PM1 Mines and Money

PM1 featured on Mines and Money last week , final Investment decision has been brought forward to the middle of next year rather than towards the end of next year , Nickel and HPA demand expected to soar in the coming years . PFS in March , producing 26 000 Nickel Sulphate per annum , Colbalt 3000 tonnes and HPA 4000 .EBITA Base case$ 261 million per annum . They have several contractors working on the Pilot Plant and the target is to have the plant ready to process the bulk ore sample from New Caledonia by September this year . They have managed to fast track the project with final investment decision to be made by June next year , with a 12 month construction period they could be commissioning the project by July the year after . They are well funded and have received Government Funding. Market Cap around $ 8 million at the moment goes to show how important sentiment is as there are many mining related stocks no where near Final Investment decision some running on fumes with market caps much higher .

Pure Minerals Limited (ASXM1) owns 100% of Queensland Pacific Metals Pty Ltd, an emerging developer of battery chemicals nickel sulphate and cobalt sulphate.

PM1 recently released a positive Pre-Feasibility Study (PFS) assessing the development of a battery chemicals refinery, the Townsville Energy Chemicals Hub (TECH Project). The TECH Project will process high grade ore imported from New Caledonia to produce a nickel-cobalt hydroxide precipitate (MHP) using the DNi Process™ and the MHP will be refined to produce nickel sulphate, cobalt sulphate and other co-products.

The PFS highlighted the strong economic potential of the TECH Project, demonstrating the suitability and benefits of the DNi ProcessTM as an alternative and more environmentally friendly process, compared with traditional HPAL. The Company has identified additional opportunities for further project improvement and optimisation and value adding of the co products to produce high value products such high purity alumina. Future studies will investigate:
• Production of High Purity Alumina from aluminium hydroxide co-product;
• Upgrading the hematite product to enhance revenue
• Assessment of various process and infrastructure options to reduce capex
• Evaluation of alternatives for recovery of energy to reduce energy costs and overall operating costs
• Assessment of the use of process residue for earthworks and engineering applications;
• Recovery of scandium to produce scandium oxide
• Production of tailored nickel-cobalt-manganese (NCM) or nickel-cobalt-aluminium (NCA) precursor products for supply direct to battery manufacturers

Key financial metrics of the PFS include:
• Unit cost (net of co-products and sulphate premium) of USD 0.56/lb nickel
• Annual revenue of AUD 279M and EBITDA of AUD 124M per annum
• Pre-tax NPV of AUD 880M and IRR of 25.7%
• Post-tax NPV of AUD 568M and IRR of 20.1%
• Pre-production capital of costs of USD 300M + USD 49M contingency (AUD 441M + AUD 72M)

During construction, TECH could employ over 1,000 people and retain over 120 full time employees during operation, with commencement of construction proposed in 2021.

The Company will import high grade Ni-Co laterite ore (1.6% Ni / 0.017% Co) from New Caledonia under long term ore supply agreements for processing at TECH. The grade of this ore is significantly higher than Ni-Co laterite deposits in Australia, providing PM1 with a competitive advantage against its peers.

Pure Minerals is a processing Company – there is no mining risk. Its ore supply partners have been operating in New Caledonia for decades and are major exporters of nickel ore around the world. New Caledonia boasts the highest-grade nickel laterite in the region and has the world’s largest reserves of nickel.