The Araguaia project is located in the north-western Brazilian state of Para, approximately 2,200 km north of Sao Paulo, in the Municipality of Xinguara approximately 100 kilometers southeast of the Carajas mineral province – a centre for major iron ore production in Brazil.
The Araguaia project completed the Scoping Study stage in 2008. During this phase the mineral resource estimate was updated based on additional diamond drilling, now totaling 106,000 m in 2,800 holes. The deposits occur on properties owned by or where Xstrata Nickel has the rights to earn 100% interest by completing a series of cash payments. Based on results to date, the project has the potential to support annual production of 30,000 tonnes of nickel over a 25 year mine life. Araguaia benefits from substantial existing resources, a highly prospective land position and potential access to regional infrastructure (rail, road, power generation and power transmission).
Exploration in 2008 has continued to strengthen the resource base for the Project, currently standing at 80 million tonnes grading 1.6% nickel (at a cutoff grade of 1.2% nickel). In addition to delineating the Core deposits, several Regional targets were identified and tested for nickel laterite mineralization.
On the basis of airborne surveys covering approximately 70,000 square kilometres in the region, Xstrata Nickel has consolidated its ground position over the key targets such that it now controls mineral rights (Exploration Permits) covering 230,000 hectares. Xstrata Nickel has also submitted permit extensions for an additional 130,000 hectares in the same belt.
Based on the current economic situation and financial outlook for the Project, the Araguaia Project has been placed on Care and Maintenance status. A plan has been put in place to maintain the prospective and valuable land position associated with the Project.