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Rox Resources' study values Fisher East nickel project at up to A$79M

A scoping study for Rox Resources Ltd.'s Fisher East nickel project in Western Australia outlined a pretax net present value of up to A$79 million, an internal rate of return of 44% and payback of 2.3 years based on a nickel price of US$7.50 per pound, according to an Oct. 10 news release.

The study envisages either a "concentrator case" in which Rox builds a concentrator plant on-site with all associated infrastructure or a "toll mill case" in which Rox hauls run-of-mine ore to a nearby processing plant for toll treatment with a third party.

For the toll mill option, the study pegged a net pretax income of A$102 million, a net present value of A$58 million, an internal rate of return of 55% and a payback period of 1.8 years. Mine life came in at six years for both options.

Both options will yield 7,300 tonnes of nickel in concentrate per year for life-of-mine production of 44,100 tonnes.

Life-of-mine sustaining capital was estimated at A$38 million for the concentrator case and at A$37 million for the toll mill case.

Preproduction CapEx was estimated at A$87 million for the concentrator case and at A$48 million for the toll mill case. Sustaining CapEx was estimated at A$38 million for the concentrator and at A$37 million for toll milling.

C1 cash costs came in at A$4.20/lb for the concentrator case and A$4.60/lb for toll milling, while all-in sustaining costs were pegged at A$4.80/lb and A$5.10/lb, respectively.

The study also took into account a mining inventory of 2.9 million tonnes grading 1.7% nickel, using a 1.2% nickel cutoff. Mineral resources were estimated at 4.2 million tonnes grading 1.9% nickel, using a 1% nickel cutoff.

It also concluded that a production rate of 500,000 tonnes per annum produced optimum capital and operating efficiencies.