PERTH (miningweekly.com) – A definitive feasibility study (DFS) into nickel developer Sirius Resources' Nova project, in Western Australia, has confirmed that the project’s low cash cost would allow it to fall in the lowest quartile of nickel producers globally.

Sirius reported on Monday that the Nova project was expected to generate net cash flow of A$2.74-billion from a nickel revenue of some A$4.53-billion, over the project’s ten-year mine life.

C1 cash operating costs after by-product credits were forecast to be A$1.66/lb nickel in concentrate, which was better than the 2013 scoping study estimates.

The DFS slightly increased the expected capital expenditure for the project to A$473-million, up from the A$471-million estimated in the scoping study, with the capital cost now including extra risk mitigating measures.

The DFS was based on a processing rate of 1.5-million tonnes a year, to deliver about 26 000 t/y of nickel, 11 500 t/y of copper and 850 t/y of cobalt over a ten-year mine life.

The study was based on a maiden probable ore reserve of 13.1-million tonnes, grading 2.1% nickel, 0.9% copper and 0.07% cobalt, for 273 000 t of nickel, 112 000 t of copper and 9 000 t of cobalt.

“This is an exceptional result that is largely in line and in several respects better than the scoping study, and has now been considerably de-risked” said Sirius MD Mark Bennett.

He noted that metrics such as the high resource-reserve conversion rate, the low forecast cash cost and an all-in sustaining cash cost of A$2.32/lb, as well as the large projected net cash flow all supported the low risk and the “world-class nature” of the project.

“To be able to deliver such an outstanding DFS result on time and in less than two years since drilling the discovery hole is a testament to the outstanding quality of the Nova asset and our people,” said Bennett.

He added that the company was now able to develop the project at a time when the nickel market was forecast to be stronger for longer, vindicating the company’s counter-cyclical exploration approach, its ownership consolidation strategy and its long-term view of the nickel market.

Financing and offtake discussions were progressing and it was expected that these would be finalised before the receipt of all necessary statutory approvals.

Eight potential financiers have been shortlisted and a decision on the project financing would synchronise with the permitting timeline.

Bennett said that while the company’s immediate focus would be on permitting and development of the Nova project, Sirius would also continue with its aggressive exploration programme around Nova, as well as elsewhere in the Fraser Range and Polar Bear projects.