Hard Creek Nickel Corporation
TSX VENTURE : HNC

Hard Creek Nickel Corporation

December 10, 2007 12:41 ET

Hard Creek Nickel Corporation: Preliminary Assessment for Turnagain Nickel Project Shows Positive Economics With Potential 29 Year Mine Life

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 10, 2007) - Hard Creek Nickel Corporation (TSX VENTURE:HNC) today announced that AMEC Americas Limited (AMEC) has completed a positive Preliminary Assessment (the "Study") of the Company's 100% owned Turnagain Nickel Project, located near Dease Lake in British Columbia, Canada. The Study dated December 10, 2007 and entitled "Updated Preliminary Assessment of the Turnagain Nickel Project", will be filed on SEDAR within 45 days and available at the same time for viewing on the company's website www.hardcreek.com.

The Study is based on a measured, indicated and inferred mineral resource estimate completed by AMEC. This estimate incorporates a revised and expanded geological interpretation of the Horsetrail zone and peripheral area which includes 19 drill holes from the 2007 drilling program. Timing of the Study did not allow the resource estimate to include an additional 32 infill and stepout holes for a total of 11,933 metres (39,150 feet) drilled in 2007. Samples from these drill holes have been prepared and are in the process of being analyzed.

The Study initially considered nickel recovery by both the production of a saleable concentrate and a hydrometallurgical process. Completion of the study was based on the hydrometallurgical process option given its better economic viability. Results presented below are for the open pit mining and hydrometallurgical process scenario.



Key parameters and results:

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Base Case Nickel Price US $ 7.50/lb
Assumptions -------------------------------------------------------------
Cobalt Price US $11.00/lb
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Copper Price US $ 1.40/lb
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Exchange Rate (US$/CDN$) 0.95
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Resources at Measured and 489 million tonnes @
0.10% NiS Indicated 0.163 % NiS and 0.012 % Co
Cut-Off -------------------------------------------------------------
Inferred 560 million tonnes @
0.152 % NiS and 0.011 % Co
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Mining & Strip Ratio 0.44:1
Production -------------------------------------------------------------
Annual Throughput 18 million tonnes
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Daily Production Rate 50,000 tonnes
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Overall Ore Milled 516.6 million tonnes @
0.160 % NiS and 0.011% Co
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Metallurgical 73.6% Ni Overall Recovery
Recoveries ------------------------------------
66.5% Co Overall Recovery
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Average Annual 20,397 tonnes Ni in nickel hydroxide
Production ------------------------------------
1,301 tonnes Co in cobalt hydroxide
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Capital Cost CDN$ 1.38 billion
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Operating Cost CDN$ 9.43 per tonne milled
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Life of Mine 29 years
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Payback 6.4 years
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Internal Rate
of Return 12.2 %
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Net Present 8 % discount CDN$ 422 million
Value -------------------------------------------------------------
10 % discount CDN$ 187 million
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Note: "% NiS" refers to nickel percent that is present in sulfides.


"Management is pleased with the results of the Study," said Mark Jarvis, President of Hard Creek Nickel. "Given recent escalating mine capital cost projections we are encouraged to find out that even with these increases the preliminary assessment came out positive with a mine life of 29 years. AMEC's assessment indicates that the deposit is potentially mineable and has identified that further work is justified. Hard Creek will be undertaking additional work in all major areas to advance the project to the pre-feasibility level. Confirmation and availability of the required power for the project has also been identified by AMEC as critical. Hard Creek is aggressively pursuing all possible options for providing sufficient power to make the project feasible."

Hard Creek is waiting for analytical results from most of the 32 infill and stepout holes around the Turnagain deposit from the 2007 drilling program which were not included in the mineral resource estimate stated in the Study. These results are expected to increase the overall resource and upgrade the confidence level of a portion of the current inferred mineral resource. Analytical results from our drilling program will be released as they become available. An updated mineral resource estimate will be provided once all of the results have been received.

Recent drilling results obtained since the closing date of the Study have already indicated the potential to include platinum and palladium as a portion of our overall Turnagain deposit resource (see news release dated November 28, 2007). These results were obtained within the limits of the ultimate pit identified in the Study. As previously stated, the potential to include platinum and palladium as a portion of our overall resource could be significant. Close spaced drilling will be required during the next drill season to determine the significance and extent of this mineralization.

Turnagain Nickel Project Overview

The Turnagain Nickel project, which is 100% wholly-owned by Hard Creek, is located in British Columbia about 1350 km (835 miles) northwest of Vancouver and 70 km (44 miles) east of Dease Lake. The property consists of 81 contiguous mineral claims covering an area of approximately 29,370 ha (72,570 acres). Nickel and copper sulfides were first identified on the property in about 1956 with Falconbridge Nickel Mines completing the first exploration programs during the period from 1966 to 1973. Exploration to date on the Turnagain property has included geological mapping, geophysical and geochemical surveys and more than 75,620 metres (248,100 feet) of diamond drilling in 304 drill holes. The total includes an additional 56 drill holes (32 infill and stepout holes from the Turnagain deposit and 24 exploration holes) which were completed since the closing date of the Study.

Mineral Resources

The updated mineral resource estimate for the Turnagain deposit was performed by Dr. Guillermo Pareja of AMEC under the guidance of Mr. Greg Kulla, P.Geo. of AMEC. A significant improvement between this estimate and previous estimates is the use of geologic domains in the model. Previous models, which used grade shells and did not have the benefit of a lithologic model, showed conditional bias and local excessive smoothing.

The table below presents the estimate of the resource of the Turnagain Nickel deposit using a 0.10% NiS cut-off, as at September 25, 2007, of 489 million tonnes of Measured and Indicated Resources at 0.163% NiS and an additional 560 million tonnes of inferred Resources at 0.152% NiS. A total of 42,128 metres (138,215 feet) of diamond drilling in 158 drill holes were used in interpolating grade in the resource area.

The mineral resources of the Turnagain deposit were classified in accordance with CIM Definition Standards and Best Practices referred to in NI 43-101 which have a reasonable expectation of economic extraction. The mineralization of the Project satisfies criteria to be classified into Measured, Indicated and Inferred mineral resource categories.



Mineral Resource Estimate Table
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Cut-off Grade Tonnage % NiS % total Ni % Co
at 0.10% NiS (thousands)
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Measured 59,464 0.184 0.250 0.011
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Indicated 429,688 0.160 0.218 0.012
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Measured + Indicated 489,152 0.163 0.222 0.012
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Inferred 560,052 0.152 0.204 0.011
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The sulfide nickel and cobalt grades are based on an analytical procedure employed by Acme Laboratories that consists of a concentrated hydrogen peroxide plus ammonium acetate leaching solution that is believed to be selective at dissolving nickel and cobalt from sulfide mineral species while leaving the nickel and cobalt in silicates undissolved. As a precautionary step all the sulfide nickel grades were assigned a value of zero if the corresponding sulphur assay was less than 0.2% S. Sulphur assays were based on Leco furnace method except for results obtained in 2006 which were ICP analysis. This precaution may cause an underestimation of the nickel resource and could be large enough to be a material impact. However, this approach limits the possibility that an overestimation of the nickel resource has occurred.

Mining and Processing

The mining assessment for the Turnagain nickel deposit is based on typical industry standards for a preliminary assessment study with regard to the nature and mineability of the resource. The Study initially considered nickel recovery by both the production of a saleable concentrate and a hydrometallurgical process. Completion of the Study was based on the hydrometallurgical process option given its' better economic viability.

The proposed mining operation is a conventional shovel and truck open pit mine feeding a 50,000 tonne per day process plant using standard mineral flotation technology. Throughput analysis was not performed as part of the Study. Mining and processing of the deposit will be initiated in a "starter pit" which has been scheduled to maximize the production of high-grade material during the first five years, to shorten the capital payback period. Lower grade material from the starter pit will be stockpiled and fed to the mill in the later years of operation. The pit will expand in phased pushbacks until the ultimate pit limits are reached. The table below shows the contained tonnes and grade in the ultimate pit shell. About 67% of the mineral resource contained in the ultimate pit is in the Measured or Indicated category.



Ultimate Pit Tonnes and Grade Table
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Cut-off Grade Tonnage % NiS % total Ni % Co
at 0.10% NiS (thousands)
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Measured 56,611 0.187 0.252 0.012
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Indicated 290,871 0.164 0.222 0.010
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Measured + Indicated 347,482 0.167 0.227 0.010
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Inferred 169,941 0.145 0.199 0.010
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Material for processing will be hauled to a primary crusher located near the southwest rim of the Main Pit. The mine at the 50,000 tonne per day throughput has a potential life of 29 years with approximately 516.6 million tonnes at 0.160% NiS and 0.010% Co to the mill at an average stripping ratio of 0.44:1. The construction schedule is estimated at 24 months.

Feed to the mill will be processed using a concentrator and hydrometallurgical process facility on-site to produce separate nickel and cobalt hydroxide products that will be trucked and shipped out of the province through the Port of Stewart, for sale to ferronickel producers. In addition, a separate copper concentrate will be produced which can be sold to a copper smelter. Processing will be based on a conventional nickel sulfide flotation flowsheet to produce a sulfide concentrate followed by a hydrometallurgical process to convert nickel and cobalt from its sulfide forms to a hydroxide form.

The overall metallurgical recoveries of metals have been estimated as follows:



Overall Metallurgical Recoveries (%)
-------------------------------------------------
Metal Concentrator Hydromet Cumulative
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Nickel 77.5 95 73.6
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Cobalt 70 95 66.5
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Copper 50 95 47.5
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Metal in Saleable Product
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Average Annual Life of Mine
Metal Production Production
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Nickel (in hydroxide) 20,397 tonnes 591,525 tonnes
(44.9 million lbs) (1.304 billion lbs)
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Cobalt (in hydroxide) 1,301 tonnes 37,734 tonnes
( 2.8 million lbs) (0.083 billion lbs)
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Copper (in sulfide) 2,281 tonnes 66,157 tonnes
( 5.0 million lbs) (0.145 billion lbs)
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Saleable product would be paid for on the basis of 85% for nickel contained in nickel hydroxide and 80% for cobalt hydroxide and copper in copper sulfide.

Capital and Operating Costs

The initial capital cost of the project is estimated to be $CDN 1,381 million in 3rd Quarter, 2007 Canadian dollars. A contingency of $CDN 250 million has been included in this cost. The capital cost has been split in the following manner:



Capital Cost Estimates
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Type Area CDN $M
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Direct Mining 116.3
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Site Development 66.2
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Main Process Facilities 390.9
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Hydromet Plant & Reagent Services 106.0
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Ancillary Buildings & Facilities 66.7
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Tailings Facility 44.0
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Utilities 2.2
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Total Directs 792.3
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Indirect Owner's Cost 79.2
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Construction Indirects 64.7
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Engineering Procurement & Construction Management 95.1
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Construction Camp & Catering 32.4
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Capital Spares 22.0
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Freight 38.5
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Start-up & Commissioning Allowance 6.5
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Total Indirects 338.4
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Contingency (approx. 25%) 249.9
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TOTAL Capital Cost Estimate 1,380.6
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Sustaining capital for the project over 29 years is $CDN 173.5 million. Of this $CDN 8.3 million is spent in Year 4 and $80.5 million is spent in Year 8 to add and replace equipment in the pit. The remainder is attributed to the capital requirements of the process and tailings facilities.

The operating cost summary is shown in the following table:



Operating Cost Estimate
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Area CDN $/tonne
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General & Administration (G&A) G&A Labor 0.14
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Direct 0.29
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G&A Total 0.43
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Mining Ore 1.40
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Processing Process Labour 0.59
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Consumables 5.59
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Power 1.37
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Miscellaneous 0.06
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Process Total 7.60
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TOTAL (CDN $/tonne milled) 9.43
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Financial Analysis

At a price of $7.50 US/lb of nickel, $11.00 US/lb of cobalt, and $1.40 US/lb of copper, an exchange rate of 0.95 US$/CDN$ and a discount rate of 10.0%, the resulting net present value (NPV) is $186.9 million Canadian. The project with these assumptions has a rate of return of 12.2%. Other cases based on various ranges of metal price are presented as follows:



Pre-tax Net Present Value - Various Cases
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Area Case 1 Case 2 Base Case 4 Case 5 Present
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Commodity Nickel 6.00 6.75 7.50 8.25 9.00 12.00
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(US$/lb) Cobalt 8.80 9.90 11.00 12.10 13.20 34.00
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Copper 1.12 1.26 1.40 1.54 1.68 3.15
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IRR % 4.8 5.0 12.2 15.3 18.3 31.8
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NPV (CDN $M) Cum. Net Cash Flow 889 1,859 2,828 3,797 4,767 9,905
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5.0% Discount -22 466 954 1,443 1,931 4,484
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8.0% Discount -279 72 422 773 1,123 2,945
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10.0% Discount -390 -102 187 476 764 2,258
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12.0% Discount -471 -229 13 255 497 1,745
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15.0% Discount -553 -362 -172 19 210 1,191
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Payback (yrs) 13.2 8.0 6.4 5.3 4.5 2.6
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Recommendations

AMEC indicated in the Study that the deposit is potentially mineable and that further work is justified. It was recommended that work in all major areas be undertaken to advance the project to the pre-feasibility level to better determine the economic viability of the project. This work includes drilling to better define the resources and upgrade these into reserves. More metallurgical work is necessary to ensure that saleable metal products can be produced. More environmental and geotechnical work is necessary to allow the project to move forward. The pre-feasibility study would examine variants to derive the appropriate path to the development of this deposit. Confirmation and availability of the required power from the North American grid is critical to this project.

Qualified Persons

The Qualified persons responsible for the preparation of the Study on the preliminary assessment are:

- Mr. Greg Kulla, P.Geo. Principal Geologist, AMEC Vancouver office

- Mr. Gerrit Vos, P.Eng. Principal Mining Engineer, AMEC Vancouver office

- Mr. Ignacy (Tony) Lipiec, P.Eng. Senior Process Engineer, AMEC Vancouver office

This Preliminary Assessment includes the use of inferred mineral resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. The study is preliminary in nature and there is no assurance the mining, metal production, or cash flow scenarios outlined in this report would ever be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

This press release uses the terms "measured" "indicated" and "inferred" resources. We advise U.S. investors that while those terms are recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize them. U.S. investors are cautioned not to assume that any part or all of mineral deposits in these categories would ever be converted to reserves.

This press release contains "forward looking statements". Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company's plans to materially differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Known risks include, but are not limited to, financing risks, commodity price risks, scheduling risks and engineering risks. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statements were made, and readers are advised to consider such forward-looking statements in light of the risks set forth in the company's continuous disclosure filings as found at www.sedar.com.

This news release has been reviewed and approved by Neil Froc, P. Eng, a Qualified Person consistent with NI 43-101.

MARK JARVIS, President

HARD CREEK NICKEL CORPORATION

The TSX Venture Exchange does not accept responsibility for the accuracy or adequacy of this news release.

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