Banking on Batteries, Western Areas Sets Out at Odysseus

Banking on Batteries, Western Areas Sets Out at Odysseus

Western Areas announced that its board has approved a decision to mine at the Cosmos Odysseus project in Western Australia, saying it is confident it will come online as demand for nickel increases.

Western Areas (ASX:WSA) announced that its board will go ahead with the Cosmos Odysseus nickel project after encouraging results from a recently completed definitive feasibility study.

The decision to mine should not come as a huge surprise; Western Areas went ahead with early works at the project in April, well before the definitive feasibility study was near completion, saying then that it was confident Odysseus would become its third operating mine and second production center.

Located near the Western Australian Goldfields community of Leonora, Cosmos is a mined-out open pit, while Odysseus refers to orebodies that will be accessed through underground mining operations.

In a Monday (October 22) release, Western Areas says the definitive feasibility study shows Odysseus will have a “robust 10-year operation producing 130,000 tonnes of contained nickel in concentrate.”

The company says that the definitive study “demonstrates a larger, longer life project with improved economics” over the prefeasibility study, and that Odysseus does not require any additional capital outlay for years, “therefore providing optionality arounds funding future commitments.”

It continues, “[w]ith first nickel concentrate scheduled for the December 2022 quarter, Odysseus will be one of the few nickel sulfide mines coming online just as forecast demand for class one nickel is expected to substantially increase in the electric vehicle sector.”

Western Areas says it is receiving significant interest in offtake agreements for Odysseus, though it has yet to enter into any agreements.

The economics of the Odysseus project are robust, says Western Areas, noting that it will have a short 3.5-year payback from production start, according to the definitive study. It will be a low-cost operation with a life-of-mine cash cost of AU$2.65 per pound with cobalt by-products.

The definitive feasibility study also gives the project breathing room, with a life-of-mine breakeven nickel price of AU$6.10 per pound (or US$4.58 per pound), while the current spot price is around AU$7.92 per pound (or US$5.64 per pound).

With the company betting on electric vehicle demand going up, it is clearly hoping there will be even more breathing room in the near to medium-term future.

The study envisages that Odysseus will produce an average of 13,000 tonnes of nickel annually, and over 14,000 tonnes per year between 2024 and 2031.

Dan Lougher, managing director of Western Areas, said the definitive feasibility study os a great result on “many fronts.” He added, “[t]he Odysseus Ore Reserve is now 164,500 tonnes of nickel, with the life of mine nickel concentrate production increasing by 42,700 tonnes to 130,100 tonnes compared to the pre-feasibility study.”

Additionally, Lougher said that capital expenditure for the project is minor for the next 12 to 24 months given the company can fund the works from its own cash reserves. “In fact, the major pre-production expenditure, totalling AU$162m, is not required until FY22 and FY23,” he noted.

Cosmos Odysseus was acquired from Glencore (LSE:GLEN) in 2015 for AU$24.5 million, and is located in the same region of Western Australia as major nickel-producing assets in BHP Billiton’s (ASX:BHP,NYSE:BHP,LSE:BLT) Nickel West portfolio, which is set for a major expansion.

On the ASX, Western Areas’ share value increased by 3.43 percent on Monday, closing at AU$2.41.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.

Lodgement of Codrus Minerals Limited IPO Prospectus

Key Highlights:

Codrus Minerals Limited has lodged its IPO Prospectus with ASIC to raise a minimum of $5,000,000 and a maximum of $8,000,000.
• PAC Partners Securities Ltd and Westar Capital Limited appointed as Joint Lead Managers.
• Priority offer to eligible Blackstone shareholders up to 10,000,000 shares.
• Shannan Bamforth, experienced Exploration Geologist appointed as Managing Director.
• Highly prospective Gold IPO with the spin-out of the Western Australian gold assets, including the Silver Swan South Project, Red Gate Project and the Middle Creek Project
• The Bull Run project in Oregon USA, consisting of 90 claims in Baker County in Eastern Oregon, prospective for gold and has been mined since 1929.
• Blackstone to be a substantial shareholder of Codrus.

Keep reading... Show less

Appointment of Codrus Managing Director

Blackstone Minerals Limited (“Blackstone” or the “Company”) is pleased to announce the appointment of Shannan Bamforth as Managing Director of Codrus Minerals Limited (“Codrus”), the spin out of its non-core gold assets announced earlier this year (Refer to ASX announcement from 15 January 2021)

Mr Bamforth is a geologist with over 20 years’ experience in the resources industry with a focus on base metals and gold. He has worked in exploration, operations and corporate roles in Australia, Africa, China, and Indonesia. Mr Bamforth comes to Codrus from Sandfire Resources where he has been working in the role of General Manager Geology since 2010. Prior to this role he held various senior positions with a variety of companies including Regent Pacific Group, St Barbara Mines, AngloGold Ashanti, and Acacia Resources. He is a member of The Australian Institute of Mining and Metallurgy.

Keep reading... Show less

Blackstone Minerals Quarterly Report for the Period Ending 31 March 2021

Ta Khoa Nickel – Copper – PGE Project

Upstream Business Unit (UBU)

Keep reading... Show less

Graphite Metallurgical Test Work Update


  • Bulk sample of Springdale graphite concentrate estimated to be completed in Q2 2021.
  • Concentrate material will then be sent to Germany to test its amenability for the production of battery anode material suitable for use in EVs.
  • Final test results expected in Q3 2021.

Comet Resources Ltd (ASX:CRL) is pleased provide an update on ongoing test work on natural flake graphite from its Springdale Graphite Project (Springdale) located in Western Australia. Both excellent grade and recoveries were achieved on initial tests, leading to commencement of work to produce a bulk sample for further testing. Importantly, the graphite concentrates previously produced demonstrated a unique and potentially very valuable characteristic in its small size distribution, with two-thirds of the product passing the 38 µm size fraction screen. Generally, this small size fraction of graphite is a by-product of processing of larger flake fractions, which produces smaller size graphite, but in doing so also damages the smaller flake material in the process, reducing their performance and value. Deposits that contain high quality ultra-fine graphite are uncommon and are potentially suitable for supplying the expanding battery anode market, which continues to grow as the sales of electric vehicles (EVs) increase. Graphite suitable for battery anode production also achieves premium pricing in graphite markets, making it a highly sought-after product.

Keep reading... Show less

Rio Tinto reaches agreement with Turquoise Hill Resources on financing plan for Oyu Tolgoi

Rio Tinto has entered into a binding Heads of Agreement (HoA) with Turquoise Hill Resources (TRQ) for an updated funding plan (the “Funding Plan”) for the completion of the Oyu Tolgoi (OT) Underground Project in Mongolia. The Funding Plan addresses the estimated remaining known funding requirement of approximately $2.3 billion 1 , building on and replacing the arrangements established in the Memorandum of Understanding that Rio Tinto and TRQ previously entered into on 9 September, 2020.

Under the HoA, subject to securing approval by OT LLC and any required support from the Government of Mongolia, and subject to timing, availability, and terms and conditions being acceptable to both parties, Rio Tinto and TRQ will:

Keep reading... Show less

Top News

Related News