Stage 1
Stage 2

 


Close Nickel Price US$/t
US$12,000/t
US$28,000/t
NPV8 post tax
IRR post tax
Free cash flow over LOM
(after capital payback)
Payback period
(after taxation)
Capital costs
*The above NPV Calculator is based on the Araguaia nickel project Feasibility Study, including Phase 2 expansion results published 43-101 report filed on SEDAR in December 2018.

Pt
 
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Developing the next major nickel project in Brazil

Economics

The FS base case financial model was developed using a flat nickel price of $14,000/t Ni. Two other cases were prepared; one using a market consensus price of US$16,800/t Ni and other used the Wood Mackenzie long term incentive forecast of US$26,450/t Ni. These two additional price forecasts represent upside scenarios.

The FS demonstrates robust economics for a 28 year mine, producing ~14,500 tonnes per annum nickel.

A discount rate of 8% was used for NPV calculations.

Project economics (post taxation)

Item Unit Nickel price basis (US$/t Ni)
Base
(14,000)
Consensus
(16,800)
Wood Mackenzie (26,450)
Net cash flow US$M 1,572 2,582 6,060
NPV8 US$M 401 740 1,906
IRR % 20.1 28.1 50.4
Breakeven (NPV8) Ni price US$/t 10,766 10,766 10,766
C1 Cost (Brook Hunt) US$/t 8,193 8,193 8,193
Production year payback years 4.2 3.3 1.8
LOM Ni recovered kt 426 426 426
LOM Fe recovered kt 995 995 995
Average Ni production at 0.9 Mt/a ore 1 kt/a 14.5 14.5 14.5
Average Fe production at 0.9 Mt/a ore kt/a 32 32 32
Total revenue US$M 5,970 7,164 11,449
Total costs US$M 3,811 3,995 4,657
Operating cash flow US$M 2,159 3,169 6,792
1 Average over initial 28 years of processing



Capital Cost Estimates

An initial capital cost of $US443 million is estimated for Araguaia.

Area name

Costs (US$‘000)

Mine

6,003

Ore Preparation

38,731

Pyrometallurgy

137,518

Materials Supply

21,413

Utilities and Infrastructure

106,918

Buildings

9,095

Indirects

82,409

Contingency

40,989

 Total

443,076
Summary of Capex


The capital cost estimate was built to an Association for the Advancement of Cost Engineering (AACE class 3) level which delivers an accuracy range between -10% and +15% of the final project cost (excluding contingency) with a base date of October 2018. All amounts expressed are in US dollars.

Araguaia C1 Costs

Tier 1 Project: Low Cost & High Grade
Araguaia positioned in the lower quartile for nickel laterite projects on global C1 (Brooke Hunt) Cash Cost



Araguaia C1 Costs

Operating Costs

The mining and operating cost estimate (opex) was calculated for an operation producing 14,749t Ni per annum and is set out as an annual total and US$/t Ni in Table below, calculated as an average over the LOM.

Description US$/t nickel
Process Plant  
Directs  
Power $2,410
Coal $1,620
Other directs $1,348
Labour $588
Subtotal – Direct costs $5,966
Indirects $772
Mining costs $1,584
Total costs $8,322
Summary of opex
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