An updated feasibility study for RNC Minerals' Dumont nickel-cobalt project in Quebec delivered a posttax net present value, discounted at 8%, of US$920 million, with a 15.4% internal rate of return over a 30-year mine life.
Initial capex was pegged at about US$1.02 billion, lower than the US$1.19 billion outlined in a 2013 study. The latest study was based on nickel prices of US$7.75 per pound and an exchange rate of 75 U.S. cents for every C$1.
The company expects the project to initially produce 33,000 tonnes per annum of nickel before ramping up to 50,000 tpa during expansion for a total life-of-mine production of about 1.2 million tonnes.
RNC defined first-phase cash costs of US$2.98/lb, life-of-mine cash costs of US$3.22/lb and all-in sustaining costs of US$3.80/lb of payable nickel.
Annual EBITDA is estimated at US$303 million in the first phase and US$425 million in the second phase. Free cash flow is projected to reach an average of US$201 million annually over the mine life.
The company said May 30 that the project's value can be further increased by either adding an autonomous fleet operation, increasing the initial start-up to 75,000 tonnes per day from 52,500 tpd, or including the production of magnetite concentrate.
The study also included an updated resource estimate. The project now hosts measured and indicated resources of 1.7 billion tonnes grading 0.27% nickel, 107 ppm cobalt, 0.020 g/t palladium and 0.009 g/t platinum for 4.4 Mt of nickel, 180,000 tonnes of cobalt, 1.0 Moz of palladium and 461,000 ounces of platinum.
Inferred resources stood at 499.8 Mt grading 0.26% nickel, 101 ppm cobalt, 0.014 g/t palladium and 0.006 g/t platinum for 1.3 Mt of nickel, 50,000 tonnes of cobalt, 220,000 oz of palladium and 92,000 oz of platinum.
Proven and probable reserves totaled 1.03 billion tonnes grading 0.27% nickel, 107 ppm cobalt, 0.019 g/t palladium and 0.009 g/t platinum for 6.08 billion pounds of nickel, 243 Mlbs of cobalt, 627,000 oz of palladium and 287,000 oz of platinum.