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Lunnon Metals Limited (ASX: LM8) (the Company or Lunnon Metals) is pleased to announce the completion of the Preliminary Feasibility Study( PFS) and the initial Probable Ore Reserve for the Baker deposit of 612,000 tonnes at 2.86% Ni for 17,500 contained nickel tonnes1.
KEY POINTS
- Strong financial returns with low start-up capital requirements.
- Initial Probable Ore Reserve of 612kt averaging 2.86% Ni for 17.5kt contained nickel1.
- Indicated Mineral Resource converted 73% to Ore Reserve.
- Pre-tax and post-tax free cash flow generation of $196 million and $145 million.
- Pre-tax NPV8% of $164 million and 324% internal rate of return (IRR).
- Pre-production capex of $18.6 million, maximum cash drawdown of $26.4 million including working capital.
- A premium sulphide concentrate, averaging ~14.6% Ni, Fe:MgO ratio of ~18.8 and low arsenic of ~440ppm.
- Detailed offtake discussions can now commence for Baker’s high grade nickel sulphide ore.
- Significant upside potential from the initial base case outlined in the PFS:
- No Inferred Mineral Resources included in PFS
- Likely future extensions to Baker with the deposit remaining open down plunge
- Potential contribution from East Trough deposit (approx. 450m from Baker)
- Scale and synergies with Foster’s Mineral Resources.
The PFS confirms that the Baker Project is a commercially robust high-grade nickel sulphide orebody (2.86% Ni), with a modest pre-production capital cost ($18.6 million), located in a Tier 1 jurisdiction in the heart of Kambalda, Western Australia. The PFS also confirms that Baker will produce a premium nickel concentrate, the results of which now enable detailed offtake discussions for the Project. The PFS leaves significant future upside potential, with a depth of mining of less than 200m below surface and the deposit remaining open down plunge. Lunnon Metals will now continue further studies (including reviewing scale and synergy benefits with Foster’s Mineral Resources), as the Company looks to build on its initial Ore Reserve for the Kambalda Nickel Project, which comes less than two years since listing and 18 months after Baker’s discovery.
Key PFS Outcomes and Assumptions
A summary of the initial physical and financial evaluation of the Project is shown in Table A, with additional details provided in the PFS Executive Summary.
1 Refer to Section 7 of the Preliminary Feasibility Study – Executive Summary below for a full breakdown of the Ore Reserve.
Table A: Key Production and Financial Outcomes and Assumptions
Notes:
1: Life of Mine is calculated from first stope ore, being approximately four months into Project commencement.
2: C1 Cash Costs includes Operating Costs, including mining, processing (excluding penalties), surface haulage, G&A, less by-products, divided by ore tonnes for processing. Excludes pre-production and sustaining capital expenditure, rehabilitation cost and royalties.
3: Gross Revenue excludes deduction of penalties from revenue and excludes revenue credits to Pre-Production Capital. 4: Pre-Production Capital Expenditure is to first stope ore, not commercial production.
5: Total LOM Expenditure includes Operating Costs, Royalties, Sustaining Capital, Closure Costs and Pre-Production Capital.
It excludes any by-product or revenue credits.
6: Free Cash Flow is Gross Revenue (less penalties) minus Operating Costs, Capital Expenditure (pre-production and sustaining), Royalties, and Closure Costs.
7: Post-Tax includes an assumption of $30 million in accumulated tax losses to 31 March 2024 and 30% Corporate Tax Rate.
8: NPV is based on real cash flow forecasts and represents value as at projected start date of 1 April 2024.
9: Corporate Tax Rate may be less, with a tax rate of 25% if aggregated turnover is less than $50 million in any financial year.
Managing Director, Ed Ainscough, commenting said:
“Kambalda has been one of Australia’s most prolific nickel production centres for over 55 years. Despite this long history, the district is still a globally relevant nickel belt and remains an important strategic source of high-grade, premium quality nickel sulphides. Baker continues this proud Kambalda tradition and the Company is likewise proud to report the results for that deposit’s PFS and initial Ore Reserve. These impressive results come within two years of listing on the ASX and at a time when Kambalda is once again in the headlines, this time as a sought after key production centre driven by its many positive attributes including its high-grade, superior concentrate quality and consequent low energy and capital intensity to exploit.
I would like to thank the Lunnon Metals’ team who have worked to deliver these outcomes over the past two years. They more than anyone know that this is just the start, these are very much initial results, with plenty more to come from our growing Mineral Resource base already defined at Baker and Foster but also from the many exciting exploration programs across the rest of our portfolio. To have access to such high-quality tenure in the heart of Kambalda is truly amazing and sets the Company and its shareholders up for a bright future.”
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This article includes content from Lunnon Metals Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
IND Establishes HPQ Exploration Target at Pippingarra Project
Highlights
- IND’s recent RC drilling program informs a Maiden High Purity Quartz (HPQ) Exploration Target at the Pippingarra Quarry Project.
- Drilling is planned for the exploration target area and to test several quartz occurrences mapped across the wider Mining Lease area.
- IND plans to commence work on a HPQ Mineral Resource Estimate in parallel with metallurgical testwork being conducted by potential offtake partners and third-party mineral processing laboratories.
- A 300kg Pippingarra quartz sample crushed from existing quarry stockpiles sent to China in late 2023 produced a >GG.GG4% SiO2 end product following standard HPQ processing1.
- A further 24 tonne bulk sample comprising crushed quartz rock has been shipped to China for processing, metallurgical test work, and assessment by potential offtake partners.
Figure 1: IND Pippingarra Quarry Project location and infrastructure.
In October 2023, IND announced the agreement of binding terms2 with North West Quarries Pty Ltd (NWQ) for an exclusive option to acquire an 80% interest in the non-construction material mineral rights.
Jeff Sweet, Managing Director of Industrial Minerals, commented:
“Following on from one of our potential offtake partners in China achieving a processed High Purity Ǫuartz product grading >SS.SS4% SiO2, we are extremely positive about the potential to supply Pippingarra quartz into high-end quartz markets.
“The Pippingarra Exploration Target is limited to an area where IND completed RC drilling in late 2023, to the east of the existing open pit. There are several quartz outcrops mapped across the broader Mining Lease area that will also be drilled with the intention to include these untested HPǪ target opportunities in the upcoming Mineral Resource Estimate (MRE) for Pippingarra.
“Our motivation to commence work towards a MRE is to leverage our unique position of having an active mining operation at the Pippingarra Ǫuarry. We believe this will give potential offtake partners the confidence to enter into offtake agreements with IND, knowing that we can rapidly advance to be mine ready and have a suitable mine life to support long term supply needs.”
Maiden High Purity Quartz Exploration Target
Table 1: Pippingarra HPQ Exploration Target range.
The potential quantity and grade of the Exploration Target is conceptual in nature, and there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource. The Exploration Target has been prepared and reported in accordance with the 2012 edition of the JORC Code.
The Exploration Target is based upon the Reverse Circulation (RC) Drilling program completed by IND in December 2023. Drilling was conducted on a 50m x 50m spacing. From this, holes INRC003 – INRC009 recorded thicknesses of white crystalline quartz over widths from 12m to 20m as reported in the Table 2 below.
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This article includes content from Industrial Minerals Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Positive Findings from Newmont Ti Benchmarking Study
Highlights
- Titanium industry expert TZMI completes titanium benchmarking study on the Salazar Critical Minerals Project
- Study identifies Newmont as a standout from its peers in terms of Ti and TREO in-situ grade
- Benchmarking study is highly encouraging and supports validating flowsheet for production of titanium minerals from Salazar
Salazar Critical Minerals Project Ti Benchmarking Study
Following successful characterisation testwork of Ti mineralisation at the Newmont Deposit area1, West Cobar Metals engaged international titanium expert TZ Minerals International Pty Ltd (TZMI) to complete a benchmarking study of the Newmont resource.
TZMI is a global, independent consulting and publishing company which specialises in all aspects of the mineral sands, titanium dioxide and coatings industries2.
The Newmont resource3 and characterisation data was used by TZMI to benchmark the Salazar project deposit against several existing operations and potential new projects under development using publicly available information and TZMI estimates. The outcomes of the benchmarking are shown in Figure 1.
The benchmarking study shows that the Ti contained within the Newmont deposit has promising potential for economic extraction and that the Newmont resource is positioned favourably amongst peer resources in respect of both Ti and rare earth element content.
Figure 1 : Salazar Project (Newmont deposit) benchmarking
The relative positioning of the Newmont Inferred Ti and rare earth element resource is very positive for West Cobar, with relatively high insitu TiO2 grades and TREO grades compared to its peers. The Ti levels of the resource (on a whole rock basis) compare very favourably to both developing and operating projects.
TZMI concluded that “In terms of final ilmenite product quality, the composition of the magnetic fraction (comprising predominantly ilmenite) shows some promise with TiO₂ levels as high as 48.5%. This suggests the ilmenite is likely present as primary ilmenite … the CaO, MgO, V₂O₅, Cr₂O₃ in the magnetic fraction all seem relatively low which is positive and likely to be within the accepted levels for ilmenite used in sulfate pigment production.”
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This article includes content from West Cobar Metals Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
High Grade Copper Rock Chips to 18% on New Targets at Ti-Tree
- Two new prospects, Tiberius and Claudius, have returned high-grade copper and significant silver assays in rock chips from recent field work
- High grade assays up to 17.8% Cu and 282g/t Ag have been discovered on the Tiberius zone, currently 3m wide and extending for over 200m along strike.
- Claudius, 11km south of Tiberius, comprised of several parallel zones over a 100m by 300m area, returned grades up to 6.6% Cu and 86g/t Ag.
- The discovery of these prospects, 30km northwest from Copper Ridge which contain historic workings not marked on GSWA maps, highlights the significant prospectivity of the Gascoyne region.
- Further field work is being planned to determine the extent of these new discoveries.
Andrew Ford, GM Exploration
“These results highlight the potential of this underexplored area to host as yet undiscovered mineralisation. Less than 5% of the 3,600 sq km area of the Ti-Tree Project has had any previous exploration, and to discover unrecorded historic mining areas is very exciting. These results are a credit the Augustus geological team.”
Figure 1 Location of the Tiberius and Claudius prospects
Tiberius
Reconnaissance field work conducted on the Ti Tree Project’s northwestern tenement has discovered high grade copper and silver mineralisation (Figure 3) in two areas. Tiberius, the northern target comprises a quartz-sulphide vein system up to 3m wide and outcrops for over 200m (Figure 5).
A shallow shaft has been dug on the vein system (Figure 2). Another vein set was identified 600m along strike east-northeast of the main vein increasing the potential size of the target. The high grade veins contain both oxidized copper, high silver grades, lead sulphide and anomalous gold (Table 1).
Claudius
The Claudius prospect is located 10km to the southwest of Tiberius, comprised of quartz veined brecciated and silicified granite with mineralised veins mapped over a 100m x 300m area. The main area of outcropping mineralisation has been trenched by prospectors and rock chip sampling returned strong copper mineralisation in an iron rich siliceous vein. Silver was consistently elevated (up to 86g/t) with associated gold anomalism to 0.68g/t (Table 1, Figures 4 and 6).
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This article includes content from Augustus Minerals, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
From the Bronze Age to the Green Revolution: Mining's Timeless Role in Shaping Humanity's Future
During his presentation at the annual Prospectors & Developers Association of Canada convention, mining industry figure Mark Cutifani recounted the role the mining sector has had in humanity's past and will play in its burgeoning future.
“I'm focused on how we might catalyze new conversations around mining and its contribution to society,” he told listeners at the annual event, which took place in early March. “It is through our great pioneers and innovators that we continue to transform our work, and its value to society in so many different dimensions”
In simple terms, everything we use and make is derived from materials like metals and minerals, noted Cutifani.
Minerals used in electric cars compared to conventional cars.
Chart via the International Energy Agency.
In his view, while technical discussions about improving industry practices are essential, it's also crucial to help people understand the significance of the mining industry in the functioning of society as a whole.
For example, the average smartphone uses 13 metals and minerals, while electric vehicles require seven, including copper, lithium, nickel, manganese, cobalt, graphite, zinc and rare earths.
Mining's key role in the world's future
Cutifani went on to highlight how metals and minerals contribute to the health of our waterways and oceans.
“The provision of clean water is an absolute necessity to sustain life as we know it. We need minerals to purify, pump, use and recycle water. (We are) an industry that uses about 3 percent of the world's water to support everything else that happens on the planet. We are overwhelmingly a positive for global water balances,” he said.
In addition to water, the mining of phosphate and potash is imperative to global food supply, according to Cutifani, because without the valuable fertilizers they produce, “we could only feed half the planet.”
Even though there may be debates about eliminating certain products like fertilizers, he said it's essential to understand the broader implications and consequences of such decisions on global food security.
Beyond food security, metals and the alloys they produce have allowed us to curb urban sprawl through skyscrapers and high-rise residential towers that require steel and concrete, both of which are produced using mined and quarried materials. While we often hear of the vast amounts of metals needed for the energy transition, Cutifani noted that the energy transition debate tends to overlook other critical global issues like water, food security and shelter.
In his view, addressing global challenges will require the consideration of all fundamental human needs. It's essential to broaden the conversation and recognize the interconnectedness of various societal issues.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.