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Perth-based base and precious metal development and exploration company, Cassini Resources Limited (ASX:CZI) has released half yearly report for the six-month period ended 31 December 2019. The principal activities of CZI during the period were targeted towards advancing the $36 million Earn-in/Joint Venture (EIJV) agreement with copper major OZ Minerals (ASX:OZL), for West Musgrave Project (WMP).
The Company owns a 30% stake in the flagship WMP, Australia’s largest undeveloped nickel/copper deposit.
The main prospects included in the West Musgrave Project are as follows, with the Nebo-Babel deposits on priority for development-
- Nebo-Babel Deposits- PFS completed
- Succoth Deposit – Under Advanced Exploration
- One Tree Hill & Yappsu Deposits – Under Exploration
Earn-in Agreement Terms and Milestones
Cassini Resources and OZ Minerals had agreed on the agreement including 3 stages in 2016, with OZ Minerals continuing to earn-in the project. Initial stage of the agreement was completed in November 2017, with the conclusion of a further scoping study (FSS) on the Nebo-Babel Deposit development.
The stage 2 involved the pre-feasibility study, upon completion of which OZ Minerals acquired a 51% stake in the project, with an initial contribution of $3 million followed by an investment of $19 million, including $15 million towards PFS of the Nebo-Babel deposits and $4 million for regional exploration.
Stage 3 of the earn-in was achieved in April 2019 on contribution of a total of $36 million towards the pre-feasibility study of the Nebo-Babel deposits and the regional exploration. The pre-feasibility study of the Nebo-Babel deposits was broadened to cover additional identified prospects and was completed in February 2020.
PFS Interim Update: August 2019
Cassini provided an update to the ongoing PFS in August 2019, announcing inclusion of other value-addition opportunities and assessing the project at a 10 million tonnes per year run of mine (ROM) capacity as the base case to further extend the mine life.
The Company also progressed on assessing the application of advanced technologies such as the Loesche Mill and additional flotation cell technologies to further reduce the capital requirements and optimise the operating costs at high metallurgical recovery.
The Nebo-Babel project stood out as one of the largest projects by recoverable volumes for both nickel and copper, therefore supporting the potential of the project to have low cash cost.
West Musgrave: Consolidating Nearby Projects
In December 2019, Traka Resources Limited, an adjacent tenement owner, agreed to transfer rights of exclusivity for its Musgrave Project tenements to the CZI-OZL JV. The agreement was signed with Cassini Resources’ wholly owned subsidiary Wirraway Metals & Mining Pty Ltd and included a $250,000 cash consideration and a 2% Net Smelter Royalty (NSR) in return for the exclusive rights to the 5 tenements (EL 69/3156 and 3157 plus ELA 69/2749, 3490 and 3569).
Capital Raising - Cassini Resources secured further capital in December 2019, exercising 12,250,000 unlisted options held by key management personnel and Board members, raising $820,750.
Yarawindah Brook and Mount Squires Gold Projects: Another Gem by Cassini
Cassini holds an option to earn an 80% stake in the Yarawindah Brook project, which is located almost 130 kilometres northeast of Perth in Western Australia. The Company commenced a ~1,000 metres diamond drilling program during last quarter of 2019, targeting multiple electromagnetic conductors identified during the electromagnetic surveys in 2018.
CZI wholly owns the Mount Squires Gold Project, where further analysis of RC drilling results is ongoing. The Company plans for an exploration program at the project during 2020.
Major Activities Subsequent to the Period
Yarawindah Brook Project - The results to the maiden drilling program was published in January 2020, with Ni and Cu-bearing sulphide intersections hosted by mafic rocks. The results confirmed the presence of multiple intrusions within the project area. A new discovery by the name of Brassica prospect returned wide mineralisation intersections with grade as high as 0.5% Ni and 1.46% Cu.
Drilling at the Yarawindah prospect has been recommenced with third hole underway at the Brassica prospect.
West Musgrave PFS Supports Claim of Large-Scale, Low-Cost, Long-Life Operations
On 12 February 2020, Cassini Resources announced the results to the PFS for the West Musgrave Project.
Here is a snapshot of the PFS results-
- Life of operation increased to more than 26 years
- Processing capacity of 10 Mtpa
- Ore reserve of 220mt with a grade of 0.36% Cu and 0.33% Ni
- Average annual production of ~28,000tpa Copper and ~22,000tpa Nickel
- Low cash cost operation of ~US$(0.90)/lb Cu and ~US$1.30/lb Ni
- NPV of ~$800 million and IRR of ~20%
- Renewable power, open pit mining set up
The maiden mineral reserves for the Nebo-Babel deposits of the West Musgrave project was estimated at 220 million tonnes of ore with a grade of 0.33% Nickel, 0.36% Copper, 120 ppm Cobalt and several other precious metals. The reclassification of the resources to reserves included the application of a Net Smelter Return (NSR) cut-off of $28 per tonne of ore.
The Company plans to now work on a Bankable Feasibility Study prior to the Final Investment Decision (FID). Cassini Resources is currently in negotiations with the potential investors to secure investment for the project.
CZI closed at $0.071 a share on 12 March 2020, with a market capitalisation of $33.37 million.
