THE DRILL SERGEANT: Independence Group (ASX: IGO) has been busy of late working to maximise value from the high-quality nickel and copper concentrates produced at the company’s Nova Operation in Western Australia.
The recent work includes the completion of a highly competitive concentrate tendering process and conclusion of a Downstream Nickel Sulphate Pre-Feasibility Study.
A binding concentrate offtake agreement for a three-year term has been executed with Trafigura for 50 per cent of nickel concentrate and for 100 per cent of copper concentrate produced from Nova.
An offtake term sheet with BHP Billiton Nickel West for an additional 50 per cent of the nickel volume for a period of five years has been executed, subject to the completion of a formal agreement within one month and all necessary internal approvals of both parties.
Having identified the potential value of downstream processing and, following scoping and proof-of-concept studies, IGO initiated a PFS on the technical and financial merits of converting nickel sulphide concentrate from Nova into high quality nickel sulphate via its trademarked (patent pending) The IGO Process.
The company declared the study demonstrated the technical feasibility of The IGO Process, which it describes as being “a technically advanced process for converting nickel sulphide concentrate directly to battery grade nickel sulphate”.
The study involved extensive pilot and continuous plant testwork to be completed on The IGO Process that achieved metal extraction rates of better than 97 per cent for both nickel and cobalt.
The results underlined IGO’s confidence in the potential for The IGO Process to become an established flowsheet for the production of nickel sulphate.
The IGO Process has a smaller carbon and environmental footprint compared with traditional methods for nickel sulphate production due to much lower emissions, power consumption and waste generation.
“It is pleasing to have brought these two workstreams to completion, and to have achieved the material improvement in commercial terms for our new offtake agreements,” Independence Group managing director and CEO Peter Bradford said in the company’s announcement to the Australian Securities Exchange.
“The tightening supply and strong demand forecast for nickel and copper has led to strong competition for Nova concentrate, which is now established as a high quality, highly desirable product for end users.
“The work we have completed as part of the nickel sulphate downstream prefeasibility study has demonstrated that IGO has developed an innovative processing technology to more efficiently produce nickel sulphate for the clean energy and the electric vehicle battery market at a lower cost and in an environmentally sustainable manner.
“We recognised that this project would have to compete with tightening supply and higher payabilities in the market and as a result of the improved nickel payabilities obtained, the returns on this project are unlikely to meet IGO investment hurdles for construction of such a facility in Western Australia, hence the decision not to advance this project beyond the pre-feasibility study.
“We remain committed to our strategy to focus on metals critical to clean energy.
“We will continue to explore partnering opportunities, leveraging the technology we have developed on downstream processing to create additional value for shareholders.”