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Latest Fisher East nickel project results demonstrate strong development potential

Published by , Assistant Editor
Global Mining Review,

Rox Resources Ltd (Rox) has reported the outcomes from an updated scoping study undertaken on the Fisher East nickel project, located 150 km northeast of Leinster (Western Australia).

The original scoping study was completed in 2015 and the recent update, undertaken on the back of the positive outlook for nickel, demonstrates a project with strong economic and technical credentials at a consensus projected forward nickel price. In addition, there is significant upside to project economics from an increased resource base. Capital costs are relatively low, with competitive cash operating costs. The high-level study considered two primary development scenarios, building a stand-alone concentrator or toll milling at a nearby operation.

Rox Managing Director, Ian Mulholland, said: “The improving nickel price outlook prompted us to reexamine the development prospects for Fisher East and the results demonstrate that we have a potentially robust nickel project both financially and technically.”

“The updated scoping study shows the project can deliver significant value to Rox shareholders under both a standalone concentrator option or taking advantage of nearby toll treating opportunities, such as Leinster. Developing a concentrator generates strong cashflow and competitive costs, while toll treating can be undertaken with significantly lower pre-production capital costs and only slightly higher operating costs.”

“Additions to the mineable resource inventory will only improve the project economics, as will the improving prospects for the nickel price which are related to increasing demand from electric vehicle batteries and declining LME nickel stockpiles. We have recently delineated depth extensions at the Camelwood and Musket deposits, and the Sabre resource is yet to be drilled out. These extensions are likely to lead to increases to mine life and enhance project economics.”

The updated scoping study is based on low-level technical and economic assessments, and is insufficient to support estimation of ore reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the updated Scoping Study will be realised. The updated scoping study and the production targets derived from the updated scoping study are preliminary in nature as the conclusions are drawn on Inferred Mineral Resources (12%) and Indicated Mineral Resources (88%).

The Indicated Mineral Resources and Inferred Mineral Resources underpinning the conclusions from the updated scoping study, including the production targets, have been prepared by a competent person in accordance with the requirements of JORC Code 2012 Edition. This announcement does not include an estimate of Ore Reserves as the supporting modifying factors have not been determined to a sufficient level of confidence. Some (12%) of the Mineral Resources used in the study are Inferred Mineral Resources.

When subset to the resources in the mining plan, there are only 4.2% Inferred Resources. There is a lower level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the predictions of expected costs or production rates contained herein, and the production targets themselves, will be realised.

At this stage, no toll milling agreement has been negotiated and there is no certainty that an acceptable toll milling agreement can be negotiated. The forward nickel price and exchange rate assumptions in this report are based on a careful consideration of market forecasts and consensus by a number of third parties. There is no guarantee that this nickel price or exchange rate will be realised.

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Australian mining news