Mirabela Nickel Limited - Production Update

ASX Code: MBN
TSX Code: MNB
Number of shares: 422,237,130

PERTH, Australia, Oct. 13 /CNW/ - Mirabela Nickel Limited ("Mirabela" or the "Company") is pleased to provide a production update for the quarter ended 30 September 2010. The full third quarter results will be released on 26 October 2010. 

Production Statistics

		Q1 2010	Q2 2010	Q3 2010
Mining
Total Material Mined	Tonnes	5,456,000	7,099,000	7,424,000
Ore Mined	Tonnes	653,000	663,000	846,000
Nickel Grade	%	0.56*	0.55*	0.55*
Processing
Total Ore Processed	Tonnes	778,000	840,000	942,000
Nickel Grade	%	0.51*	0.52*	0.52*
Copper Grade	%	0.15	0.13	0.12
Cobalt Grade	%	0.02	0.02	0.02
Nickel Recovery	%	48	52	49
Copper Recovery	%	62	67	68
Cobalt Recovery	%	28	30	27
Nickel in Concentrate Produced	DMT	1,991	2,304	2,405
Copper in Concentrate Produced	DMT	721	764	774
Cobalt in Concentrate Produced	DMT	35	40	41
Sales
Nickel in Concentrate Sold	DMT	1,987	2,505	2,359
Copper in Concentrate Sold	DMT	721	824	753
Cobalt in Concentrate Sold	DMT	36	43	37

* The primary difference between the grade mined and the grade processed is due to the additional processing of lower grade material (not classified as ore) whilst the ramp up of the mining operation is catching up to the processing plant. 

Production Update

Ramp up of the Santa Rita operations continued during the third quarter of 2010.

Mining rates and mobile fleet performance improved significantly during the quarter. Material movement targets were achieved during September due to improved equipment availability and productivity, as well as the arrival of the new contractor shovel and the CAT 994 front end loader. The South Pit pre-strip was completed during the quarter with first ore production occurring during September. The mining team continued their focus on waste removal to open up the strike length of the open pit, which will provide more mining flexibility and is vital for the progress towards full production levels. Mining in the North Pit moved through a major fault structure during August and September and this resulted in higher than average levels of fine, chloritic altered material being mined.

The processing plant's performance was impacted by the higher levels of the chloritic altered material and restricted by a planned, major plant shutdown during August. The shutdown, which included a reline of the SAG and Ball mills, was completed on time and on budget. Plant recovery for the quarter averaged 49%, however since some additional changes to the flotation and grinding regimes, recoveries increased to an average above 55% from the middle of September. Recovery improvement work is continuing.

All production continued to be within contract specifications and was sold to Mirabela's domestic customer, Votorantim Metais Niquel S.A.

Total nickel production to date is 6,700 tonnes of nickel in concentrate. Full year production guidance is currently tracking at 9,500 to 10,000 tonnes of nickel in concentrate. The final quarter of 2010 is expected to be strong with improved processing plant throughput, improved plant recoveries and improved mining rates.

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