Background on the study
FPX Nickel Corp. (TSXV:FPX) has commenced the development of an Awaruite Refinery Scoping Study in October 2024 to further demonstrate the economic and strategic opportunity to refine awaruite concentrates into battery-grade nickel sulphate and other valuable by-products. This study incorporates the company’s previously reported pilot-scale hydrometallurgical testwork results.
Scoping study overview
The company went into great detail on the study in a news release, outlining a mine-to-battery pathway for awaruite mineralization. At a mine site, awaruite mineralization can be subjected to a simple mineral processing flowsheet to produce a high-grade awaruite concentrate. This concentrate can then be marketed to either the stainless steel or EV battery supply chains. The study envisions purchasing such awaruite concentrate and refining it to battery-grade nickel sulphate, which would then be marketed to precursor cathode active material (PCAM) and cathode active material (CAM) producers for further processing into CAM, directly used in EV battery cell fabrication.
The study outlines a mid-stream refinery located in central British Columbia, capable of producing 32,000 tonnes per year of contained nickel in battery-grade nickel sulphate. In addition to nickel sulphate, the refinery will produce three by-products:
- 570 tonnes per year of contained cobalt in cobalt carbonate
- 240 tonnes per year of contained copper in copper cement
- 87,400 tonnes per year of ammonium sulphate, a valuable fertilizer product
The refinery would process commercially available awaruite concentrate. Published metallurgical testwork on awaruite (Ni3Fe) nickel ores has shown that a relatively simple mineral processing flowsheet utilizing magnetic separation followed by conventional froth flotation can produce a highly desirable awaruite concentrate. Considering other awaruite nickel projects in development by FPX and others, a refinery operation lifespan of 40 years is considered. The refinery’s operating costs, excluding byproduct credits ($1,598/t nickel contained), would fall within the lowest decile of global production. When byproduct credits are included, the refinery would have a lower production cost than any current global producer.
(Path of Awaruite Nickel Units from Mine to EV Battery (Source: FPX Nickel Corp.))
The refinery will be supplied with low-carbon power from the BC Hydro grid, resulting in a carbon intensity of 0.2 t CO2/tNi, significantly lower than current nickel sulphate production routes.
According to Benchmark’s database, the 2024 annualized nickel sulphate production market size was approximately 657,000 tonnes per year of contained nickel, with production heavily dominated by China at 76 per cent. Less than 1 per cent of current nickel sulphate production is North American (3,300 tonnes per year of contained nickel). The 32,000 tonnes per year of high-quality nickel sulphate produced by the refinery in Canada would represent an approximate tenfold increase in current North American nickel sulphate production.
Metallurgy and process design
(Current Nickel Sulphate Production by Region (Source: FPX Nickel Corp.)
The metallurgical testwork program involved multiple bench- and pilot-scale campaigns. The latest testwork campaign involved continuous pilot-scale testing of leaching unit operations and confirmed the leaching flowsheet. Nickel leach extractions greater than 99 per cent and production of low-impurity leach solution, suitable for downstream purification and crystallization, were simultaneously achieved during piloting. Bench-scale testing of solution purification and crystallization unit operations demonstrated the ability to produce battery-grade nickel sulphate crystals using the new ammonia-based flowsheet.
In the leaching area, awaruite concentrate is first subjected to an atmospheric leach, which serves the dual purpose of commencing awaruite dissolution and using awaruite as a reagent to neutralize free acid and precipitate remaining iron, aluminum, and chromium from the pressure leach solution. Any unleached awaruite is then further leached in a mild pressure oxidation circuit, where full awaruite dissolution is achieved in tandem with initial iron precipitation. Pressure leach solution then reports to the atmospheric leach circuit, and pressure leach residue is dewatered for disposal. A slipstream of pressure leach solution is processed in a copper removal circuit, where a copper cement grading approximately 70 to 80 per cent copper is produced.
The final leach solution, grading 100 g/l nickel, is first processed in a solvent extraction (SX) circuit to extract cobalt. Extracted cobalt is then precipitated from the cobalt-rich solution as a carbonate product grading approximately 50 per cent cobalt. While a cobalt carbonate product was selected for the study, FPX testwork has also demonstrated the ability to produce cobalt-rich mixed hydroxide precipitate (MHP).
Nickel is then extracted away from the cobalt-depleted leach solution to produce a purified and concentrated stream of nickel sulphate, which is then crystallized into battery-grade nickel sulphate crystals suitable for use in the EV supply chain.
The nickel-depleted leach solution is then treated to sequentially remove trace levels of nickel and magnesium. This purified stream is then crystallized into ammonium sulphate crystals, a widely used industrial fertilizer. Miscellaneous minor process streams are also processed in the ammonium sulphate crystallizer, enabling the refinery to operate as a zero liquid discharge facility.
Economic and environmental impact
Initial capital costs have been estimated in alignment with AACE (Association for the Advancement of Cost Engineering) Class 5 standards, while sustaining and closure capital costs have been estimated on an order-of-magnitude basis. The total initial capital cost for the project is estimated to be $424 million, with no expansion considered. Total sustaining capital cost is estimated to be $40 million, and total closure capital cost is estimated to be $42 million.
At an assumed nickel price of $8.50/lb ($18,738/t) and a USD:CAD exchange rate of 0.74, the refinery generates an after-tax NPV8 per cent of $500 million, an after-tax IRR of 19.0 per cent, and an after-tax payback of 4.5 years.
The refinery has been assumed in the study to be located in central B.C., with the selected location ultimately subject to community consultation, environmental characterization, and baseline studies. The BC Environmental Assessment Act Reviewable Projects Regulation specifies that a new non-ferrous metal refinery would require assessment under the established provincial EA process.
FPX Nickel’s President and CEO, Martin Turenne, went into more detail on this in an exclusive interview with The Market Online. Click the video below to watch the interview in full.
Investment corner
FPX Nickel Corp.’s Awaruite Refinery Scoping Study presents a compelling business case for the development of a standalone refinery to refine awaruite concentrate into battery-grade nickel sulphate for the EV industry, along with producing valuable cobalt, copper, and ammonium sulphate by-products. The study demonstrates the technical and commercial advantages of mining and concentrating awaruite ore to a high-grade awaruite concentrate, positioning FPX Nickel as a significant player in the North American EV battery supply chain.
Investors are encouraged to deepen their due diligence into FPX Nickel, as the company continues to advance its strategic initiatives and capitalize on the growing demand for battery-grade nickel sulphate and other critical minerals.
The company currently has a market capitalization of C$73.9 million and a share price of $0.23 – a good value compared with competitors with considerable upside.
To keep up with the latest developments, visit fpxnickel.com.
Join the discussion: Find out what everybody’s saying about this stock on the FPX Nickel Bullboard, and check out the rest of Stockhouse’s stock forums and message boards.
This is sponsored content issued on behalf of FPX Nickel Corp., please see full disclaimer here.