nickel resource converted to gold equivelent

Quantifying ixr's resource to gold equivelent from nickel was an interest exercise but with nickel at lows it also gives scope to see that the growth is there for a more robust projection on profits


Nickel. Gold equivelent

Nkata Hil projected mine life 15 years

Medium 15,000 tonnes per
Producing 225,000 tonnes

Nickel price 17,000. t Reduce by factor of ten to match golds 1700oz
By reducing the price by a multiple of ten then increasing resource by a multiple of 10 to equal of gold would give ixr an equivelent of 2,225,000 oz recoverable with a 150,000 oz per year project.

Now the costs are $5 per pound 2200 pounds per ton. To make costs gold equivelent cost per ton are 12,000 so reduce by a factor 10 gives around 1200 per ounce cost.
Now I used a company called rdr who will have around 100,000 oz operation to get equivelent in grade and there grade is 1.8 gpt

So on the equivelent to a gold project
It would be a
2,22500 oz recoverable operation
With costs of 1200 per oz
And producing 150,000 per year
At 1.8 gpt
Profit of 75 mil before tax and royalties

Now the interesting thing I think they expect it maybe will creep up to 500,000 ni tons Jorc resource

So gold equivelent would be a 5 mil oz resource a and with the higher grade drilled it would increase the grade and profitability.
And to put in perspective 5 mil oz grade projects are world class.

The biggest factor comes in when they start talking about a million ton resource and the are not not many 10 mil oz gold mines getting found anymore.
When you compare the gold nickel equivelent I know there are a lot of variables but on a quick look it gave me a better understanding to why it could be a world class sulphide project. The shallow hits and the higher tenor grades being hit will certainly help lower costs and increase ni recovery also with so many new zones and present zones being extended and upgraded. It really made me understand why companies interested in nickel may look. Why I could on about how cheap it is, I won't as this was just an exercise in coming to grips and understanding how big is now and how big it could get as gold is one of easier metals to work out a snap shot and capex and profits. I also left out iron ore as most on here would be fully aware of it.