Nuinsco Resources Ltd
Symbol NWI
Shares Issued 111,089,912
Close 2006-09-13 C$ 0.36
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Nuinsco 's Minago scoping study finds frac sand
2006-09-14 12:05 ET - News Release
Mr. Brian Robertson reports
NUINSCO MAKING GOOD PROGRESS ON MINAGO SCOPING STUDY
Nuinsco Resources Ltd. has provided an update on progress toward completion of the scoping study on its 100-per-cent-owned Minago nickel deposit currently being carried out by Wardrop Engineering Inc.
Metallurgical testing of Minago nickel mineralization by SGS Minerals Services (Lakefield) is progressing well, with results confirming positive past tests indicating that a nickel concentrate grading in the 25-per-cent to 30-per-cent range could be produced. Nickel concentrates typically grade in the 12-per-cent to 20-per-cent range, meaning a high-grade concentrate from Minago would be easily marketable anywhere in the world.
In addition, Wardrop has determined that the cap rock over the projected open pit includes an estimated three million tonnes of fracturing or hydraulic frac sand. Frac sand is used to enhance recoveries in the oil and gas industry and typically sells for between $100 and $300 per tonne to a third-party supplier. Nuinsco is evaluating proposals from marketing consultants interested in selling this material to the oil and gas industry.
"We are very pleased with what we are seeing from the metallurgical testwork, and are confident that these results will be reflected in the scoping study due out next month," said Brian E. Robertson, president. "We are also excited by the potential sale of frac sand which could dramatically enhance the economics of Minago. Significant revenue could possibly be generated while prestripping the open pit deposit prior to beginning nickel mining. The frac sand, along with copper, cobalt, gold, silver, platinum and palladium, represent important byproduct credits all of which add to the potential life-of-mine revenue stream."
Frac sand comprises rounded, spherical, high-purity quartz grains that exhibit compressive strengths greater than 4,000 pounds per square inch. Processing the sand includes washing and grading. Frac sand is used in conjunction with fluids pumped under high-pressure into oil and gas wells to enlarge or scour out openings in oil- or gas-bearing rock or to create new fractures from which oil or gas can be recovered. The unique properties of frac sand, combined with limited supply, have created a tight market for the product, a market that Wardrop estimates will grow by 7 per cent annually to $1.2-billion (U.S.) in 2008 in the United States alone. The frac sand market in Western Canada is estimated to be between 200,000 and one million tonnes per year.
Diamond drill holes at the Minago deposit have penetrated a substantial thickness of the Winnipeg formation basal sandstone. The frac sand is contained within a 10-metre-thick sand layer located at the interface of the overlying limestone cap rock and the Minago nickel deposit. Approximately 25 per cent of the Winnipeg formation basal sandstone is frac sand quality. Nuinsco will carry out further testwork on the frac sand during its 2007 winter drill program.
The Minago project is being supervised internally by Paul Jones, vice-president, exploration, for Nuinsco, who acts as qualified person under National Instrument 43-101. P.J. Chornoby, PGeo, an independent geological consultant, is Nuinsco's external QP for the Minago project.
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