RE:BH Ni byproduct to reduce Au AISCpetersburggray,
I would agree that RNC would not start mining Ni in large scale until they secure a tolling? agreement with BHP, since that Ni concentrator is the nearest (compared for example Leinster some 300km up north, near Leonora). There are a couple of options:
- do the usual toliing agreement and pay cash for all the Ni concentrate.
- If convenient they may mine Ni with the gold and get Ni as a by-product. They could separate the ores and stockpile the Ni ore and try to work out some kind of a joint venture with BHP? and to give them a cut for the Ni concentrate (instead of paying tolling cost in hard cash).
Depending on the Ni price, currently about 7.5USD/lb, or 7.5 x 2.2 = 16.5 USD/kg = 16,500 USD/tonne, the AISC for Ni could be low. The Q2 2019 results show for a 3-month period they realized 4.07 USD/lb at an AISC of 1.64 USD/lb, or 2.43 USD/lb profit (60% profit, which is not bad).
Depending on the current price they can get for Ni concentrate, the profit could be evn higher, since the current 7.5USD/lb, or 7.5 x 2.2 = 16.5 USD/kg = 16,500 (Did not check the price for Ni concentrate, which should be lower than 7.5 USD/lb, but Ni and Ni concentrate prices have been on the rise above the $4 USD/lb level.
Let just assume that they could get 6.5 USD/lb for the concentrate and the AISC still in the same level, say 2.00 USD/lb, the profit = 6.5 -2 = 4.5 USD/lb ( or = 10 USD/kg = 10,000 USD/tonne. If they can mine 100,000 tonnes of Ni from BH @ 5% grade they would produce 5000 tonnes of Ni/yr, or have a profit of this by-product of 5,000 x 10,000 = 50M USD. = C$62M (please check my math, since the number looks big). This is a potential profit of the Ni by-product in one year on top of the Au production.
The above results could be scaled down to take care of the Ni grade. At 4% grade the profit would be C$50M...still not bad.
Currently, there are some pockets of Ni in the A-zone, another is on top of WF (at the Ultramafic /bassalt contact...drill results in Fig 4 of 16 Sept 2019 NR), and a potential large target toward the west (Fletcher zone, Fig 2 of same NR).
Stay tune for RNC mine plan.
GH11
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petersburggray wrote: I dont think market has discounted the fact that wothin 6 months BH will be producing3% to5% Ni ore very profitably which will drastically cut AISC on gold production since nickel will be credited as byproduct agsinst Au AISC. Unlike Black Swan for example which need 6 to 9 months to restart, Bets Hunt can produce nickel at drop of hat...because Ni and Au mineralization is right next to each other infrastructure put in to mine gold can also be used for mining nickel. Only thing holding up full scale nickel production at BH now is access to nearby BHP nickel concentrator...BHP is opening 3 new nickel mines near BH and just signed a tolling agreement with Mincor. To process up to 600ktpa of their nickel ore. Per recent BHP presentation BHP will deliver 1st nickel sulphide product to customers in battery market nlt end of 2q2020.