PERTH (miningweekly.com) – An independent value-add scoping study into the Jaguar nickel sulphide project, in Brazil, has delivered "exceptional" economic outcomes for ASX-listed Centaurus Minerals, prompting the company to proceed with a definitive feasibility study.
The value-add scoping study considered an openpit and underground mine supplying a 2.7-million-tonne-a-year nickel sulphate plant, over an initial mine life of 13 years.
The project is projected to produce more than 20 000 t/y of recovered nickel in sulphate and 9 600 t/y of a mixed sulphide precipate.
The scoping study estimated that the project would require a capital investment of some $288-million, and would have a life-of-mine (LoM) C1 cash cost of $3.29/lb, and an LoM cash operating margin of $4.27/lb, and all-in sustaining costs of $3.94/lb.
The study estimated that the project would have a post-tax net present value (NPV) of $831-million and an internal rate of return (IRR) of some 52%, generating revenues of some $4.53-billion over the mine life, and earnings before interest, taxes, depreciation and amortization of some $2.44-billion.
Centaurus MD Darren Gordon said the exceptional economic outcomes of the value-add scoping study demonstrated the compelling case to develop Jaguar as a sustainable long-life, high margin and low-carbon emission supplier of battery grade nickel sulphate to the growing electric vehicle market.
“The value-add scoping study shows that a strategic investment in downstream processing to produce a nickel sulphate product tailored for the clean energy market adds very significantly to the already strong economics seen in the base case study released in late March.
“By further processing our nickel concentrate to a sulphate product on site at Jaguar, the project net present value increases by over 80% to approximately A$1.1-billion with an internal rate of return of 52%, an outstanding result from a truly global-scale project.”
The base case scoping study found that the project could produce 275 600 t of nickel over a mine life of ten years, with the project’s capital costs estimated at $178-million, and its LoM C1 costs at $2.41/lb.
The base case scoping study estimated that revenues for the project would reach some $2.42-billion, while average annual operating free cash flows were expected to reach some $109-million, while the post-tax NPV was estimated at $453-million and the IRR at 54%.
“Since acquiring Jaguar in late 2019 we have set a goal to transform Centaurus into a low-cost, high-margin and emissions-friendly nickel mining company, capable of delivering more than 20 000 t/y of battery-grade nickel to global markets for many years to come,” said Gordon.
“The value-add scoping study clearly shows Jaguar has all the attributes required to achieve this goal, and to do so in a sustainable and responsible manner, ensuring we meet the highest possible environmental and social governance standards.
“Brazil, and specifically the Carajás region, has many attributes that make the downstream process highly attractive, including low-cost renewable energy from the national grid, extensive road, rail and port infrastructure servicing the Carajás Mineral Province and a strong local workforce from well-established mining communities.”
Gordon said that the scoping study is an important milestone for the company and an outstanding platform to launch directly into a definitive feasibility study for both the conventional nickel concentrate case and the downstream nickel sulphate case. However, he noted that the results from the value-add study are pointing strongly in the direction of downstream processing.
“We are also now close to submitting our updated mining and environmental licence applications with all field studies complete and the company having a clear path towards the development of one of the world’s biggest near-surface high-grade nickel sulphide deposits,” he added.
The definitive feasibility studies are targeted for completion in the fourth quarter of 2022.