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Cassini Resources Limited (ASX:CZI), a Perth-based precious and base metals developer and explorer, is advancing on Australia’s largest undeveloped Nickel-Copper project, also its flagship property - West Musgrave Project (WMP).
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The Company owns and operates the project under a 30:70 joint venture with OZ Minerals Limited (ASX:OZL), which on the contribution of $26 million towards the pre-feasibility study of the Nebo-Babel deposits (one of the main prospects) and regional exploration acquired the 70% stake in the project.
The Pre-Feasibility study results for WMP were announced in February 2020, highlighting -
- Life of operation or mine of more than 26 years
- Processing capacity of 10 Mtpa
- Ore Reserve of 220mt with a grade of 0.36% Copper and 0.33% Nickel
- Average annual production of ~28,000 tonnes of Copper and ~22,000 tonnes of Nickel in concentrates
- Low-cash cost operation of ~US$(0.90)/lb Copper and ~US$1.30/lb Nickel
- NPV of ~$800 million and post-tax IRR of ~20%
- Renewable power, open-pit mining set up
The PFS results confirm the large-scale (~10 Mtpa Plant Capacity), long life, and low cash operating cost of the modern mining project at the Nebo-Babel deposits.
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The mineral ore reserve supports an initial 22-year life with immense possibilities from the Nebo-Babel and other deposits to further extend the economic life of the operations. The open-pit mining methods and conventional beneficiation method reduces the technical risk involved with the project and emboldens confidence in the project.
Modern Mine with Excellent Infrastructure
The West Musgrave greenfield project enables the partners to develop the mine with advanced infrastructure facilities and techniques. The mining project includes the development of access roads to link the project site to the nearby community of Jameson. The project expects to utilize off-grid renewable power for the majority of the West Musgrave requirement.
An airport with a handling capacity of Airbus A320 or equivalent is recommended for the mine development. Existing infrastructure would be operational during the mine life but would require additional infrastructure development in the region to support the mining activities.
Open Pit Mining Operations - Lower Mining Costs
The PFS recommends open pit mining operations with a processing capacity of 10 million tonnes of ore per year. The mining method minimises the technical risks and sweetens the economics of the mining project with low mining costs.
The multiple payable commodities of the WMP would lead to significant by-product credits for the project. This would further reduce the net operating expenses for the project with respect to the primary commodity. The average life of mine strip ratio for Nebo-Babel deposits stands at approximately 3.3.
During the initial period, the mining operations will operate at 31 million tonnes of pre-stripping and stockpiling, which would ramp up to 34 million tonnes per annum for the first 5 years.
The average life of mine mining costs is estimated at approximately $12.70 per tonne of ore mined. The mine production schedule expects development of multiple deposits to be developed in sequences.
Advanced Processing Ensures High-Value Separate Nickel & Copper Concentrate
The WMP processing facility will be designed to handle 10 Mtpa of Nickel-Copper Sulphide ore.
The ore from the mine would undergo crushing, grinding, sorting steps followed by multi-stage flotation to produce separate nickel and copper concentrate products, which are further thickened and filtered.
The process plant is anticipated to produce 22,000 tonnes of Nickel with a recovery of 69% and 28,000 tonnes of Copper with a recovery of 78%, annually. Usage of advanced processing method ensures separate concentrate products with lesser refining costs involved in the downstream value chain. The concentrate product is smelter friendly attributed to the high Fe:Mgo ratio. Further improvement in the metallurgical recovery and concentrate grades is expected. The life of mine (LoM) average processing costs stand at ~$13.90 per tonne of ore.
Innovative, Advanced & Greener Implementation to drive WMP down the Profitability Road
The low mining costs and advanced processing solution drives the project towards a higher margin for Cassini Resources. Presence of multiple payable commodities further decreases the cash cost for the operation of the project to-
- Average LOM C1 cost (net of by-product credits) stands at ~US$1.30 per pound payable Nickel in the concentrate product
- Average LOM C1 cost (net of by-product credits) of around -US$0.90 per pound payable Copper in the concentrate product
The cash cost for both the commodities (Nickel & Copper) lies in the lowest quartile of the cash cost curve. This low-cash cost further provides stability against the cyclical commodity prices and the decline in the mine grade over the mine life.
Want to Read More on the West Musgrave Project Economics: Read Here
Excellent Project Economics with Greener Touch
The consciousness for greener mining operations is rising in Australia. The West Musgrave Project might utilise renewable energy for 70-80% of its power requirements. The innovative and advanced off-grid renewable power and processing solutions have increased the stakeholders’ awareness and involvement in the project. Usage of advance and innovative solutions such as these supports the potential value generation for the Company and region in future.
