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NQ Minerals: THE INVESTMENT CASE

Positive study shows NQ Minerals could begin production at Hellyer this year

Compelling economics at the Hellyer project are underpinning NQ's plans for 2018
Positive study shows NQ Minerals could begin production at Hellyer this year
INVESTMENT OVERVIEW: NQMI The Big Picture
Hellyer has a significant resource base, including nearly 800,000 ounces of gold

Consultants at CSA Global have estimated that the Hellyer mine owned by NQ Minerals (NEX:NQMI, OTCQB:NQMLF) has a net present value of US$113.2mln, based on the existing ore reserve and using a discount rate of 10%.

The project also boasts a corresponding internal rate of return of 90.94%, or 197%, excluding the acquisition cost.

READ: NQ Minerals poised to transition to producer at Hellyer Gold Project

Work will now commence, based on the recommendations provided by CSA. Metallurgical sampling and testing has been carried out to forecast processing performance and provide recommendations for plant modifications.

Engineering studies and assessments have been completed to estimate project capital costs and operating costs.

The processing facilities are currently undergoing a maintenance and refurbishment programme, which includes preparation of the plant for the new project to re-treat the Hellyer tailings to produce lead, zinc, and precious metal concentrates.

The potential now exists for NQ to commence operations in 2018.

Chairman speaks of “compelling economics”

“We are pleased that the CPR demonstrates the compelling economics and upside potential of our tailings retreatment project in Tasmania,” said non-executive chairman Brian Stockbridge.

He argued that the competent persons report validates the extensive work undertaken over the last year by the company and its consultants.

“Subject to completion of financing, the company is now well set to move into production in 2018 and we look forward to providing further updates in due course,” he added.

Permit to operate is also in place

What’s more, the government of Tasmania recently granted NQ Minerals permission to operate at Hellyer, based on environmental studies undertaken by the company and the submission of an environmental management plan in 2017.

“This is an exciting milestone for NQ Minerals,” said Stockbridge.

“This permit now offers us a clear pathway to production in 2018. Coupled with the publication of our recent competent persons report and, subject to the completion of financing, we are confident of bringing into production a project that has significant positive environmental impact.”

Clear work programme to develop established resource

Held within four separate areas, the tailings at Hellyer total 11.24 mln tonnes, and comprise a JORC compliant resource estimated at 9.5 mln tonnes, hosting gold at 2.61 grams per tonne for 796,000 ounces, silver at 104 grams per tonne for 32mln ounces, plus lead and zinc in significant quantities.

In addition to these tailings, the Hellyer assets include a large pre-existing mill facility and full supporting infrastructure, including a direct rail line to port. It also includes a fully permitted consolidated mining lease.

“The Hellyer gold mine will be a flagship project for NQ Minerals and is expected to see us transform into a near-term producer within a 12 month time-frame,” said Stockbridge.

“First work will involve the refurbishment of the existing operating facilities in order to extract and treat the large high-grade tailings deposit on site and produce three marketable concentrates: lead, zinc, and gold/silver/pyrite. Hellyer is a world-class, company-maker project that blends well with our North Queensland assets and our long term goal to become a significant gold and base metal producer in Australia.”

Other exploration upside

NQ Minerals also has advanced gold exploration upside at Ukalunda, last drilled in 2016, and at Square Post, both in North Queensland.

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