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Regency Mines and Direct Nickel considering geothermal energy source for Mambare JV

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Regency Mines (LON:RGM)  said its Mambare nickel joint venture with Direct Nickel Ltd (DNi) has today filed an exploration licence application (ELA) with the Mineral Resources Authority (MRA) of Papua New Guinea covering the Mount Lamington and Hydrographers Range volcanic areas.

The joint venture will explore the region for geothermal heat, which could provide cheap, renewable energy for process heat and electrical energy for use in any future mine and DNi process plant the JV may build at the Mambare nickel laterite project.

The ELA covers an area of 1473 square kilometres, which includes the north-eastern half of Mt Lamington and the whole of the Hydrographers Ranges and Managlase volcanic centres.

Mt Lamington is located 45 kilometres east of the Mambare project area and 20 kilometres southeast of the regional centre of Popondetta.

The two volcanic centres are located 25 kilometres east-southeast of Mt Lamington, and close to the deepwater port of Oro Bay, giving a strong economic advantage to any mine at Mambare, being accessable across benign coastal plains rather than the steep ranges that are more typical to PNG, Regency said.

Hydrographers Range is a large volcano that has been active within the last 10,000 years. The Mangalase Plateau area contains around 30 volcanic vents and is considered prospective for geothermal heat.

Geothermal heat could significantly lower the operating costs of any future mine and DNi process plant serving the Mambare project.  It also has the potential to provide power to the greater Oro Province and to reduce the district's dependence on imported fossil fuels.

Geothermal energy production is an established energy source increasingly used for power generation in the Philippines, Iceland, California and elsewhere. Within PNG, geothermal energy is currently used for power production at the Lihir gold mine in nearby New Ireland Province.

DNi believes that the Mambare project, with its strong nickel resource upside, the revolutionary DNi process for nickel laterites and the potential of low cost, green geothermal energy, could develop into a large and truly world-class nickel laterite project operating in the lowest quartile of world nickel production cash costs.

Regency last year invested A$6 million in DNi in return for a 7.31 percent stake in the company.

The joint venture was agreed in November 2010. The partners agreed to co-operate on a 50/50 basis in the piloting and application of DNi's advanced nickel/cobalt leaching technology at Mambare.

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