Feasibility
The financial model generated from the Feasibility Study indicates the project is ROBUST with an Net Present Value (NPV) of US$270 million and an Internal Rate of Return (IRR) of 16 per cent based on a Nickel price of US$8.80/lb.
The completion of the Feasibility Study Report as a requirement for the 2008 renewal of tenement EL1165, has been the most important focus of the RMC Board and Management team and was completed at the beginning of February 2010.
The Feasibility Study on the Wowo Gap Project was based on the following key parameters:
- High Pressure Acid Leaching (HPAL) to process limonite ore.
- HPAL plant designed to process 1.25 Million tonnes per annum (Mtpa) of limonite and 0.25 Mtpa of saprolite ore over a 20 year operation life.
- Anticipated annual production of 13,000 tonnes per annum (tpa) of nickel metal and 1,300 tpa of Co metal equivalents.
- Nickel and cobalt product to be produced as a mixed sulphide product.
- The use of saprolite ore to neutralise acid, based on an anticipated 30 per cent Ni recovery from the saprolitic material.
- Excellent rheology of Wowo limonite allowed plant design for 40-45 per cent solids by volume which reduces overall acid consumption.
- Calculated pay back of capital within 5 years.
An analysis of the fundamental economics provides support for the conclusion that the project is economic using the forecast price of US$19,400 per tonne nickel, US$58,200 per tonne cobalt, and a USD/AUD exchange rate of 0.8.
The project has an estimated capital cost of US$772M and a forecast operating cost of US$3.88/lb which places the project operating costs at the midpoint of worldwide Nickel process operating costs. The financial model yields an internal rate of return of 16 per cent with a net present value of US$270 million (10 per cent discount rate).