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C$2bn NPV for Baptiste nickel project

8th September 2023

By: Mariaan Webb

Creamer Media Senior Deputy Editor Online

     

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The newly released prefeasibility study (PFS) for the Baptiste project has established the nickel asset as a key strategic asset in the development of Canada’s critical minerals supply chain, says FPX president and CEO Martin Turenne.

The PFS demonstrates the Baptiste project’s potential as a high-margin, long-life, large-scale, and low-carbon mine with unparalleled flexibility to produce either a high-grade concentrate (60% nickel) for direct feed into the stainless steel industry or further refining into battery-grade nickel sulphate, cobalt precipitate, and copper concentrate products for the battery material supply chain.

The project has an after-tax net present value (NPV) of C$2.01-billion and an internal rate of return (IRR) of 18.6%.

“Despite the inflationary pressures observed in the mining industry in recent years, the study has yielded after-tax NPV and IRR superior to those observed in the 2020 preliminary economic assessment, reflecting greater engineering maturity and incorporating the several optimisations identified by our class-leading project team in regards to resource modelling, mine planning, process recovery and site design,” says Turenne.

The base case outlines an openpit mining project in central British Columbia which will produce an average of 59 100 t/y of nickel-in-concentrate over a 29-year mine life.  The project will be developed in a phased approach, with an initial mill throughput rate of 108 000 t/d (Phase 1), followed by an expansion to 162 000 t/d (Phase 2) funded from free cash flow after the initial after-tax payback period of 3.7 years.

The refinery option outlines an off-site refinery to upgrade a portion of nickel-in-concentrate to produce 40 000 t/y of battery-grade nickel sulphate for the electric vehicle battery supply chain, with the balance of concentrate continuing to be directly supplied to the stainless steel industry.  Along with battery-grade nickel sulphate, this option also supports the valorisation of cobalt and copper as refinery byproducts. 

The total initial capital cost for the project is estimated to be $2.18-billion, with expansion capital cost of C$763-million.

The refinery option presents incremental capital expenditure of C$448-million with an incremental operating cost of $1.02 per pound of nickel (C1 cost of $0.79/lb nickel, including credits for cobalt and copper byproducts), resulting in a total NPV of $2.13-billion.

Edited by Creamer Media Reporter

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