource is estimated to be one of the largest undeveloped nickel limonite projects that, based on a previous feasibility study, is economically viable. During the anticipated 40-year lifespan, it is estimated that 40,000 tons of nickel and 3,000 tons of cobalt could be extracted annually.

The positive pre-feasibility study was competed in 2008, and the project value is estimated to be $2.19 billion (AUD$2.3 billion). Although Metals X temporarily suspended the current study, it is able to continue in other aspects for work in Western Australia. The company also intends to internally continue with government applications for infrastructure and public environmental review (PER) required from the Environmental Protection Authority. The work completed on these long lead-time items will help streamline the DFS when it resumes.

The Wingellina project will continue to be held in the portfolio of Metals X; however, the company will continue to focus on their other projects during this time, which include tin mining in Tasmania. Industrial Info is tracking numerous projects involving Metals X, including the Waratah Mount Bischoff tin mine, the Central Murchison gold mine and processing plant, and the Rover 1 gold/copper mine and processing plant.

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