The year 2011 was a tough one for Ursa
Last June, a dissenting group of
stakeholders sought to replace the board due to a lagging performance
on the TSX. Their advances were rebuffed, but then operations at the
company’s Shakespeare property west of Sudbury were halted when a
processing agreement couldn’t be renegotiated with Xstrata Nickel for the use of its Strathcona Mill.
That’s where things stood until July
when Ursa merged with Prophecy Platinum Corp., and now the discord
has been laid to rest, according to Prophecy’s president and CEO
John Lee. With a vote of 98.9 per cent in favour of the merger,
stakeholders showed a vote of confidence in having a larger company
carrying the project forward, Lee said.
“I wouldn’t say we’re one happy
family…but I think we’ve comfortably put all that behind us and
reunited in a way to look for ways to advance Prophecy Platinum going
forward,” he added.
In July, Prophecy Platinum merged with Ursa Major Minerals, taking over the Shakespeare property, a nickel-copper-PGM interest located 70 km west of Sudbury near Webbwood.
Now the company is refocusing its
efforts on Shakespeare, a nickel-copper-PGM interest located 70 km
west of Sudbury near the town of Webbwood. Lee said the company is
concentrating on “clearing up the accounts payable” and putting
out an updated resource estimate based on the drilling that’s
occurred in the last year.
Over the year, the company delivered a
total of 151,910 tonnes of ore to the Strathcona Mill at a grade of
0.314 per cent nickel, 0.368 per cent copper, 0.019 per cent cobalt,
0.348 g/t platinum, 0.389 g/t palladium, 0.203 g/t gold and 2.164 g/t
In reshaping its efforts, the company
will also seek out more streamlined alternatives for operations at
Shakespeare. Ursa formerly outsourced all aspects of the operation to
contractors; equipment was rented and labour was contracted, and with
no mill on site, ore was trucked to Strathcona Mill for processing,
following which contractors were again hired for smelting.
It all made for a very cost-prohibitive
process, which was exacerbated later in the year by falling nickel
prices. Lee said Prophecy will look at alternatives like setting up
its own mill and trucking the concentrate instead of the ore, as well
as owning versus leasing equipment. The company will also look at a
break-even price for nickel to determine the project’s feasibility.
“All in all we’re not looking for
production this year,” Lee said. “If we were to commission this
to production we’ve got to do a thorough own-versus-rent analysis
and, according to previous feasibility estimates, you’re looking at
$100- to $150-million to build a mill and purchase your own mining
fleet. Theoretically, the operating costs should come down
A feasibility study should start near
the end of 2012, with results ready in 2013, Lee said. At that time,
the company will decide whether to go forward with Shakespeare.
But it’s unlikely the company will
try to go it alone. Prophecy is aiming to generate interest in
stakeholders currently invested in another of its projects, the
nickel-copper-PGM Wellgreen project in the Yukon. Ideally, Prophecy
would like to see a major miner take over Shakespeare, with Prophecy
retaining a working interest.
“We thought (Shakespeare) would be a
good baby project to get started and get to know each other from a
joint venture perspective,” Lee said. “Then we can move on to
Wellgreen as a second joint venture starter.”
As plans materialize, Lee said Prophecy
will work with local communities and First Nations to ensure they’re
kept informed. The company recently reached an operations and
benefits agreement with the Kluane First Nation with regard to its
Wellgreen project—a first in the area and proof of the company’s
commitment to operating responsibly, Lee said.