PERTH (miningweekly.com) – The A$229-million Odysseus nickel project, in Western Australia, is on track for first nickel concentrate production in 2022, said nickel miner Western Areas on Tuesday.

Speaking at the Paydirt Nickel conference, in Perth, Western Areas MD and CEO Dan Lougher noted that A$80-million will be spent on the project development at Odysseus during 2020, followed by a A$66-million investment in 2021, and a A$143-million investment over 2022 and 2023.

“Importantly, Odysseus’ capital outlay for the coming years is expected to be generally funded from the company’s operating cashflows and cash reserves, but the project retains significant funding optionality into the future,” Lougher said.

Odysseus is expected to produce 900 000 t/y of nickel in concentrate over a minimum ten-year mine life, based on the current reserves of 165 000 t of nickel.

“Odysseus is not just a long life, low cost minimum ten-year mine but boasts an all-in sustaining cost of just A$3.50/lb,” Lougher said.

“There is further significant upside from the AM5 and AM6 deposits close to the three Odysseus ore bodies and which contain in their own right, an indicated mineral resource of 57 600 t of nickel that was not included in the definitive feasibility study used to give the project the go-ahead.

“We are currently seeking to finalise a reserve estimation for AM5 and AM6.”

Completion of the underground rehabilitation programme down to the AM5/6 ore bodies will allow the new decline development towards the Odysseus deposit.

Lougher also revealed that the current firmer market conditions were bringing additional potential customers to the table for the company’s overall output with two major offtake agreements due to expire in January next year.

Western Areas’ existing output is taken up equally by offtake agreements with major BHP and China’s largest stainless steel producer Tsingshan, which accounts for around 25% of China’s nickel demand.

“We are currently in the market with tenders and are receiving a strong response,” Lougher said.

“This significant increase in inbound offtake enquiries for nickel sulphide concentrate post the current contract period, can be primarily linked to the Electric Vehicle battery pre-cursor sector where there is now a rush on to lock down long-term supply and pricing.”