Cassini Resources Ltd (ASX:CZI) has set the scene for further progress during 2020 after completing a positive pre-feasibility study (PFS) for the Nebo-Babel deposit of its West Musgrave Nickel-Copper Joint Venture Project during the March quarter.
The study by JV partner OZ Minerals Limited (ASX:OZL) assisted by CZI demonstrated a long life of around 26 years for the open pit nickel and copper mine.
Cassini managing director Richard Bevan said the company was delighted that the PFS showed the project had robust economics.
He said: “This is a very significant milestone for the West Musgrave Project and all its stakeholders.
“The PFS clearly demonstrates the strategic value of this project by confirming excellent economics on a long-life, low operating cost nickel and copper mine at Nebo-Babel.”
The capital cost is estimated at $995 million with a LOM average operating cost of $34.30/tonne.
The mine is expected to produce 31 million tonnes per annum of nickel and copper pre-strip and stockpiling, around 34 million tonnes per annum in years one-five during contractor mining.
Production will then jump to around 43 million tonnes per annum from year six onwards as it transitions to owner-operator, realising a lower mining cost.
Bevan said: “The PFS considers a modern mine development driven by innovation in mining, processing and power generation.
“This innovation has led to significant improvements in operating costs which now places the project in the lowest quartile of forecast global nickel producers.”
“With a mine life of over 26 years, the project will be well placed to capitalise on the high points of the nickel commodity price cycle and be resilient during periods of lower prices as well.“
Maiden probable ore reserve
The PFS resulted in a maiden probable ore reserve of 220 million tonnes at 0.36% copper and 0.33% nickel, representing around 22 years of the mine life.
Bevan said: “Substantial progress has been made on the metallurgical and resource definition work packages which has significantly de-risked the project.
“Over 170,000 metres of drilling has facilitated several phases of metallurgical pilot testing and the release of the maiden ore reserve which supports the first 22 years of mining, a remarkable achievement at this stage of study. “
Nickel production is estimated at around 27,000 tonnes per annum (years one-five) at 0.42% nickel, and around 22,000 tonnes per annum (year six onwards) at 0.31% nickel.
Copper production is estimated at around 33,000 tonnes per annum (years one-five) at 0.45% copper and around 27,000 tonnes per annum (year six onwards) at 0.43% copper.
Recoveries are at around 69% nickel and 78% copper, with concentrate at around 10-11% nickel and around 25-26% copper.
Cassini is not required to contribute to the West Musgrave Project costs until a bankable feasibility study is delivered by partner OZ Minerals.
Once the final investment decision is made, the company will be required to contribute its share of the pre-production capital in line with its equity position in the JV (30% or around $300 million).
The company is engaged in discussions with several potential funders.
“Adding value over time”
Bevan said: “Another exciting aspect is that the study is based only on the Nebo-Babel deposits and does not include deposits or exploration prospects within the broader joint venture project area.
“There are clearly defined opportunities to add additional value over time with continued exploration and development activities.
“We have recently expanded the project footprint to over 9,500 square kilometres in what is currently an under-explored province with enormous potential.”
Maiden drilling at the Yarawindah Brook Project in January
Yarawindah Brook Project
During the quarter, the company also completed its maiden drilling program at Yarawindah Brook in New Norcia, around 100 kilometres northeast of Perth.
This program comprised a total of nine diamond holes for 1,148 metres, with the Avena prospect returning results of 0.12 metres at 5.97% nickel, 0.75% copper, 0.39% cobalt and 2.66 g/t platinum group elements from 84.3 metres.
The Brassica prospect returned intercepts of 1.1 metres at 0.50% nickel, 0.10% copper and 0.08% cobalt from 92.9 metres and 0.7 metres at 0.09% nickel, 1.46% copper and 0.02% cobalt from 71.4 metres.
A soil geochemistry program comprising 1,041 samples has been completed and submitted for analysis in Perth with results expected by the end of May.
The company is confident the potential of the emerging nickel province has been demonstrated by Chalice Gold Mines Limited (ASX:CHN) recent high-grade sulphide discovery at the nearby Julimar Prospect.
Exploration at Yarawindah has been unaffected by recent COVID-19 travel restrictions in Western Australia and a surface fixed loop electromagnetic survey is underway and expected to be completed by the end of April.
At Mount Squires Gold Project, adjacent to the West Musgrave Project JV, no field activity was undertaken during the quarter.
All environmental and heritage clearances have been received for a reconnaissance-style drill program to commence once access to the Ngaanyatjarra Lands is re-opened and travel restrictions are eased.