Times have changed - Mining has changed. - Better Equiptment
- Larger Trucks
- Faster Crushing and Milling
- Ore Sorters
- Better extractions
- Higher recoveries
- Secondary mineral credits
- Spot minerals prices are higher
= Low grade Deposits come into play The Crawford Deposit ( EVNI's Peer ) north of Timmins, portrayed a mine plan with
nickel spot price of just - $17,000/usd per tonne
Current nickel spot prices $10.85 per pound / usd
x 2200 ( lbs in 1 tonne )
= $23,870 usd / tonne - - ( $32,463 cdn ) per tonne
Can Low-Grade Bulk Nickel Ever Be Profitable? Short Answer: Yes
The low-grade deposits realized long ago that there are much more valuable,
lower risk paths to market. Site operating costs – it's about scale and profit margins
Due to the smaller number, and generally lower profile of low-grade projects, there is generally a misunderstanding when it comes to operating costs, and in turn, what amount of revenue is required per tonne of ore for an attractive project – some people have posted that “$50 per tonne are unfeasible”. This would have left you out of the multi-billion takeover of Inmet (Cobre Panama project) by First Quantum, +$500M acquisitions of companies like Terrane (Mt. Milligan), Augusta (Rosemont) and several other large scale, low-grade copper projects during the prior decade.
By looking at those who already exist in the market, the outlook for operating costs becomes clear. Dumont, which is operating in the same area as Canada Nickel, is currently incurring just CAD$10 per tonne mined.
Other low-grade companies working in base metals such as Taseko’s (TSX: TKO) Gibraltar Mine,Teck Resources' (NYSE: TECK) Highland Valley Mine, or Centerra Gold’s (TSE: CG) Mount Milligan Mine, also have operating costs floating around the CAD$10 per tonne mark.
Not all of the nickel will be recoverable, particularly due to the silicate minerals that some of it is contained in. Canada Nickel estimates that of their higher-grade ore, 90% of the nickel is not in silicate minerals, and for the lower-grade 60% is not in silicates.
However, some of the nickel in silicate minerals is still recoverable.
With costs of CAD$10/tonne, it is then a question of how much revenue can be generated by processing a tonne of ore. Ultramafic nickel deposits always contain a certain amount of nickel that is not recoverable by standard milling flotation circuits, so recoveries are generally much lower than you would see for a low-grade copper or other deposits, so recoveries in the 40-50% range are typical and not a cause for concern.
We have been following the Crawford project so will refer to it as an example, so let’s do the math for that project.
Based on a nickel price of USD$17,000 per tonne, the higher-grade core containing 0.34% nickel at a 50% recovery rate, and average-grade containing 0.26% at a 40% recovery rate, combined with the 90% payability from the roasting process that Dumont's FS is using:
The higher-grade ore would deliver CAD$34 per tonne and the lower-grade ore would deliver CAD$23 per tonne.
Based on the CAD$10 operating costs, the higher-grade ore will result in an operating margin greater than 65% and the average grade operating margins in excess of 50%. For reference, Dumont’s cash costs in their feasibility study are USD$3.20/lb and has a AISC life of mine of USD$3.80/lb.
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https://www.cruxinvestor.com/articles/low-grade-bulk-nickel