PERTH (miningweekly.com) – A prefeasibility study (PFS) into the Syerston nickel and cobalt project, in New South Wales, has estimated a capital cost of $680-million to deliver average production of 18 730 t/y of contained nickel metal equivalent and 3 222 t/y of contained cobalt metal equivalent.
Owner Clean TeQ Holdings, previously known as Hot Copper, said on Wednesday that the PFS was based on a 2.5-million-tonne-a-year operation, and would have a mine life of an initial 20 years.
The PFS estimated a net present value of $891-million and a post tax internal rate of return of 25%, assuming a long-term average nickel and cobalt price of $7.50/lb and $12/lb respectively.
Clean TeQ pointed out that the nickel and cobalt resource assessed for the PFS also hosted significant quantities of scandium. However, given that the scandium market was still in development, the PFS base case assumed no scandium revenues.
Average C1 operating costs have been estimated at $2.96/lb nickel, $0.89/lb nickel after cobalt by-product credits or negative $0.76/lb nickel after cobalt and scandium by-product credits.
“The PFS has demonstrated the potential for an extremely robust project, producing metals at a scale, and in a form, that is becoming increasingly critical in energy and transport supply chains,” said Clean TeQ CEO Sam Riggall.
“Market interest in the project has been very strong, and we look forward to progressively de-risking the development plan and working with potential customers and strategic partners in these supply chains.”
The plant and infrastructure construction would take some three years, with the commissioning and ramp-up period estimated at 24 months, with production capacity expected to be achieved in the third year of operations.
While a bankable feasibility study (BFS) is being completed over the next 12 months, Clean TeQ will be undertaking a range of activities to secure financing for the development of the project.
The BFS will likely be completed in the fourth quarter of 2017, and will include a pilot campaign to produce samples of high-purity nickel and cobalt sulphate for customer testing and validation purposes.
A number of potential offtake customers have also made unsolicited inquiries about providing funding for the development of the project, Riggall said.