MAIDEN UNDERGROUND RESOURCE FOR SANTA RITA

 PERTH, AUSTRALIA. Mirabela Nickel Limited (TSX: MNB, ASX: MBN) is pleased to announce a maiden underground resource for Santa Rita .

The underground resource lies immediately below the current open-pit resource between 500 and 1000m vertical depth.

About 95% of the underground resource is contained within one continuous zone of mineralization, with the remaining 5% of the resource located within two footwall horizons. The main mineralized zone has an average true width of about 90m, a strike length of 300m and a down plunge extent of 650m. The best intersection to date (158m at 0.99% Ni) is the deepest hole at the north end of the resource with mineralization open towards the north, south and at depth.

Mineralization in the main zone is continuous and consistently above 0.5% Ni with higher grade intersections up to 65m @ 1.22% Ni and 0.36% Cu. The drill hole spacing is currently between 100 and 120m. 

Scoping studies on the underground mining project have been positive and the resource seems highly amenable to bulk underground mining techniques (between 3 and 5mtpa production rate). Such operations have mining costs as low as US$20/t. Planning is now underway for a pre-feasibility study that is to be managed by Trevor Mulroney - a mining engineer with considerable underground mining experience. An expansion of the Santa Rita concentrator, to include underground production on this scale, is possible and would be expected to capture substantial economies of scale and infrastructure.

Preliminary analysis indicates that the underground resource has similar metallurgical characteristics to the open-pit reserve. About 82% of the underground resource is hosted by the preferred pyroxenitic rocks that contain less non-sulphidic nickel than other host rocks in the resource. The combination of a higher head grade and pyroxenite content are expected to lift recoveries to about 78% for the underground resource, compared with the 70% average recovery for the open-pit reserve. Metallurgical test work is underway to confirm recoveries and processing characteristics for the underground resource.

The Company is targeting 60 to 80mt of minable underground resources to support underground production of about 3mtpa for over 20 years. This maiden underground resource is an excellent start to achieving this objective.

Further drilling is planned, but is awaiting completion of project financing early next year.

Background
Mirabela Nickel Ltd owns 100% of the world class Santa Rita nickel sulphide project and is listed on the Australian and Toronto stock exchanges. With a JORC Indicated open-cut resource of 130mt grading 0.60% Ni for 780,000t of contained Ni, Santa Rita is the largest nickel sulphide discovery world-wide in the last 12 years.  

Construction of a 6.4 mtpa nickel sulphide concentrator commenced in November 2007. Construction is now about 65% complete and the project remains on track to commence production mid 2009.

The plant will produce 18,500 tpa of nickel in a sulphide concentrate from one open-cut mine starting from mid 2009 increasing to 27,000 tpa by mid 2010. At this rate of production the project will have a mine life of at least 20 years.