Nickel Mountain owns one of Northern Europe’s most potent nickel sulphide projects – the Rönnbäcken Nickel Project (RNP) in Northern Sweden. The Mineral Resource for the Project as a whole includes Measured and Indicated Mineral Resources of 668.3 Mt (97 % of the total Mineral Resources lies in Measured and Indicated categories).
Since 2007, Nickel Mountain has been working towards developing the RNP, situated in the Swedish Caledonian mountain range in north-western Sweden, about 25 km to the south of the village of Tärnaby, Storuman Municipality in Västerbotten County. The county is host to a number of Swedish mine operations. The Rönnbäcken nickel project comprises several exploration licences and exploitation concessions, which are 100% owned by Nickel Mountain. The Project comprises three low-grade, high-tonnage, nickel-sulphide deposits amenable to open pit mining: Vinberget, Rönnbäcknäset and Sundsberget. The shape and volume of the deposits make them suitable for high tonnage, low cost, open pit mining at a low strip ratio. Nickel Mountain’s objective is to establish a mine and concentrator producing 26,000 tonnes of nickel in a high grade nickel concentrate.
A preliminary economic assessment on RNP was completed in December 2011 by SRK Consulting (Sweden) AB.
The following is a summary of the findings of the preliminary economic assessment:
- Average annualized production of 26,000 tonnes of nickel and 730 tonnes of cobalt in concentrate based on an annual feed throughput of 30 million tonnes.
- Potential to produce over 1 million tonnes per year of a 66%+ magnetite iron ore concentrate byproduct.
- Life of Mine is 19 years with a potential to extend this following the delineation of further resources by ongoing exploration.
- Low stripping ratio of 0.72:1 (waste tonnes:ore tonnes).
- High grade sulphide concentrate with a 28% nickel content. High concentrate grade has been demonstrated through lab and minipilot tests by Outotec, as well as through full scale pilot work (4,000 tonnes) conducted by Boliden during the 1970s. Raglan was piloted at this same pilot plant.
- Estimated start-up capital cost of US$1,260 million, including working capital.
- Excellent infrastructure with close access to hydropower, power grid, roads, seaport and airport.
- Low sulphide content and presence of buffering minerals reduce risks of environmental impact.
Assuming a saleable magnetite concentrate:
- Average LOM mine gate operating cost of US$4.81/lb (US$10,604/t) of nickel recovered to concentrate
- Average LOM C1 cash operating cost of US$3.55/lb (US$7,826/t) of payable nickel net of by-product credits.
- Pre-tax net present value at a discount rate of 8% ranges from US$1,045 million to US$2,301 million between nickel prices of US$9.00/lb and US$12.00/lb generating an internal rate of return from 19.9% to 31.6% and an undiscounted cash flow range from US$3,467 million to US$6,264 million, respectively.
The Company’s exploitation concessions K nr 1, K nr 2 and K nr 3 for the Vinberget, Rönnbäcknäset and Sundsberget deposits have all been approved by the Swedish Government after appeal by the Vapsten Reindeer Husbandry collective. The Swedish Government’s decision has again been appealed by the Vapsten Reindeer Husbandry collective to the Supreme Administrative Court in Sweden.
At end of 2013 the Board of Directors approved of the 2014 work programme for the Company’s key nickel project in Rönnbäcken in Northern Sweden. The approved work program is part of the ongoing preparations to submit a Pre- Feasibility Study (PFS) in respect of the nickel project as well as to submit an application for an associated environmental permit to the Swedish Authorities.
While a 66% iron magnetite concentrate could be produced, a study by an external steel consultant during the fall of 2012 concluded that the occurrence of higher levels of nickel, chrome and zinc and the fine particle size of the magnetite concentrate product would not be attractive for carbon steel applications. The same steel consultant recommended that the Company considers conversion of the magnetite concentrate to direct reduced iron/hot briquetted iron for use as a scrap substitute or supplement in low alloy and stainless steel manufacture. There is a potential target market close by with a number of low alloy and stainless steel producers located in Sweden or within the European region. The same consultant pointed out that the magnetite concentrate would be potentially suitable as dense medium in Dense Media Separation (DMS) for coal processing applications. Initial test work has indicated that the magnetic properties and the size distribution of the concentrate would be acceptable. However, the market for DMS applications is limited.
Nickel Mountain is also assessing the possibility of producing ferronickel, a value-added product, from further processing of the Rönnbäcken nickel concentrate. An initial desktop study has indicated the possibility of producing either an intermediate calcine product for sale to ferronickel smelters, or a final ferronickel product for sale to stainless steel mills.
All of these product options are encouraging, however, the company needs to conduct further technical-economic studies which will be required later on to generate more detailed operating costs and capital expenditure estimates and to confirm the viability of such process routes.