Name and Location
Dumont nickel project, Quebec, Canada.
Client
Royal Nickel Corporation (RNC).
Project Description
The Dumont project has proven and probable reserves of 1.18-million tonnes grading 0.27% nickel, 107 parts per million of cobalt, 0.019 g/t palladium and 0.009 g/t platinum.
A bankable feasibility study (BFS) has demonstrated a technically and economically sound project, with an after-tax net present value of $1.1-billion.
Nickel production at the project is expected to be among the top five nickel sulphide operations worldwide (by nickel production), with initial nickel production expected at 73-million pounds a year, increasing in the fifth year to an a average of 113-million pounds a year for the remainder of the 20-year mine life.
The BFS envisages a conventional openpit mine/mill operation using conventional drilling, blasting and loading, with a combination of hydraulic and electric rope shovels and truck haulage.
The mine is designed to produce ore at about twice the capacity of the mill, which will mitigate the risk of feed shortages and allow for the highest-value material to be prioritised and processed accordingly. As a result, an ore stockpile will be generated to continue to feed the mill for an additional 13 years at the end of the mine life, with the tailings deposited in the openpit.
The process plant will be constructed in two phases. Phase 1 will have an initial average throughput of 52 500 t/d using a single semiautogenous mill and two ball mills for grinding and cyclones for desliming, as well as conventional flotation and magnetic separation to produce a nickel concentrate also containing cobalt and platinum-group elements.
Net Present Value/Internal Rate of Return
Not stated.
Value
The project is estimated at $1.19-billion.
Duration
Not stated.
Latest Developments
RNC continues to make steady progress on the development of its Dumont nickel project, having reached several critical milestones over the past several months.
On August 4, the company announced that it had signed a memorandum of understanding with the Duro Felguera (DF) and Ausenco Canada alliance, under which DF-Ausenco would perform the work required to complete an engineering, procurement and construction (EPC) lump sum turnkey proposal for the Dumont project.
RNC agreed to award to the DF-Ausenco alliance the EPC and services agreement on condition that certain technical and commercial parameters were met, including delivering a turnkey proposal no later than December 15 this year. The EPC proposal must not exceed C$911-million for the defined scope of work and would contain a project performance guarantee associated with the cost and schedule for completion.
DF-Ausenco will also be required to make reasonable commercial efforts to reduce this not-to-exceed value, if possible.
RNC announced in July that it had received a positive environmental assessment decision for the Dumont project from the federal Environment Minister. The Minister determined that the project was not likely to cause significant adverse environmental effects when certain mitigation measures were implemented, as outlined in the comprehensive study report and referred the project back to the responsible authorities – Fisheries and Oceans Canada and Natural Resources Canada – to issue permits.
The Dumond project received the main environmental permit in June, the certificate of authorisation from the Quebec Ministry of Sustainable Development, Environment and the Fight Against Climate Change. This certificate is the most significant permit for mining projects in Quebec and has positioned Dumont to proceed to construction after it has secured financing.
Meanwhile, on June 29, RNC announced a royalty and private placement transaction with Orion Mine Finance, which closed on July 8. RNC received gross proceeds of C$12.6-million from Orion in exchange for a 0.75% net smelter return royalty in the Dumont project and ten-million RNC common shares, issued at $0.395 a share. RNC had the right to repurchase 50% of the royalty (0.375%) for $15-million in cash on the third, fourth or fifth anniversaries of the closing.
RNC president and CEO Mark Selby has explained that the financing willallow the company to advance its efforts on several fronts, including generating bulk samples of roasted concentrate to confirm concentrate roasting as a lower-cost processing alternative for the Dumont project.
Earlier in June, RNC appointed Swedbank Norway adviser for a senior bond financing of about $600-million, with a five-year maturity, to develop its Dumont nickel project.
“We continue to work towards completing the capital raising phase of the project in a timely manner to allow us to begin construction activities by early 2016, subject to nickel market conditions. Dumont is well positioned as one of the very few shovel-ready nickel projects in a tightening market,” Selby added.
Key Contracts and Suppliers
None stated.
On Budget and on Time?
Not stated.
Contact Details for Project Information
Royal Nickel Corporation, Rob Buchanan, tel + 1 416 363 0649 or email rbuchanan@royalnickel.com.