Mindoro Resources Limited has announced the release of the Agata Nickel Project Preliminary Economic Assessment. The PEA has been reviewed by independent international consulting group Golder Associates Pty Limited. The PEA financial model demonstrates low operating cost potential and a high Net Present Value based on hydrometallurgical processing of the Agata resource. Based on the encouraging results of the PEA the company will immediately commence a pre feasibility study on the Agata Nickel Project.
The PEA financial model is based on a mining inventory derived from the Agata resource, processed at a rate after ramp up of 1.8 million tonnes producing 18,000 tonnes of nickel per annum in intermediate product for 15 years via a combination of proven hydrometallurgical technologies: High Pressure Acid Leach (HPAL) Atmospheric agitated tank Leach and Saprolite Neutralization (SN).
| Nickel Price | 10 | 12 | 8.50 |
| NPV Post Tax | 390 | 680 | 160 |
| IRR Post Tax | 19% | 26% | 14% |
Nicke price in USD per pound
NPV Post Tax in USD million
NPVs are at a 10% discount rate
After tax cash flow @ USD 10 per pound Ni USD 173 million per annum. Payback 5.2 years from cash flow.
Cash operating cost USD 2.61 per pound Ni no credits or USD 1.65 per pound Ni with cobalt and power (acid plant) credits. Mining inventory of 26.1 million tonnes; processed 25.4 million tonnes. Processing rate 1.8 million tonnes per annum after ramp up. Mine life 15 years based on Agata only.
Nickel production after ramp up 18,000 tonnes of nickel per annum in mixed hydroxide product, 77% nickel value payable (50% of cobalt value payable, @ Ni price x 1.66) based on recent contracts.
On the basis of the results of the preliminary economic assessment the company will immediately commence a pre feasibility study into the Agata Nickel Project. The lead consulting group has been appointed and will be announced in a separate release.
Mr Jon Dugdale president & CEO of Mindoro said that "The Agata preliminary economic assessment indicates a high value, low operating cost nickel project based only on the current resource. Definition of further resources from the regional drilling program will enhance the economics of the project through additional mine life and or expanded production capacity. Based on the positive results from the preliminary economic assessment the company will immediately commence a pre feasibility study on the Agata project."
A scoping study into direct shipping of higher grade zones within the Agata resource was also completed as part of the preliminary economic assessment. The study examined three production scenarios, all of which are economically viable. However, due to the relatively low margins and current market uncertainty associated with direct shipping ore, the company is not planning to pursue a stand alone DSO at this stage, but is examining the potential for thermal upgrading to enhance the value of the shipped product.
The early results from thermal upgrading tests in progress at SGS Lakefield in Perth, supervised by Hatch Associates Pty Limited are positive, and the company has committed to further, larger scale testing at a Mines and Geosciences Bureau based testing facility in the Philippines. Positive results from this work and preliminary economic and marketing studies, will allow completion of a feasibility study into the early production stage of the project.
