Name of the Project
Kun-Manie nickel/copper sulphide project.

Location
Amur Oblast, of the Russian Federation.

Project Owner/s
Amur Minerals Corporation (AMC).

Project Description
The Kun-Manie project has a total Joint Ore Reserve Committee- (Jorc-) compliant mineral resource estimated at 155.1-million tonnes having a nickel equivalent grade of 1.02%, equating to 1.58-million equivalent tonnes of nickel.

A prefeasibility study has proposed two operational scenarios for the project and both include:

• the construction and operation of all facilities required to mine and process six-million tonnes of ore a year;

• a 338-km-long access road linking the mine site to the Baikal Amur rail line, allowing for resupply and concentrate delivery from the mine site;

• the supporting rail station;

• the shipment of saleable product to the Port of Vladivostok; and

• incumbent offtake agreement considerations.

The study has established that the project is technically and economically viable for both production scenarios.

The base case scenario, or toll smelt option, represents the quickest and lowest initial capital-cost investment pathway to revenue generation and comprises the sale of concentrate (freight-on-board Port of Vladivostok) to a buyer based on typical nickel industry offtake net smelter return schedules.

Payable nickel for the toll smelt option is projected to be 24 306 t/y.

The second scenario uses the same opera­tional considerations used in the toll smelt option; however, it includes the addition of an AMC-constructed and -operated electric furnace/flash smelter located at AMC’s BAM rail station.

This owner-operated facility is planned to treat the sulphide concentrate generating a low-grade matte, which will be shipped to the Port of Vladivostok. This furnace/flash smelter option includes the consideration of typical intermediate nickel product offtake terms.

The furnace/flash smelter option has a similar lead time to revenue generation, although its initial capital expenditure is higher than that of the toll smelt option.

The low-grade matte product is expected to produce substantially increased revenues derived from credits related to the recovery of by-product metals not available to the toll smelt option. Payable nickel, and credits for copper, cobalt, platinum and palladium for the furnace/flash smelter option will average 29 155 nickel equivalent tonnes.

Production is planned to be mined from four openpit operations and one underground operation. Subsequent to a three-year construction period, production of six-million tonnes a year is planned, covering a 15-year production life.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The toll smelt option has a net present value (NPV), at a 10% discount rate, of $614.5-million and an internal rate of return (IRR) of 29.3%. The furnace/flash smelter option has an NPV, at a 10% discount rate, of $987.4-million and an IRR of 34.7%.

Both options have a payback of three years.

Capital Expenditure
Initial capital expenditure for the toll smelt option is estimated at $570.4-million, and for the furnace/flash smelter option $695-million.

Planned Start/End Date
Not stated.

Latest Developments
Amur Minerals has outlined its strategy to fund the bankable feasibility study (BFS) for its Kun-Manie project.

The company will undertake a “tried and proven” funding strategy, board adviser Adam Habib has said in a statement, explaining that it plans to put in place a binding offtake agreement and, with the support of the offtaker, raise sufficient funding to complete the BFS.

It is envisaged that the funding will be principally through debt, with a further component funded through equity and/or a supporting investment from an offtake partner.

Amur will also seek to invest in revenue-generating assets through corporate activity to strengthen its balance sheet and financial position.

The purpose of a BFS is to provide the technical, environmental and economic detail of the project to give institutional investors' confidence to proceed with the project financing necessary to advance Kun-Manie through construction and into production.

Amur earlier this month received nonbinding indicative offtake terms for the nickel and copper concentrates at Kun-Manie. This is a requirement for establishing that a marketable product can be generated.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
AMC, tel +7 4212 755615.