Amur Minerals Corporation - Re: AMC Stream Log - [link] Minesite.com 25.02,14 Kun-Manie Has...

[link] Minesite.com 25.02,14 Kun-Manie Has Been Completely Revamped, Says Amur’s Robin Young Within the next six-to-eight weeks, says Amur’s chief executive Robin Young, there should be significant new developments as regards the economics at the Kun Manie nickel project in Russia. As it stands, the last published information relates to a study that was completed back in 2007 by SRK Consulting. This showed a projected net present value of US$84 million on a resource that has now significantly increased following several subsequent seasons’ worth of drilling. It now stands at an impressive 830,000 tonnes of nickel equivalent, which makes it one of the top 20 nickel sulphide deposits in the world, according to Robin. The knock-on effects are immediately apparent. “We’re able to push far more tonnage through the plant in the earlier years”, says Robin. The latest Amur literature speaks of an increase in throughput capacity of the order of 50 per cent, and since the last study there have been considerable metallurgical improvements too. But that’s not all. More than six years on, the Russian tax regime is now far more benign. “The profit tax has been brought down to zero for five years”, says Robin, “and then to ten per cent for five years. And they’ve also graduated the royalty tax.” Precisely what difference that will make will become clear in due course, but in the original study the tax assumption was 24 per cent so it’s quite a change. “We anticipate improvements on the internal rate of return and the NPV”, says Robin That’s all to the good, but there are pressures too. “The two big issues are the road to site and the power line”, says Robin. The original 2007 plan called for 40 MW of power to help the company mine four million tonnes of ore per year from three open pits. Power was to be sourced via a new power line to be built by the state utility, and the costing of such a power line was put at around US$77 million. Now though, inflation has driven that estimated cost up by a factor of more than three, and on-site power instead looks a far more realistic option. Amur reckons it can put on-site power in for US$82 million, although the cost of the road to site will now grow beyond the originally budgeted US$140 million as it will need to be able to handle the transportation of fuel. “Our success is all about cracking this remoteness”, says Robin. “We’ve got to handle getting supply to site and power.”In the background is the newly-raised option of using Zeppelins, which given the vast distances and inhospitable conditions in Far Eastern Russia, isn’t as nutty as it sounds. SP Angel commented on the concept a few weeks ago, and the benefits could be significant. After all, building a road to Kun Manie capable of supporting fuel loads would cost, says Robin, between US$100,000 and US$1 million per kilometre. All-in, the total could ring in at as high US$250 million. Zeppelins, able to dock at various of the ports Amur will be using, would wipe that cost out altogether. As yet, a fleet hasn’t been put together. “We’re watching it closely”, says Robin. “We’re not committed.” In the meantime, let’s see what the upcoming release says about the economics. “This project has been completely revamped and redesigned”, says Robin. It’ll be interesting at last to get the detail.