Nebo-Babel Pre-Feasibility Study: a significant milestone for Cassini
(firmenpresse) - HIGHLIGHTS:
- High quality Pre-Feasibility Study places Nebo-Babel deposits in lowest quartile of forecast global nickel producers
- Robust economics on 26 year mine life, open pit, low carbon footprint operation
- Maiden Ore Reserve supports first 22 years of operation
- Project funding options to be progressed
- Opportunities to add additional value through further exploration and development activities across the 9,500km2 West Musgrave Province
Cassini Resources Limited (Cassini, the Company, ASX:CZI) notes the announcement made today by Joint Venture Partner OZ Minerals Limited (ASX:OZL) regarding results of the Nebo-Babel Pre-Feasibility Study (PFS). The PFS, Ore Reserve Statement and Mineral Resource Statement are attached to this announcement at Annexure A.
Cassini Managing Director, Mr Richard Bevan said We are delighted with the Pre-Feasibility Study outcomes for the Nebo-Babel deposits. This is a very significant milestone for the West Musgrave Project (WMP, the 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 OZ Minerals Technical Team, aided by CZIs own geologists, has delivered a very high quality PFS with spending in excess of $50m to date. Substantial progress has been made on the metallurgical and resource definition work packages which has significantly de-risked the project. Over 170,000m of drilling has facilitated several phases of metallurgical pilot testing and the release of the Maiden Ore Reserve which supports the first 22 years of mining, a remarkable achievement at this stage of study.
Key Metrics for Cassinis 30% relevant interest in the WMP
Key Financial and Unit Cassini
Production Interest
Metrics 1
Average Ni Production Yrktpa ~ 8.1
1
- 5
Average Ni Production Yrktpa ~ 6.6
6 - Life of
Mine
Average Cu Production Yrktpa ~ 9.9
1
- 5
Average Cu Production Yrktpa ~ 8.1
6 - Life of
Mine
Pre-production capital A$m ~ 298
Average annual net cash A$mpa ~ 57
flow (post
tax)
1. Cassinis interest in the WMP is calculated by taking 30% of the WMP Financial and Production Metrics as set out in the PFS Announcement in Annexure A.
The value of the WMP to Cassini may vary from a direct 30% of the WMP NPV, including due to the following modifying factors:
i) Under the terms of the JV Agreement, CZI is not required to fund any costs associated with the Feasibility Study or any associated Option or Scoping Studies at the WMP until OZ Minerals deliver a bankable FS report on Nebo-Babel. CZIs 30% of the JV costs (in excess of the A$36m earn-in amount), are funded by OZ Minerals as part of a deferred loan carry. The loan is to be repaid 5 years after the commencement of commercial production. As at 31 December 2019 the loan carry amount was A$7.265M (see Quarterly Activity and Cash flow Statement released 24 January 2020). Cassini is currently unable to determine the date of completion of either a Feasibility Study or the commencement of commercial production, should they occur. OZ Minerals is the operator of the WMP JV.
ii) As per the terms and conditions of Cassinis original agreement to acquire the WMP (see ASX announcement 14 April 2014), CZI is liable for a one-off A$10m payment (escalated by CPI), 12 months after first production to BHP Billiton.
As a result, Cassini is unable to calculate a NVP for its interest in the WMP at this time. Cassini will keep the market informed as the WMP JV progresses.
Production Target Cautionary Statement
The Production Target and forecast financial information derived from the Production Target referred to in this ASX release is based on 84% Probable Ore Reserves, 5% Indicated Mineral Resources and 11% Inferred Mineral Resources. The modifying factors used in the estimation of the Ore Reserve were also applied to the Indicated Resources and Inferred Resources.
There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the Production Target itself will be realised.
The material assumptions used in the estimation of the Production Target and associated forecast financial information are set out in West Musgrave Project Nebo-Babel Mineral Resource and Ore Reserve Statements and Explanatory Notes as at 11th February 2020, Table 1.
Supporting information for the production target above can be found in Annexure A.
The Ore Reserve and Mineral Resource estimates underpinning the Production Target were prepared by a Competent Person in accordance with the JORC Code 2012.
Mr Bevan further commented 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.
World demand for high-quality battery and electrification metals is expected to ramp-up over the coming years. We note the dearth of advanced, quality, scalable nickel sulphide projects worldwide, which can satisfy this emerging market.
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 9,500km2 in what is currently an under-explored province with enormous potential.
Id like to commend our Joint Venture partner OZ Minerals and their Project team for delivering an exceptional study. We have enjoyed an excellent working relationship with OZ Minerals and look forward to progressing together through the next study phase and on to production.
Lastly, Id like to thank our technical team for their valuable contribution to the PFS and of course, our loyal shareholders for their support during this journey. We look forward to their continued support as the Company takes the next steps to realise the full value of the West Musgrave Project..
Becoming Australias flagship nickel sulphide producer
Cassini commissioned Wood Mackenzie to provide independent bench marking of the project against all forecast global nickel producers. Wood Mackenzie confirmed that the forecast C1 operating costs of the project would place it in the lowest quartile of global nickel production (Figure 1). This demonstrates that Nebo-Babel will be a high margin producer driven by low mining costs, substantial by-product credits and innovative, low power, processing solutions.
https://www.irw-press.at/prcom/images/messages/2020/50006/200212 CZI PFS Commentary_Final_12 2PRcom.001.jpeg
Figure 1. Global nickel supply C1 cost curve - 2026. Notes: Cost curve from Wood Mackenzie data, Nebo-Babel costs provided by Cassini Resources Limited. Year 2026 is the third year of production with annual metal output approximating the first ten years of production.
Project Funding
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, Cassini is required to contribute its share of the pre-production capital in line with its equity position in the JV (i.e. 30% or ~A$300m).
It is the view of the Company that the strong project economics, key strategic characteristics of the project (26 year mine life, lowest quartile for operating costs) and the presence of a strong JV partner will provide a number of funding options for the Company.
Cassini has been approached and is engaged in discussions with a number of potential funders, at a level commensurate with the current stage of the WMP. These include debt financing, traditional bank resource project financing, offtake funding and streaming mechanisms. These discussions are continuing.
Investors should note that there is no certainty that Cassini, either individually or jointly with its JV partner, will be able to raise the funding required, or that funding may only be available on terms that may be dilutive to, or otherwise affect, the value of each companys existing shares. It is also possible that the partners, either individually or jointly, could pursue other value realisation strategies
Authorised for release to the market by:
Richard Bevan
Managing Director
Cassini Resources Limited
Telephone: +61 8 6164 8900
E-mail: admin(at)cassiniresources.com.au
About the Company
Cassini Resources Limited (ASX: CZI) is a base and precious metals developer and explorer based in Perth. In April 2014, Cassini acquired its flagship West Musgrave Project (WMP), located in Western Australia. The Project is a new mining camp with three existing nickel and copper sulphide deposits and a number of other significant regional exploration targets already identified. The WMP is the largest undeveloped nickel - copper project in Australia.
In August 2016, Cassini entered into a three-stage $36M Farm-in/Joint Venture Agreement with prominent Australian mining company OZ Minerals Ltd (ASX: OZL). The Joint Venture provides a clear pathway to a decision to mine and potential cash flow for Cassini.
Cassini is also progressing its Mt Squires Gold Project (CZI 100%), and the Yarawindah Brook Nickel - Copper - Cobalt Project (CZI 80%), both located in Western Australia.
Please follow the link to view entire original news:
https://www.asx.com.au/asxpdf/20200212/pdf/44f0x6fcq1pqpg.pdf
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Cassini Resources ist ein australisches Basismetallunternehmen, das das größte unentwickelte Nickel- und Kupferprojekt Australiens besitzt.
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Datum: 12.02.2020 - 06:48 Uhr
Sprache: Deutsch
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