Atmospheric Leaching > Pilot Plant Results

Skye Resources recently announced the successful completion of the pilot plant testing of its
proprietary Sulphation Atmospheric Leach (“SAL”) Process. The testing was carried out by
SGS Minerals Services in Lakefield, Ontario, Canada. The SGS final report on the last phase
of piloting was received on March 17, 2006. Ten continuous test campaigns were completed
between February and December 2005 using bulk samples of nickel and cobalt bearing
laterites taken from Skye’s Fenix Project exploration license areas in Guatemala in 2004 and
2005.

The flowsheet tested consists of the following unit processes:

 Direct sulphation of limonite by reaction with concentrated sulphuric acid;

 Mixing of sulphated limonite with crushed saprolite and water, followed by grinding in
a ball mill to produce a leach slurry (the limonite sulphation and saprolite grinding steps
constituting leach slurry preparation – LSP);
 Atmospheric leaching (AL) in a series of agitated tanks at 90-100 C and, o

importantly, atmospheric pressure;

 Primary iron removal (PIR) by ground limestone addition to the leach slurry;
 Counter-current decantation (CCD) to separate washed leach residue from pregnant
liquor containing dissolved nickel and cobalt;
 Secondary iron removal (SIR) with ground limestone and air/hydrogen peroxide to
precipitate all iron, aluminum and chromium from the pregnant liquor and separation of
the solids in a thickener;
 Mixed hydroxide precipitation (MHP) with magnesia, followed by thickening and
filtration, to produce an intermediate mixed nickel/cobalt hydroxide for sale to
nickel/cobalt refiners;
 Scavenger precipitation (SP) with lime slurry, followed by thickening, to recover
remaining nickel and cobalt;
 Manganese removal (MR) with lime slurry and air followed by thickening to produce
barren liquor containing only magnesium sulphate.
The capacity of the pilot plant was 160-240 kg/day limonite plus saprolite (dry basis), except
for the leach slurry preparation circuit, which had a capacity of 2,300 kg/day limonite plus
saprolite. The LSP circuit was operated in 5 to 6 hour campaigns periodically to provide leach
slurry for the leaching and downstream unit operations, which operated 24 hours/day.

The first nine campaigns were of five days duration. In six of these campaigns, the “front
end” circuit (LSP, AL, PIR and CCD) was tested, while in three campaigns, the “back end”
circuit (SIR, MHP, SP, and MR) was tested. The final campaign (campaign “PP11”) was run
for ten days and encompassed the entire flowsheet. The byproduct streams (SIR and SP
thickener underflows) were releached and recycled to the AL circuit during this campaign.

The proprietary SAL Process consists of the front end circuit only (see attached block flow
diagram). The back end circuit for MHP production is a commercially proven process
operated by others and was chosen only to show that a good quality nickel/cobalt
intermediate product could be produced from leach liquor generated by the SAL Process. It is
likely that other commercially proven processes could be used alternatively to recover nickel
and cobalt from SAL pregnant liquor.

There were no instances of process-related downtime during the test campaigns,

demonstrating the simplicity and robustness of the SAL Process. Key data and results
from the 10-day integrated campaign may be summarized as follows:

Overall feed composition:

1.82 %Ni, 0.09 %Co, 26. %Fe, 10.2 %Mg
600 kg H2SO4/tonne feed (dry basis)
Acid/Feed Ratio:
87.2 %Ni, 88.3 %Co
Leach Extractions:
85.4 %Ni, 84.8 % Co
Overall Recoveries:
41.6 %Ni, 2.5 %Co, 1.2 %Mg, 4.5 %Mn, 3.8 %S
Product Composition:
The SGS Minerals Services Final Report stated, “Based on the smooth operation of the latter
5 days of the integrated PP11 campaign and the virtually zero downtime of all unit
processes, it can be concluded that the SAL process flowsheet appears fundamentally
sound.”

A great deal of data was collected to establish process design criteria. Skye believes that the
next steps towards commercialization of the SAL Process include scale-up of the key Leach
Slurry Preparation unit processes and extended operation of a larger size pilot or
“demonstration” plant at a project site.

The SAL Process is the subject of US Patent Application No. US 2006/0002835 A1 and PCT
Patent Application No. WO 2006/000098 A1, both published on Jan. 5, 2006. The claimed
priority date is June 28, 2004, the filing date of a related provisional US application.

Given the positive results from the pilot plant program, Skye initiated and completed a
Preliminary Assessment being undertaken primarily by Hatch Ltd., to determine the
approximate capital and operating costs of a proposed 50 million pound Ni per year
expansion of the Fenix ferronickel smelter, itself the subject of a Feasibility Study. Both
studies were completed in the third quarter of 2006. The Preliminary Assessment initially
compared the SAL Process to the High Pressure Acid Leach (HPAL) Process, and the HPAL
Process was selected for detailed cost estimation. Either option would allow exploitation of
the limonite resources associated with the Fenix project.