PERTH (miningweekly.com) – A preliminary feasibility study (PFS) into ASX-listed Lunnon Metals’ Baker project, in Western Australia, has estimated that the project could produce 4 100 t/y of nickel over a 35-month mine life.
The PFS estimates that the project will require a capital investment of A$18.6-million, with C1 cash costs estimated at A$279/t and all-in sustaining costs at A$340/t, while the project will generate revenues of A$437-million.
The project’s pre-tax net present value has been estimated at A$164-million, and its internal rate of return at 324%, with a pay-back period of less than a year, and earnings before interest, taxes, depreciation and amortisation of A$231-million.
Lunnon on Monday also announced an initial probable ore reserve of 612 000 t for the Baker project, at 2.86% nickel for 17 500 t of contained nickel.
“Kambalda has been one of Australia’s most prolific nickel production centres for over 55 years. Despite this long history, the district is still a globally relevant nickel belt and remains an important strategic source of high-grade, premium quality nickel sulphides,” said Lunnon MD Ed Ainscough.
“Baker continues this proud Kambalda tradition and the company is, likewise, proud to report the results for that deposit’s PFS and initial ore reserve. These impressive results come within two years of listing on the ASX and at a time when Kambalda is once again in the headlines, this time as a sought-after key production centre driven by its many positive attributes including its high-grade, superior concentrate quality and consequent low energy and capital intensity to exploit,” he added.
“To have access to such high-quality tenure in the heart of Kambalda is truly amazing and sets the company and its shareholders up for a bright future.”