DEFINITIVE FEASIBILITY STUDY CONCLUDES THAT MINDORO NICKEL CAN BE A MAJOR, LOW COST PRODUCER CLOSE TO THE BIGGEST MARKETS FOR NICKEL FOR MANY DECADES
Aker Solutions has successfully completed a Definitive Feasibility Study for the Mindoro Nickel project in the Philippines.
Intex Resources ASA (“Intex” or the “Company”) is pleased to report that Aker Solutions has delivered to the Company a positive Definitive Feasibility Study (DFS) for the Mindoro Nickel project in the Philippines on schedule. The study was expanded from the original plans to incorporate not only the limonite portion of the deposit but also the significant saprolite portion of the deposits.
Mindoro Nickel will produce 52,700 tonnes of LME-grade nickel briquettes, 15,920 tonnes of cobalt sulphate, 74,100 tonnes of chromite concentrate and 147,100 tonnes of ammonium sulfate per annum. Other potential marketable products include zinc sulphide (1,490 tonnes per annum) and electricity. Power will be generated from steam produced by burning sulphur rather than fossil fuel. This will produce 110MW of which approximately 90 MW will be used by the plant.
Operating Costs
Direct cash costs have been estimated at US$2.11 per pound nickel metal. This was based on data generated from process design criteria, and mass and energy balances. The operating cost estimate does not include sales credits for cobalt, chromite concentrate and ammonium sulphate fertilizer. Direct cash costs after credits have been estimated at US$ 0.6 per pound of nickel. This makes the project a substantial low cost producer of nickel close to the Asian markets.
Capital Costs
The capital costs for developing the Mindoro Nickel project have been estimated at US$2,455 million. This estimate has been prepared on a ‘bottom up’ approach based on the material takeoffs and specifications produced to achieve reliable results within an anticipated range of + 15%. The estimate includes mining equipment and ore transport by cable belt conveyor to the processing plant, the hydrometallurgical processing plants (HPAL and ATML) with ancillary plants, a metals refinery, a major wharf and related infrastructure including water supply and utilities, as well as a residue storage facility. The estimate also includes a contingency of US$339M. The capital cost is equivalent to US$21 per pound nickel annually, which compares very well to other industry projects. (Please see the attached table.)
Mineral Reserves & Resources
Resource drilling has established 224 million tonnes of ore in the Measured and Indicated resource category for Lower Kisluyan and Buraboy deposits at a grade of 0.83% nickel and 0.05% cobalt, at 0.5% cut off grade (cog). This corresponds to a total of 1.9 million tonnes of in-situ nickel metal. At operational cog of 0.7% nickel, the Measured and Indicated resources are 180 million tonnes with 0.91% nickel, holding 1.6 million tonnes nickel. The total resource is estimated to 315 million tonnes with a total of 2.6 million tonnes of in-situ nickel metal including the inferred resource base. The resources estimates were directed by independent consultant and Qualified Person Marc-Antoine Audet, P.Geo, Ph.D. and conducted to JORC code compliance (please refer to press released dated 16 Feb. 2010 for further details of the mineral resources estimate).
The Proved and Probable mineral reserves of the Mindoro deposit have been significantly increased since the processing of both limonite and saprolite ore was included in the DFS. Snowden has estimated Proved and Probable reserves of 126 million tonnes at a grade of 0.95% nickel and 0.06% cobalt for the Lower Kisluyan and Buraboy laterite deposits. The reserves include 59 million tonnes of limonite ore at a grade of 0.92% nickel and 0.09% cobalt at a cog of 0.75% nickel and 67 million tonnes of saprolite ore at a grade of 0.98% nickel and 0.03% cobalt at a cog of 0.85%. The reserves contain approximately 1.2 million tonnes of in-situ nickel metal. The Proved and Probable reserve base alone accounts for 21 years of production (please refer to press release dated 9 Feb. 2010 for further details of the mineral reserves estimate).
Mining
The design calls for mining of approximately 6.0 million tonnes per annum of nickel laterite ore (dry basis). The mining will be conducted as a conventional surface operation using hydraulic excavators and off road trucks, and with mined out areas to be sequentially rehabilitated and replanted immediately after completion. The mining calls for excavation of the two principal ore types approximately in the ratio they occur, leaving minimal need for long-term stockpiles. The ore haulage will be by 43 km overland cable-belt conveyor to the coast near Pola where the process plant, shipping infrastructure, villages, and other services are located.
Processing
The processing will use an enhanced conservative flow sheet that allows for the integration of conventional limonite and saprolite hydrometallurgical ore processing into a single path. The limonite and saprolite ores will be processed separately in the first stage of the process route, before the pregnant slurries will be combined for the neutralisation and solid liquid separation. Chromite concentrate will be produced from the beneficiation of the limonite slurry through gravity separation. (Please see attached Fig 1).
SGS Lakefield of Canada has conducted comprehensive metallurgical testwork on the Mindoro ore and has concluded the following:
• Limonite ore can be favorably processed through High-Pressure Acid Leach (“HPAL”)
• Saprolite ore can be favorably processed through Atmospheric Leach (“ATML”)
The metallurgical testwork has determined that the Mindoro ores exhibit exceptional properties in terms of leach kinetics and recoveries:
• HPAL: 96.5-97.5% nickel extraction from limonite ore in 30 minutes
• ATML: 97-98% nickel extraction from saprolite ore in 6 hours
The fast HPAL kinetics will allow the HPAL plant to process 2.8 million tonnes (dry basis) of beneficiated limonite ore through a single autoclave train per annum.
In the second stage of the process route, limonite and saprolite leach slurries will be combined and treated in the saprolite neutralization circuit. During this process, saprolite ore will be added to the leach slurries to reduce the acidity. The use of saprolite ore replaces the use of limestone and therefore significantly decreases the requirements for limestone in the process as well as adds the extra benefit of further nickel recoveries from the additional saprolite ore. Metallurgical testwork has determined 81-82% nickel extraction from saprolite ore in 6 hours as part of the saprolite neutralization process.
The third stage of the process route involves counter-current decantation, solution neutralisation and purification of the pregnant solution for precipitation of an intermediate product of mixed sulphides. The leached residue will undergo final neutralization before deposition in the residue storage facility. The mixed sulfides will enter the metals refinery and be redissolved and separated into the final products of LME-grade nickel briquettes and cobalt sulphate. Substantial amounts of ammonium sulphate fertiliser will be produced as a by-product. The overall recoveries have been determined to be 89% for nickel and 91% for cobalt.
Revenues will be derived from the sale of nickel briquettes, cobalt sulphate, ammonium sulphate, chromite concentrates, and some zinc sulphide. Minercon International, Inc., forecasts a long term nickel price at US$8.0 to US$8.5 per pound nickel based on the recovery of global GDP and industrial production plus anticipated re-stocking of industrial raw materials such as stainless steel products. Long term prices for cobalt at US$16 to US$18 per pound cobalt, chromite at US$250 per tonne of metallurgical grade concentrate, and ammonium sulphate at US$168 per tonne are also forecasted.
President & CEO of Intex Resources ASA, Mr. Erlend Grimstad comments:
“The result of this 21-month long DFS program shows us Mindoro Nickel is technically and economically viable and attractive. It is also a project which can be established in an environmentally responsible manner. Mindoro Nickel will be a major low-cost nickel producer, located close to the strategic Asian markets in the decades to follow. A large resource and reserve base for the project has been documented to international standards. The unique reactivity of the ore materials is key to a cost efficient production of nickel. The environmental work has documented environmentally soundness. There is significant upside potential for identifying an even larger ore body and thereby longer life of mine. The ore does not have to be upgraded. The project utilizes known and proven technology.”
Erlend Grimstad
President & CEO
Intex Resources ASA
For further information please contact:
Andrea Båsen, VP Corporate Development & IR
Phone: +47 23 11 33 40
Mobile: +47 412 39 704
Email: ab@intexresources.com
Intex Resources ASA
Munkedamsveien 45 A
0250 Oslo
Norway
NO 976 094 875 MVA
Phone: +47 23 11 33 44
Fax: +47 23 11 33 45
Mindoro Nickel will produce 52,700 tonnes of LME-grade nickel briquettes, 15,920 tonnes of cobalt sulphate, 74,100 tonnes of chromite concentrate and 147,100 tonnes of ammonium sulfate per annum. Other potential marketable products include zinc sulphide (1,490 tonnes per annum) and electricity. Power will be generated from steam produced by burning sulphur rather than fossil fuel. This will produce 110MW of which approximately 90 MW will be used by the plant.
Operating Costs
Direct cash costs have been estimated at US$2.11 per pound nickel metal. This was based on data generated from process design criteria, and mass and energy balances. The operating cost estimate does not include sales credits for cobalt, chromite concentrate and ammonium sulphate fertilizer. Direct cash costs after credits have been estimated at US$ 0.6 per pound of nickel. This makes the project a substantial low cost producer of nickel close to the Asian markets.
Capital Costs
The capital costs for developing the Mindoro Nickel project have been estimated at US$2,455 million. This estimate has been prepared on a ‘bottom up’ approach based on the material takeoffs and specifications produced to achieve reliable results within an anticipated range of + 15%. The estimate includes mining equipment and ore transport by cable belt conveyor to the processing plant, the hydrometallurgical processing plants (HPAL and ATML) with ancillary plants, a metals refinery, a major wharf and related infrastructure including water supply and utilities, as well as a residue storage facility. The estimate also includes a contingency of US$339M. The capital cost is equivalent to US$21 per pound nickel annually, which compares very well to other industry projects. (Please see the attached table.)
Mineral Reserves & Resources
Resource drilling has established 224 million tonnes of ore in the Measured and Indicated resource category for Lower Kisluyan and Buraboy deposits at a grade of 0.83% nickel and 0.05% cobalt, at 0.5% cut off grade (cog). This corresponds to a total of 1.9 million tonnes of in-situ nickel metal. At operational cog of 0.7% nickel, the Measured and Indicated resources are 180 million tonnes with 0.91% nickel, holding 1.6 million tonnes nickel. The total resource is estimated to 315 million tonnes with a total of 2.6 million tonnes of in-situ nickel metal including the inferred resource base. The resources estimates were directed by independent consultant and Qualified Person Marc-Antoine Audet, P.Geo, Ph.D. and conducted to JORC code compliance (please refer to press released dated 16 Feb. 2010 for further details of the mineral resources estimate).
The Proved and Probable mineral reserves of the Mindoro deposit have been significantly increased since the processing of both limonite and saprolite ore was included in the DFS. Snowden has estimated Proved and Probable reserves of 126 million tonnes at a grade of 0.95% nickel and 0.06% cobalt for the Lower Kisluyan and Buraboy laterite deposits. The reserves include 59 million tonnes of limonite ore at a grade of 0.92% nickel and 0.09% cobalt at a cog of 0.75% nickel and 67 million tonnes of saprolite ore at a grade of 0.98% nickel and 0.03% cobalt at a cog of 0.85%. The reserves contain approximately 1.2 million tonnes of in-situ nickel metal. The Proved and Probable reserve base alone accounts for 21 years of production (please refer to press release dated 9 Feb. 2010 for further details of the mineral reserves estimate).
Mining
The design calls for mining of approximately 6.0 million tonnes per annum of nickel laterite ore (dry basis). The mining will be conducted as a conventional surface operation using hydraulic excavators and off road trucks, and with mined out areas to be sequentially rehabilitated and replanted immediately after completion. The mining calls for excavation of the two principal ore types approximately in the ratio they occur, leaving minimal need for long-term stockpiles. The ore haulage will be by 43 km overland cable-belt conveyor to the coast near Pola where the process plant, shipping infrastructure, villages, and other services are located.
Processing
The processing will use an enhanced conservative flow sheet that allows for the integration of conventional limonite and saprolite hydrometallurgical ore processing into a single path. The limonite and saprolite ores will be processed separately in the first stage of the process route, before the pregnant slurries will be combined for the neutralisation and solid liquid separation. Chromite concentrate will be produced from the beneficiation of the limonite slurry through gravity separation. (Please see attached Fig 1).
SGS Lakefield of Canada has conducted comprehensive metallurgical testwork on the Mindoro ore and has concluded the following:
• Limonite ore can be favorably processed through High-Pressure Acid Leach (“HPAL”)
• Saprolite ore can be favorably processed through Atmospheric Leach (“ATML”)
The metallurgical testwork has determined that the Mindoro ores exhibit exceptional properties in terms of leach kinetics and recoveries:
• HPAL: 96.5-97.5% nickel extraction from limonite ore in 30 minutes
• ATML: 97-98% nickel extraction from saprolite ore in 6 hours
The fast HPAL kinetics will allow the HPAL plant to process 2.8 million tonnes (dry basis) of beneficiated limonite ore through a single autoclave train per annum.
In the second stage of the process route, limonite and saprolite leach slurries will be combined and treated in the saprolite neutralization circuit. During this process, saprolite ore will be added to the leach slurries to reduce the acidity. The use of saprolite ore replaces the use of limestone and therefore significantly decreases the requirements for limestone in the process as well as adds the extra benefit of further nickel recoveries from the additional saprolite ore. Metallurgical testwork has determined 81-82% nickel extraction from saprolite ore in 6 hours as part of the saprolite neutralization process.
The third stage of the process route involves counter-current decantation, solution neutralisation and purification of the pregnant solution for precipitation of an intermediate product of mixed sulphides. The leached residue will undergo final neutralization before deposition in the residue storage facility. The mixed sulfides will enter the metals refinery and be redissolved and separated into the final products of LME-grade nickel briquettes and cobalt sulphate. Substantial amounts of ammonium sulphate fertiliser will be produced as a by-product. The overall recoveries have been determined to be 89% for nickel and 91% for cobalt.
Revenues will be derived from the sale of nickel briquettes, cobalt sulphate, ammonium sulphate, chromite concentrates, and some zinc sulphide. Minercon International, Inc., forecasts a long term nickel price at US$8.0 to US$8.5 per pound nickel based on the recovery of global GDP and industrial production plus anticipated re-stocking of industrial raw materials such as stainless steel products. Long term prices for cobalt at US$16 to US$18 per pound cobalt, chromite at US$250 per tonne of metallurgical grade concentrate, and ammonium sulphate at US$168 per tonne are also forecasted.
President & CEO of Intex Resources ASA, Mr. Erlend Grimstad comments:
“The result of this 21-month long DFS program shows us Mindoro Nickel is technically and economically viable and attractive. It is also a project which can be established in an environmentally responsible manner. Mindoro Nickel will be a major low-cost nickel producer, located close to the strategic Asian markets in the decades to follow. A large resource and reserve base for the project has been documented to international standards. The unique reactivity of the ore materials is key to a cost efficient production of nickel. The environmental work has documented environmentally soundness. There is significant upside potential for identifying an even larger ore body and thereby longer life of mine. The ore does not have to be upgraded. The project utilizes known and proven technology.”
Erlend Grimstad
President & CEO
Intex Resources ASA
For further information please contact:
Andrea Båsen, VP Corporate Development & IR
Phone: +47 23 11 33 40
Mobile: +47 412 39 704
Email: ab@intexresources.com
Intex Resources ASA
Munkedamsveien 45 A
0250 Oslo
Norway
NO 976 094 875 MVA
Phone: +47 23 11 33 44
Fax: +47 23 11 33 45
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