PERTH (miningweekly.com) – A prefeasibility study (PFS) into the Wingellina nickel/cobalt project, in Western Australia, has confirmed that it could produce sustainable green nickel and cobalt over a minimum of 42 years.
ASX-listed Nico Resources on Thursday told shareholders that the project could be one of Australia’s largest nickel/cobalt mines, producing some 40 000 t/y of contained nickel and 3 000 t/y of contained cobalt, based on the current ore reserves.
The PFS estimated a total capital cost of A$2.9-billion, with the project estimated to have a pay-back period of 4.9 years on the base-case scenario generating annual revenues of A$1.47-billion and annual earnings before interest, tax, depreciation and amortisation of A$0.7-billion.
The PFS estimated a post-tax net present value of A$3.34-billion and an internal rate of return of 18.02%.
Some 95.3% of the project’s power will be generated from renewable energy, with an energy proposal having been received from independent power producer Zenith Energy. The company said on Thursday that the inclusion of renewable power as the primary energy source coupled with the already planned co-generated steam power system presents Nico with a unique opportunity to design and deliver a project of the highest environmental credentials whilst also delivering the most economically effective design.
This development strategy will reduce Nico’s long-term exposure to energy markets whilst also reducing additional logistics costs over the life of the operation resulting in a more robust development option. It also supports the company's vision and strategy to be a net-zero producer well before the year 2050.
“We are delighted to release such a robust PFS which confirms Wingellina as a globally significant nickel and cobalt asset, generating A$60-billion to A$80-billion in revenues over the current 42-year reserve,” said Nico MD Rod Corps.
“The study outlines a robust top-tier, low-cost, long-life operation producingc.40,000 tonnes of nickel and 3 000 t/y of cobalt for over 40 years based on the current reserve only. The project can deliver excellent cash flows, with an exceptional three to four-year payback period and a post-tax net present value of A$3-billion to A$6-billion. We are also very pleased to incorporate the use of renewable power sourced from wind and solar within the PFS as we move along our pathway to net zero emissions.
“Wingellina remains Australia’s largest undeveloped nickel-cobalt Reserve of 168.4-million tonnes at 0.93% nickel, 0.07% cobalt and a global resource of 182.6-million tonnes grading 0.92% nickel, 0.07% cobalt which provides for an incredible resource to reserve conversion of 92% confirming the quality of the resource.”
The PFS contemplates the mining and processing of approximately 4-million tonnes of ore per year through a high pressure acid leach processing plant to produce approximately 100 000 t/y of mixed hydroxide precipitate.
The project is expected to create some 1 250 construction jobs, with 300 jobs created during the steady state operations.
Based on the positive results of the PFS, Nico will now undertake a definitive feasibility study on the project in 2023.
The Wingellina project is part of Nico’s larger, 100% owned Central Musgrave project, which spans across Western Australia and South Australia.