THE BOURSE WHISPERER: Cassini Resources (ASX: CZI) has released the long-awaited Scoping Study for the company’s 100 per cent-owned Nebo-Babel nickel-copper deposits, located within the West Musgrave project in Western Australia.
Cassini said the Study results highlight the high-quality of the Nebo-Babel nickel-copper deposit, while confirming the economic viability of a future mining operation.
The report has delivered strong economics for the project, which Cassini said will allow for flexibility in determining the most appropriate development strategy, dependent on the nickel and copper price environment.
The project has come up trumps in terms of being economically viable at a range of different mine production and processing rates.
Cassini has assessed two preferred scenarios relating to production targets
A four million tonnes per annum mining and processing rate case over the life of mine, and a Staged Case scenario, which would commence processing ore at 1.5 million tonnes per annum expanding to four million tonnes per annum after eight years.
The cash costs for Nebo-Babel’s are forecast to be very low under both cases, at the lowest end of the range of Australian nickel producers, which Cassini considers to be a strategic advantage.
The estimated life of mine (LOM) C1 cash operating cost (after by-product credits) for the four million tonnes per annum Case is forecast to average US$1.82 per pound nickel in concentrate (Staged Case estimate US$2.61 per pound nickel in concentrate).
The four million tonnes per annum scenario is estimated to average annual production to be 12,300 tonnes per annum of nickel in concentrate and 14,300 tonnes per annum of copper in concentrate over an initial LOM of 15 years (Staged Case estimated to be 8,900 tonnes per annum of nickel in concentrate and 8,500 tonnes per annum of copper in concentrate over initial LOM of 15 years.
Cassini declared the level of annual production resulting from the four million tonnes per annum case would position it as a leading Australian nickel production company.
“The Scoping Study clearly demonstrates that this project will deliver enormous value to Cassini and its shareholders,” Cassini Resources managing director Richard Bevan said in the company’s announcement to the Australian Securities Exchange.
“It shows the significant economic value of Nebo-Babel, which is driven by its very low operating cost profile, huge mineral inventory, and exciting exploration potential of both it and the broader project area, as demonstrated by targets such as Succoth.
“An enormous amount of work has been done to release this study less than 12 months from acquisition, with the positive outcomes on all fronts reaffirming our strategy of focussing on the higher grade subset of the resource and applying a ‘mid-cap’ approach to development.
“We have rapidly progressed the project forwards in its development cycle and have highlighted a number of areas where we are confident we can further enhance its value.
“It is a very significant asset, one which we are highly confident of developing into a mining operation in the near future.”