Further drilling at Santa Rita, Mirabela's principal nickel project in Brazil, has revealed new intersections that are wider and have a 15% higher grade on average than previous intersections used in the open-pit's last reserve estimate.  The results from the four rigs used to drill underneath the Brazilian project have convinced Mirabela Nickel to push further into the nickel sulphide orebody in an attempt to increase its current 500,000 tonne Ni reserve. 

One 700m deep drill hole intersected 62m at 0.95% Ni while another, at 400m depth, intersected 119m at 0.93% Ni, grades and widths that Mirabela believes will add an underground mining element to the project.  Managing Director Nick Poll, says that an underground mining operation is a real possibility for Santa Rita if early indications of strong mineralisation around the open-pit's base continues another 300 metres and stays open at depth.

Mirabela expects Santa Rita to begin production in mid-2009 - currently the mineral explorer has finished around 30% of the project's construction.   Since the deposit is nickel sulphide instead of nickel laterite, the company won't have to worry about complicated hydrometallurgical extraction plants.  A crush-grind-flotation concentrator is far simpler and less costly.  The deposit is billed by Mirabela as the largest nickel sulphide resource in South America, and the biggest greenfield nickel sulphide find made anywhere in the last 12 years.  That kind of size will cost the Australian company an estimated $322 million, to produce 14,000 tonnes of nickel a year during its first stage.  In contrast, Vale's Inco Goro nickel laterite project in New Caledonia is facing costs of $3.2 billion for an annual production rate of 60,000 tonnes of nickel.

Apart from delving into Santa Rita's potential underground resource, Mirabela has been investigating the possibilities of a nickel sulphide smelter.  The preliminary scoping study results led Poll to comment that a smelter at Santa Rita could be an important value proposition for the Company, and a full feasibility study of the proposal is now underway.   

The mineral explorer has two other nickel sulphide deposits to concentrate on in Brazil - the Palestina project, 25km to the south of Santa Rita, and Sao Francisco, an exploration project in the state of Sergipe, believed to have the potential for large tonnage with disseminated mineralisation that indicates similarities with Santa Rita.