www.metallicaminerals.com.au
Metallica Minerals are a multi commodity resource company with major interests in
Nickel-Cobalt
Coal – Energy
Bauxite
Tungsten
Copper-Gold
Since its establishment in 1997 and ASX listing in November 2004, Metallica Minerals (ASX code: ‘MLM’) has maintained a core focus on the sustained development of its flagship NORNICO nickel-cobalt project in northern Queensland, while expanding its business through a complementary series of strategic resource project acquisitions, non-core asset sales, corporate alliances, and cutting-edge technological advances.
Metallica Minerals reports scoping study signals "robust" NORNICO project economics
Metallica Minerals (ASX:MLM) has received a boost today with after a Scoping Study on the first stage of proposed mining and processing of the NORNICO nickel-cobalt & scandium project returned robust project economics and indicated technical viability.
The returns from the project economics can be boosted further with inclusion of potential to process high grade (>200g/t Sc) scandium ores in the feed discovered by Metallica earlier this year at the Lucknow deposit at the southern end of NORNICO. Scandium is a valuable rare earth element used in aluminium alloys, fuel cells and lighting.
These will be included in an enhanced scoping study by year end. NORNICO is located northwest of Townsville in North Queensland.
The two scoping studies will position Metallica towards a decision to commence a full feasibility study early next year, with a view to achieving first Ni-Co-Sc production from the Greenvale and nearby Lucknow deposits, starting 2013.
Highlights of the study included:
- A mineable resource base of > 2.5Mt @ >1.5% NiEq and >50g/t Sc, and from this, 1.8 Mt at 1.8% NiEq, 50 g/t Sc of processed ore at a rate of 180,000 tpa
- Processing and Mine life (initial) for 10 years starting in 2013
- Producing around 2,700 tpa Ni in nickel sulphate (12,100tpa), 160 tpa Co in cobalt sulphide and 11,600 kg per annum of Sc oxide (99.9% purity).
- Using base case assumptions, the scoping study estimated total Stage 1 capital cost of A$132 million (including EPCM 10% and 15% contingency) and the average total operating cost was $250/t ore. The study used long-term metal price assumptions of US$9/lb Ni, US$18/lb Co and US$1,750/kg Sc oxide and A$ exchange rate of US$0.85.
- Operating costs of $250/t ore
- Net cash flow of $45m
- Payback period of 4 years
- Project NPV of A$75M and project IRR of 23%, using a 10% discount rate & project life of 10 years.
- Total operating costs estimated to be in the order of US$6.20/lb Ni or US$5.10/lb Ni with Co credits or
The revised Scoping Study (Mark II) will also allow for further resource drilling to further enhance and define the Greenvale Ni-Co resource base in preparation for mining studies before the expected commencement of a full feasibility study in early 2011.
Metallica managing director, Andrew Gillies said,"the tri-metal (Ni-Co-Sc) processing opportunity that NORNICO presents is unique in Australia’s minerals sector, and is further enhanced by Metallica’s access to high grade Ni-Co-Sc ores, an excellent processing site and infrastructural setting."
"We are well advanced in developing an innovative and highly efficient flow sheet for simultaneous metal recovery of Ni-Co and Sc, thereby effectively reducing unit operating and capital costs."
"Metallica also has the potential for boosting revenues by incorporating very high Sc ore in to the feed, as we expect the global scandium market to grow substantially”.
“Our discovery earlier this year at NORNICO of the Lucknow Scandium deposit, containing an Indicated and Inferred resource of 4.1 Mt at 205 g/t Sc (80% MLM/20% SRL) close to Greenvale, significantly underpinned NORNICO’s development options. The Lucknow mineralisation has emerged as larger and higher grade than our existing Kokomo scandium resource to its north, and it is not unreasonable to expect that the NORNICO Stage plant could ultimately, within the decade, convert from a Ni-Co-Sc ore facility to a predominantly Sc ore operation and a major long term world supplier of scandium oxide.”
“We envisage that NORNICO Stage 2 will be a much larger Ni-Co +/- Sc operation, hosting its own acid and power plant. It would be established at the northern end of the NORNICO project, at the Bell Creek Ni-Co project near Mt Garnet, with supplementary ore feed trucked from the Minnamoolka and Kokomo deposits”.
“Metallica’s mining and processing intent is to start modestly, then scale-up later with a much larger Stage operation while increasing Stage 1 scandium production. The latter is subject to the expected growth in the scandium market and NORNICO’s performance in delivering secure, long-term scandium supply.”
“Our NORNICO processing operations will be technologically advanced and non conventional and cannot be compared to most previous nickel laterite projects. Large scale, huge capital cost nickel laterite operations in remote or difficult locations are not the way to go – the Metallica pathway is focused on margins and maximising returns from the flexibility of three simultaneous revenue streams from nickel, cobalt and scandium depending on variations of the metal prices and markets at a given time."
Gillies said MLM plans to be "a significant supplier of nickel and cobalt, and to emerge as the major world supplier of scandium.”
Additional RC drilling to further define high grade Ni–Co mineralisation in areas which have not been included in the current resource model is planned for Greenvale.
Drilling of 3 PQ core holes at Greenvale and 3 PQ holes at Lucknow are also planned to provide material for further Metallurgical test work and provide detailed Bulk Density (BD) data.
