All approvals in place = ready to sell products in advance (offtake)
Expected average feed grade 0.11% Co and 0.80 Ni
Ben replied:
A Mineral Resource is the size of the current deposit when you consider it to be a single ore body. In this case, when you look at the nickel and cobalt as a single zone. That means there are parts within this ore body zone that has high cobalt, for example, and lower cobalt. As a result we end up with a grade of less than 0.1% cobalt.
But you don’t mine an ore body as a single deposit. Instead, you put the waste to the side and only treat the mineralised ore. Thus you process the higher grade cobalt and nickel material and stock pile the lower grade dirt. As a result, the actual grade of the material you feed into the plant is much higher than the overall Mineral Resource grade.
BFS = a bigger plant + full output.
BFS(full output) is the key to beat CLQ Mcap.
Even 3 fold of PFS should take AUZ to 400M MCap+
If 4 fold, then 550M Mcap+
Metallurgy
You’ve gotta realize that what makes or breaks these projects isn’t grade or “Ni-Co” ratio’s – that’s marketing gimmick. All important is metallurgy which affects the processing route (i.e. HPAL vs atmospheric leach etc), which in turn greatly affects CAPEX and OPEX. Acid consumption and logistics are extremely important – won’t matter if you have a 1.5% Ni and 0.02% Co deposit if you have to truck acid in from 500km away
The extension of the Sconi ore body was successfully mined and processed by BHP for about 20 years. (The mine was called Greenvale).
So BHP spend about two decades refining the processing of the Sconi-equivalent mineralisation to a point where the processing of this ore has probably been optimised to within an inch of its life.
And also we have tried atmospheric leaching. Everyone has. It just doesn't work.
Take ardea's announcement of last week. If my memory serves correct, there expect to use 1 tonne of acid to treat one tonne of ore in a proposed atmospheric leaching operation.
Acid currently costs USD250 per tonne
If you assume a nickel grade of 1%, each tonne of ore would contain USD110 of nickel (I trust my maths is correct?)
So acid costs alone is more than double the value of the metal. Sure, they will recycle some acid but they still need to factor in mining costs etc.
That is why AUZ is going down the Pressure acid leach route. The capex is higher, but we can likely produce a pound of nickel for less than half the current market price. And if we can make money at times like this when the market price of nickel has been soft, just imagine how much we could make it nickel prices strengthen over the coming years as predicted.
Location
The Sconi project is less than 250km by road to the Townsville Port. Syerston and Flemington are about 400 kilometres to the nearest port. So from a logistics point of view Sconi is superior to most of the laterite nickel - cobalt projects in the market.
Free digging open pit Sconi ore
Investors in the pit mine profit in two ways. It is cheaper to operate an open pit mine because less manpower and equipment is required. Strip mining, or open pit mining is profitable sooner than a shaft mine because more ore can be extracted from an open pit mine and more quickly.
Space is not restricted in open pit mining. Trucks and mining machinery are free to move around as they need to. More machines can move more ore and haul off waste rock more quickly.
Ready to mine
AUZ have currently 9 seperate offtake agreement discussion partners
Demo plant
Samples are fully booked out for potential Offtake partners
Market cap and Mineral resource
* Andrea resources average ore location is 45m below surface + atmospheric leach = I dont think bank would lend them money as its too risky to develop their project + still early stage explorer
* PGM ? drilled to 50m below surface
+ still early stage explorer
Potential resource upside
Sconi = 10 fold + Flemington CLQ = only if they buy Flemington
Contact mgmt + industry experts and find your own answer instead of listening to traders.
Date: 09/10/17 Time: 21:15:34 Post #: 27775203 Start of thread
Current BFS is looking at
3 fold of PFS but we might see 4 ~6 fold of PFS due to an unprecedented high demand ( 9 offtake discussion partners = huge demand for Co, Ni sulphate)
Lets check the numbers again,
SCONI PFS(2013) results:
54,500 tonnes of Co metal x $60,000/ton= $3.27B
514,000 tonnes of Ni metal x $10,600/ton = $5.45B
3,000 tonnes of Sc oxide × $4M/ton = $12B
(* Good amount of DC will be applied to buyers due to a big supply from AUZ and CLQ imo, so I assuming 2M/ton = $6B)
So, we are sitting at around US $15B asset = Sconi alone = Mcap should be well over $1B imo.
And here comes another big thing = 5 new exploration licenses= 10 fold expansion targeting Co rich zones.
Thus, I believe we would see at lease double the current resource update next year with 5 new targeting areas = Sconi could be USD$30B asset.(+ price increase for Co,Ni is a bonus)
AUZ could be well over $1 Billion company
+ CLQ sister The Flemington
*Industry experts are predicting over 100,000/ton for Co and $30,000 for Ni metal prices by 2020 as all car makers will be producing massive amount of EVs in 2020 = massive batteries required.
But only AUZ and CLQ will be producing Co, Ni sulphates in 2020 from current Co hopefuls.
The most advanced Co, Ni sulphate producer = AUZ = ready to go with 10 fold potential + 9 offtake discussion partners.
5c by end of Nov 2017 imo
All IMO DYOR
AUZ Price at posting:
9.7¢ Sentiment: Buy Disclosure: Held
(20min delay)