JOHANNESBURG (miningweekly.com) – Base metals firm Independence Group (IGO) is accelerating the development of the Bollinger orebody at the Nova nickel/copper/cobalt project, announcing on Thursday that work has begun on a new decline.
Early access to the Bollinger orebody is expected to deliver enhanced early cash flow and additional project value, while staying within the original $443-million capital cost estimate.
IGO MD Peter Bradford described the benefits of the early development of Bollinger as “compelling”, noting increased mined tonnes and grade in the 2018 financial year would deliver an A$134-million improvement in that year’s free cash flow, relative to the December 2015 optimisation study.
The project’s net present value (NPV) would also increase by A$128-million, relative to the optimisation study.
“Since bringing the asset into the IGO portfolio, we have improved the project NPV by 50% compared with the definitive feasibility study on a like for like basis,” said Bradford.
“Additional opportunities remain to further increase the project NPV by improving the mining production rates and processing plant throughputs. This will be assessed once construction is complete and operations have ramped up.”
The $18-million of costs for the Bollinger decline comprise $6-million of additional capital costs and $12-million of future sustaining capital expenditure that has been brought forward and will be accounted for in the initial capital cost.
Life-of-mine sustaining capital has been reduced by $12-million to $130-million as a result of the development costs for Bollinger being absorbed into the initial capital costs.
Barminco, the existing underground mining contractor at the Nova project, is carrying out the additional development as an expanded scope of works. Barminco has mobilised an additional Jumbo, crew and equipment to the Nova project for this purpose.
The Bollinger decline development commenced in July, and to date 125 m of progress has been achieved.
The additional development started from a take-off point at the Nova 2030 mRL level and will extend to the Bollinger 1830 mRL level for a total of 1 400 m of development.
Bradford also reported that the Nova project was on schedule and on budget, with the overall project 93% complete and the processing plant 86% complete at the end of June.
“Progress to date has significantly de-risked the project and first concentrate production is anticipated December 2016.”