Junior becomes miner with North Shore project.

• Author: Ross, Ian
• Position: SPECIAL REPORT: MINING

Ursa Major Minerals is bringing its $120 million Shakespeare nickel-copper deposit west of Sudbury into commercial production.

The Toronto-based junior received notice in mid-September that it's closure plan for its mine and mill operation was accepted by the Ministry of Northern Development and Mines.

The closure plan, prepared and filed by Golder Associates Ltd., is a mandatory requirement before starting mine production.

Shakespeare is located 70 kilometres (km) west of Sudbury, just north of Highway 17 on a high ridge about one kilometres from Agnew Lake.

Currently, their access is through Nairn Centre from the Worthington Road off Highway 17.

There the company has permits for two open pits (Shakespeare East and West Zones), with a mill to process 4,500 tonnes of ore per day.

The property will be developed in stages, beginning with mining of ore for off-site processing at Xstrata's Strathcona mill in Sudbury on an interim basis until the company's own mill is running in 2009.

The company is currently finishing up crushing and hauling a 50,000-tonne bulk ore sample from Shakespeare at Strathcona. Once that is wrapped up, commercial production will just continue on later this year.

Company president Richard Sutcliffe says the sample will enable Ursa to test mining conditions and verify grades and metallurgical characteristics for commercial mining. The company expects the bulk sample will provide some significant cash flow, depending on nickel prices.

"We don't know what recoveries will be through the Strathcona mill. We've done a lot of test work on developing a circuit and we certainly have feasibility estimates of metallurgical recoveries" but they will adjust their circuit to handle our ore.

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The company completed a positive full feasibility study last year envisioning an operation with a seven-year mine life.

The deposit contains a diluted probable reserve of 11,226,000 tonnes grading 0.33 per cent nickel, 0.35 per cent copper, 0.02 per cent cobalt and 0.9 grams per tonne precious metals.

Sutcliffe says there's significant upside for an extended mine life beyond the seven years. As many as 150 direct jobs will be created.

The company is putting together financing for mill construction scheduled for early 2008.

"Financing for the development will require a debt-equity combination," says Sutcliffe. "We've raised money for the project...