Money dude. Here's my best stab at your pooh pooh of NICO lol, I am just an interested investor, who likes to crunch some numbers for fun. Don't get me wrong, Nico may come online for a variety of reasons, but it suffers tremendously from a purely financial standpoint. I'll leave you with a couple numbers, easily verifiable.
Nico - 33 million tons reserve @ 4.8 billion in revenue = 145 $/ton revenue This number is incorrect. The Feasibility Revenues average $200 million - and are now higher ~$220 million using commodity prices below spot prices. Margins are 50%, >100 million in EBIDA. Caribou mine probably losing money. NICO will produce metals for the new economy including batteries, eco metals and gold.
Caribou Zinc Mine (New Brunswick) - 4.5 million tons reserve @ 1.4 Billion in revenue = 307 $/ton mined in revenue Caribou mine is an underground mine whereas NICO is almost entirely open pit. A minor amount of the ore will be mined using underground mining during years 2-4 of the 20 year mine life to accelerate high margin ores (5g/t gold + Co + Bi + Cu) and revenues >$400/tonne. You are comparing apples to oranges on several counts.
1) what are the margins at Caribou. I expect they are skinny.
2) NICO is vertically integrated, so costs include refining all the way to saleable products whereas Caribou sells a concentrate and the costs for smelting are not shown. If you like to crunch numbers start with margins and also include costs in your analysis.
3) Then you should look into details eg. the low mass pull (4%) of NICO ores during flotation. This captures the recoverable metals in less than 4% of the mass of the ore, which means transportation costs to the refinery and the downstream processing happens on only 180 tonnes per day vs. the 4,650 tonne per day mill process rate AGAIN LOOK AT COSTS AND MARGINS.
Diavik Diamond mine = 400-600 $/ton revenue A great mine, but underground operation and very different cost structures and processing for diamond sorting with much higher costs that includes a supply chain that is in the middle of the NWT and large costs for constructing and maintaining coffer dams – not close to roads and power like NICO. Irrespective, Diavik is a great mine but is scheduled to close in about 3 years.
Caribou mine, located in an accessible location with easy access to power, is a marginal underground mine with an ore value of around 300 $/ton. This is almost double the average value of the Nico resource. Again, you are comparing an underground mine with high mining costs and smelting not costs not assessed and comparing this to an open pit pine with phenomenal flotation characteristics and the downstream processing included in a Co. owned vertically integrated refinery,
The size of the deposit is secondary to the concentration of metal. You can have a huge deposit that is still uneconomical to mine because you just have to move and process too much material. This is what Nico appears to be. Wrong! To have a successful mining operation, you need a good combination of margin and longevity to repay capital.
The reality is you just can't construct and operate run a mine in the NWT for a resource value of 145 $/ton process plant feed. Then why does the Feasibility Study done by a huge number of experts including Aker (now Worley) Micon, P&E, Golder Associates, SGS Canada and a slew of other metallurgists and engineering companies indicate a positive rate of return for NICO Eistein.
I'd be interested to hear a counteropinion on the ore value per ton, and how this is economical in the North
For what it's worth I had my mining buddies help me with this. I cannot take all the credit.
JIM