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Canada Nickel announces PEA results

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Global Mining Review,

Canada Nickel Company Inc has announced that the preliminary economic assessment (PEA) has confirmed robust economics showing an after-tax NPV8% of US$1.2 billion and an after-tax IRR of 16% from its wholly owned flagship Crawford Nickel Sulphide Project located in Timmins, Ontario, Canada. The PEA, prepared by Ausenco Engineering Canada Inc. in accordance with National Instrument 43-101 (NI 43-101), demonstrates the potential to develop a phased conventional nickel sulfide concentrator, producing nickel concentrates and magnetite concentrate. The operation is designed to have an opencast mine with a plant potential of 120 000 tpd.

The company is immediately advancing the project to a feasibility study, which is expected to be completed by mid 2022.

“We are focused on delivering the next generation of nickel and are pleased that this PEA demonstrates the robust economics of our flagship Crawford project. The PEA, utilising just a fraction of our resource potential, demonstrates that we expect to be one of the largest nickel sulfide operations globally, producing 1.9 billion lbs of nickel over a 25-year period with net cash costs of just over CAN$1/lb. Our current focus on the stainless steel market allows us to fully utilise the substantial by-product value for the contained iron and chrome, placing us on the lower end of the cost curve. I am very proud of our team for delivering these results in just over 20 months since our first drill holes and I look forward to continuing to unlock the district scale nickel potential of the Timmins region,” said Mark Selby, Chairman and CEO of Canada Nickel.

Selby added: “The PEA is a milestone that enables a whole range of key activities as we aggressively advance the project towards production by the middle part of the decade. We are immediately embarking on a feasibility study. We are calculating our carbon footprint and evaluating Crawford’s potential to deliver NetZero NickelTM, NetZero CobaltTM and NetZero IronTM. We are exploring opportunities to deliver the nickel in our concentrates into the electric vehicle (EV) market. We have begun our Environmental and Social Impact Assessment (ESIA), and we continue to work in partnership with Indigenous and local communities. We intend to implement an extensive and inclusive stakeholders’ consultation process that will allow us to identify and mitigate the project impacts in order to deliver sustainable benefits for multiple generations.”

Crawford 2021 PEA highlights

  • Robust economics.
    • After-tax, CAN$1.2 billion NPV8% and 16% IRR at long-term price assumptions.
  • Large scale, low cost, long-life.
    • Annual average nickel production of 75 million lbs (34 000 t) with peak period annual average of 93 million lbs (42 000 t).
    • Significant iron and chrome by-products of 860 000 tpy and 59 000 tpy, respectively.
    • Life-of-mine (LOM) net C1 cash cost of CAN$1.09/lb and net AISC of CAN$1.94/lb on a by-product basis (1Q21).
    • LOM production of 25 years with 842 000 t of nickel, 21 million t of iron and 1.5 million t of chrome valued at CAN$24 billion using long-term price assumptions.
  • Significant earnings and free cash flow generation.
    • Annual EBITDA of CAN$439 million and free cash flow of CAN$274 million.
  • Minimisation of carbon footprint.
    • Use of autonomous trolley trucks and electric shovels reduce diesel use by 40%.
    • Optimisation of the carbon sequestration potential of the tailings and waste rock.

The PEA is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorised as mineral reserves, and there is no certainty that the results of the PEA will be realised.

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