Since 2007, Nickel Mountain Resources has been working towards developing the Rönnbäcken Nickel Project (RNP). A subsidiary, Nickel Mountain AB, was established to hold 100% the assets of the RNP. The RNP is situated in the Swedish Caledonian mountain range in northern Sweden, about 25 km to the south of the village of Tärnaby, Storuman Municipality in Västerbotten County. The area is host to a number of Swedish mine operations. The Rönnbäcken nickel property comprises several exploration licences and exploitation concessions, which are 100% owned by Nickel Mountain. There are a series of low grade nickel deposits amenable to open pit mining within the Project area. The Project comprises three low-grade, high-tonnage, nickel-sulphide deposits amenable to open pit mining: Vinberget, Rönnbäcksnäset and Sundsberget. The shape and volume of the deposits make them suitable for high tonnage, low cost, open pit mining at a low strip ratio. Nickel Mountain Resource’s objective is to establish a 26,000 tonnes of nickel per year mine and concentrator for producing a high grade nickel concentrate.
A preliminary economic assessment was completed in April 2011 on RNP by SRK Consulting (Sweden) AB.
The following is a summary of the findings of the preliminary economic assessment:
- Average annualized production of 26,000 tonnes of nickel and 760 tonnes of cobalt in concentrate based on an annual feed throughput of 30 million tonnes.
- Life of Mine of 19 years with a potential for this to increase following the delineation of further resources by ongoing exploration.
- Low stripping ratio of 0.72:1 (waste tonnes:ore tonnes).
- High grade sulphide concentrate with a 28% nickel content. High concentrate grade has been demonstrated through our own lab and minipilot work with Outotec, as well as through full scale pilot work (4,000 tonnes) conducted by Boliden during the 1970s. Raglan was piloted at this same pilot plant.
- Average LOM mine gate operating cost of US$4.16/lb (US$9,171/t) of nickel recovered to concentrate
- Average LOM C1 cash operating cost of US$5.55/lb (US$12,200/t) of payable nickel net of by-product credits.
- Estimated start-up capital cost of US$1,161 million, including working capital.
- Pre-tax net present value at a discount rate of 8% ranges from US$316 million to US$1,572 million between nickel prices of US$9.00/lb and US$12.00/lb generating an internal rate of return from 12.4% to 26.6% and an undiscounted cash flow range from US$1,701 million to US$4,498 million, respectively.
- Further assessment of the technical viability and economics of recovering magnetite from the flotation tailings to produce an iron concentrate with a grade of up to 62.4% Fe has the potential to significantly improve the economics of the Project
- Excellent infrastructure with close access to hydropower, power grid, roads, seaport and airport.
- Low sulphide content and presence of buffering minerals reduce risks of environmental impact.
The Company is aiming to complete a Pre-Feasibility Study on the project by the end of the fourth quarter of 2012. Not only is this an important stage for de-risking the project, but, there will be further work on a number of areas presenting opportunities to increase value:
- Potential to produce over 1 million tonnes per year of a 62%+ magnetite iron ore concentrate byproduct. The ability to pelletize production offers premium pricing.
- Operating and capital cost reduction through: a )in-pit crushing and new truck technology, b) reagent optimization, and c) tailings dam costs optimization
- Potential to increase the concentrate nickel grade further leading to a reduction in treatment charge cost/lb nickel
- Further exploration of untested areas of serpentinite, and the deposits are open at depth
RNP mini-pilot concentrate
RNP flotation concentrate during mini-pilot testwork, March 2010
