Yesterday Metals Finance announced the potential of the Barnes Hill nickel mine had improved.

It told the Australian Securities Exchange that the $98 million mine, a joint venture with Proto Resources and Investments, could generate up to $1.1 billion in revenue per annum over an estimated 26-year life.

The improved forecasts were based on a draft feasibility study which found throughput could be doubled to 500,000 tonnes of nickel a year.

Proto managing director Andrew Mortimer said it was very good news for the project.

``The project can pay itself back in three years which makes it very robust,'' Mr Mortimer said.

While the main target would be nickel, iron deposits were also being assessed.

According to Proto the iron was first discovered in 1804 by Lieutenant-Colonel William Patterson.

``It was actually discovered less than 20 years after the First Fleet (arrived) and samples from Barnes Hill were sent back to Sir Joseph Banks who supplied and paid for the drilling equipment,'' Mr Mortimer said.

The mine was waiting on approval and construction was hoped to begin late 2012.

Mr Mortimer said that several hundred jobs could be generated and potentially filled by workers at the soon to be closed Beaconsfield Gold Mine.

The mine is due to shut in June, but plans to process gold tailings could see it open until December.

Mine owner BCD Resources is seeking approval to remove 150,000 tonnes of tailings from its Lefroy site.

If approved the material would be transported via truck to the processing plant at Beaconsfield.

``Beyond that a long-term re-utilisation of the Beaconsfield bacox plant is being sought,'' BCD chief executive Peter Thompson said.

He was not prepared to say how many workers the tailings project would require at this stage.

The company's latest report shows production rose 19 per cent to 12,346 ounces of gold in the last quarter.