THE BOURSE WHISPERER: Cassini Resources (ASX: CZI) received the nod approval from OZ Minerals (ASX: OZL) to proceed the West Musgrave nickel copper project in Western Australia to a Pre-Feasibility Study (PFS).
Cassini Resources said the decision stemmed from positive results from a recently completed further scoping study (FSS), which examined project scale options and management of technical risks.
The FSS study evaluated several development scenarios ranging from six to 12 million tonnes per annum throughput with results demonstrating the economic viability of the project at all the throughput scenarios with strong annual nickel and copper production and low operating costs.
Cassini indicated the 10Mtpa scenario presented the most financial potential.
As a result, OZ Minerals has decided to proceed to the next stage of its Farm-in and Joint Venture agreement with Cassini Resources.
OZ Minerals can earn 51 per cent of the project with an investment of $19 million.
“The Scoping Study advances the development of the Nebo-Babel deposits,” Cassini Resources managing director Richard Bevan said in the company’s announcement to the Australian Securities Exchange.
“The increased scale of the project has opened up a range of possibilities beyond what we had originally contemplated, with potential for further upside to be realised in the upcoming PFS.
“We have an initial eight years of mine life with clear view on increasing this to beyond 15 years.
“The exploration program will expand our understanding of the mineralisation at One Tree Hill and the Succoth copper deposit, as we pursue our goal of establishing a multi-decade mining operation.”
In support, Oz Minerals chief executive officer Andrew Cole said, “The Further Scoping Study has confirmed the economic viability of the Nebo-Babel project and has increased our confidence in the potential of the project.
“This is an exciting new mineral province with attractive near mine and district opportunities.
“Investment will be made during the prefeasibility to focus on Inferred to Indicated Resource conversion for inclusion into the mining inventory thereby extending mine life within the current pre-production capital profile.
“The geological style at Nebo-Babel shows good consistency for conversion.
“The PFS will also focus on further improving the metallurgical recoveries.
“We have developed a good working relationship with Cassini and look forward to the outcomes of this next study phase.”
Cassini said the OZ Minerals’ investment will be used to progress pre-feasibility work on the Nebo-Babel deposits and exploration activities within the broader project area.
To get things moving, Cassini has elected for OZ Minerals to manage the PFS.
As part of this agreement, Cassini will be paid $1.9 million at the commencement of the PFS and will continue to manage on-ground activities associated with the PFS and the regional exploration program.