Cassini Resources and Flagship West Musgrave Project: Driving Down the Battery Road

Cassini Resources and Flagship West Musgrave Project: Driving Down the Battery Road

The world of mobility is undergoing a major transformation, and market leaders such as Tesla are leading the way to a cleaner and reliable medium of transport for the future.

“We will not stop until every car on the road is electric” – Elon Musk

Such statements are not only made by CEOs of EV manufacturers such as Tesla but also by flagship muscle car makers and poster boys of Internal Combustion Engine (ICE) of the likes of Ford, which proved its allegiance to the electric future by launching the Ford Mustang Mach-E, the electric version of the iconic Mustang, promising the same exhilaration as its ICE counterparts.

The EV production would require increased and stable battery minerals in future. Also, the trending decentralised virtual power plant concept would further inflate the demand for energy storage and its key ingredients.

Right Projects, Right Timing

Cassini Resources Limited (ASX:CZI) is a base and precious metals developer and explorer, focusing on Australia's largest undeveloped nickel-copper project, West Musgrave Project (WMP) as its flagship project. CZI acquired the West Musgrave Project in April 2014, consisting of three existing nickel and copper sulphide deposits, in addition to other future prospects. Later in 2016, Cassini entered into a 3-stage earn-in agreement with OZ Minerals Ltd.

2020 An Exciting Year for Cassini Resources: Must Read

CZI also continues progress on the Western Australia-based Mount Squires Gold Project and the newly acquired Yarawindah Brook Project.

West Musgrave Project (CZI 30%)

  • Pre-Feasibility Study nears completion, market release expected Q1 2020
  • Further exploration opportunities at Succoth and One Tree Hill
  • Expansion of Joint Venture regional tenement holdings

West Musgrave is Australia's largest undeveloped Ni-Cu project, with Cassini holding 30% of the stake and JV partner OZ Minerals owning the remaining 70%. Initially, the project area was explored by BHP Billiton, resulting in the discoveries of the Nebo-Babel (Ni, Cu) deposits in 2000, followed by the Succoth copper (Cu) deposit in 2013.

Ownership Structure of the Project

Cassini-OZ Minerals signed a 3-stage farm-in/JV agreement in 2016 involving a minimum funding of $36 million into exploration and development expenditure. The stage 1 of the agreement was achieved in November 2017 with the completion of a Further Scoping Study (FSS) on the development of the Nebo-Babel Deposits. Stage 2 involved the Pre-Feasibility Study (PFS), while the 70% earn-in milestone was completed in April 2019.

Earn-In Agreement Terms (Source: Cassini Resources)

The Pre-feasibility study of Nebo Babel was extended in last September to include additional identified opportunities and is scheduled to be completed within Q1 2020. The prospects included in the West Musgrave are as follows, with the Nebo Babel on priority for development-

  • Nebo-Babel Deposits- Under PFS
  • Succoth Deposit – Under Advanced Exploration
  • One Tree Hill & Yappsu Deposits – Under Exploration

The PFS update in September 2019 reported a JORC code compliant mineral resources of 238 million tonnes of nickel, copper and cobalt rich ores at a cut-off grade of 0.25% nickel.

Source: Cassini Resources

With the recovery in nickel prices since late-2018 and the inventory stocks circling the 6-year lows, Nebo Babel presents an opportunity to position Cassini in the market at the right time and in the right commodities.

Nebo Babel is one of the largest nickel sulphide development projects in Australia with a scale comparable to tier 1 assets of global majors such as BHP Billiton and Norilsk Nickel.

Project Description: PFS Insights

The current life of mine extends beyond 15 years with the possibility of further extension and exploration and development of future prospects. The planned operations are scheduled for a 10 million tonnes throughput capacity, enjoying economies of scale. The beneficiation route would include SAG Mill, Ball Mill and bulk flotation flowsheet to lower down the operating expenses.

LOM Cash Costs

The project lies in the second quartile of the C1 cash cost graph for the Australian nickel producers, significantly lower than its peers.

The significant by-product credit of copper and cobalt would help maintain control on the OPEX. The LOM operating expenses reduction is also credited to the Solar-Wind-Diesel power plant. The expenditure would further be optimised using the appropriate methods (Loesche mill under consideration).

Succoth and One Tree Hill

The exploration program at the Succoth and One Tree Hill deposits consisted of RC drilling, with results from the deposits and RC drilling identifying mineralisation zones.

One Tree Hill Prospect

A total of 1,002 metres of RC drilling has been completed, returning several mineralised zones including 9m at 2.56% Cu, 0.37% Ni, 0.06% Co and 1.32g/t PGE from 344 metres within a broader disseminated zone of 40m at 1.16% Cu from 343 metres.

Succoth Deposit

The geological understanding of the region has advanced with the completion of an infill drilling program in the central part of the deposit. The recent drilling results indicate the folded geometry model at Succoth, which affects the mineral resources model, the potential mining strip ratio and the economics of the mining operation.

Cassini and OZ Minerals are continuing to identify and estimate the resources potential of Succoth. An optional study is under consideration, as part of the feasibility study of Nebo-Babel.

The exploration results and economic studies so far indicate the possibility of a world-class low-cost nickel sulphate operations. Further feasibility and economic study would decide the structure of the project and its capabilities to fulfil the increasing battery cathode materials demand.

On 30 January 2020, the stock of CZI closed the day’s trading at $ 0.092 with a market cap of $ 40.21 million.

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