Estimate indicates metals deposit near Ely shows promise

(AP) A metals deposit being explored near here contains an estimated 347 million tons of mineralized material that could be mined, according to an official from Duluth Metals.

The company has been drilling exploratory holes for copper, nickel, cobalt, palladium and other metals for two years on about 2,600 acres of leased state, federal and private land. The estimate, completed by Scott Wilson Roscoe Postle Associates of Toronto, shows there are enough metals there to make an underground mining operation economically feasible, said Henry Sandri, Duluth Metals president and chief executive officer.

"It's more than anticipated," he said. "We had hoped we would get numbers in excess of 200 million tons based on the interpretation of our own geologists."

He also added: "But we have a lot of work to do to improve on it. We have a lot of drilling left to do to define it tighter and find the sweet spots."

The estimate is based on results of 44 holes drilled by Duluth metals, along with 14 previously drilled holes. The estimate doesn't guarantee that a mine would be developed.

The company, a spin-off of Wallbridge Mining of Sudbury, Ontario, plans to drill another 30 to 50 holes this year. A preliminary scoping study and prefeasibility study could begin in 2008.

Ernie Lehmann, president of Minnesota Exploration Association, said estimates indicate there are more than 4 billion tons of mineable mineral deposits in northeastern Minnesota.

A commercial metals mine has never been developed in Minnesota. But with metals prices high and new methods of processing available, companies say mines could be economically feasible.

Two other exploration companies, PolyMet Mining Corp. and Franconia Minerals, are seeking to develop metals mines. PolyMet's would be an open pit mine south of Babbitt. Franconia's would be an underground mine, also near Babbitt.