Brilliant Mining Corp
Brilliant Mining Corp. (BMC: TSXV) is a leading junior explorer and producer of nickel. This year, Brilliant was again selected in the TSX Venture 50TM for ranking as one of the top 10 TSX Venture listed mining companies based on revenue, return on investment, market cap growth and trading volume.
The Company generates cashflow from its 25% interest in the producing Lanfranchi Nickel Mine, located in the World Class Kambalda Nickel District of Western Australia. Brilliant has consistently increased nickel production for the past 3 years and forecasts to produce approximately 1,800 tonnes (4 million lbs) of Ni metal from July 2008 to June 2009, an increase of 141% over the same period in 2005-2006.
Brilliant Mining – Increased mineral reserves
Following a busy summer of drilling and exploration, Canadian Venture listed Brilliant Mining Corp. (BMC: TSXV) has reported an 8% increase in Mineral Reserves to 2.7 million tonnes of ore grading 2.42% Ni for 146.1 million lbs of contained nickel.
In addition, a delineation drill program has commenced down-plunge of the Deacon orebody with the potential to add significant mineral resources and reserves at the Company's 25% owned Lanfranchi Nickel Mine, located in the world class Kambalda Nickel District of Western Australia.
BMC has not been deterred by the current weakness in Nickel prices and is determined to continue its development efforts. Much of the slump in prices is attributed to the falling demand from some of its formerly heavy consumers such as China. In fact, the price weakness has prompted some major nickel producers to cut down their production and in some cases the complete closure of their mines, temporarily of course. Xstrata Nickel announced that it is shutting down its Falcondo nickel operations in the Dominican Republic because of "difficult market conditions." With current nickel prices having almost reached the cost of production however, prices may well have bottomed out now.
This makes companies such as BMC interesting stories and its continued development endeavours therefore strengthen its investment case. BMC is a nickel producer with assets in prolific nickel producing areas such as the Kambalda Nickel District. The area is home to few other nickel companies such as Australian listed Independent Nickel and Panoramic Resources. In addition, BHP Billiton also has an operation in the Kambalda Nickel District.
After production of 7,303 tonnes (16.1 Mlbs) of contained Ni metal from the Lanfranchi mine in 2007/08 the Mineral Reserves for the project increased by approximately 12,300 tonnes (27.1 Mlbs) of Ni metal. The reported overall gain compared to the Mineral Reserves as at 30 June 2007 was due to significant Ore Reserve growth achieved from both Deacon and Lanfranchi orebodies.
Under the current mine plan and existing processing contracts, production of the delineated Ore Reserves at the Lanfranchi Mine is estimated to provide the Company with approximately 9,600 tonnes (21.1 Mlbs) of Payable Nickel. Payable Nickel Metal is Brilliant Mining's attributable nickel metal post recovery loss, smelter fee and ancillary charges.
We contacted the management to get their views on falling Nickel prices and prospects for a company suck as BMC in that environment. The CEO, John Williamson opined that relatively high grades of the deposit, would enable BMC to withstand low Nickel prices and remain profitable. It certainly appears to be the case as indicated by a steep increase in the Operating cash flow for the nine months ended June 30, 2008 ($14 million Vs $0.58 million comparable period last year).
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