What will IGO do re the MCR takeoever bid?, page-39

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SpikeCanonBooks

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14/04/23

18:22

Post #: 67283640
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Originally posted by Flippa01: ↑

Hi SCB

The BHP Kwinana Refinery produces LME grade Ni briquettes and powder as well as now 100Ktpa of Nickel Sulphate for precusor feed. So a little more refined than 7% Ni concentrate that Savannah produces.

The only reason material is sourced from IGO and WSA was because of the rundown in NI prices and Leinster was basically put into C&M (now up and running). BHP are currently doing what is called a debottlingnecking Project at Mt Keith to lift production with a new SAG mill being added with its own cyclone bank and works to floatation decks for added capacity. A lot (about half) of Mt Keith concentrate goes out via Esperance as concentrate with the other half getting blended with Kambalda and Leinster ore to raise FeMgO level (very important as the tap to release the slag can be dangerous to personnel if too low) to ensure a good tap at Kalgoorlie Smelter to produce Ni matte for Kwinana Refinery feed.

In conjunction with the Mt Keith expansion the Kalgoorlie Smelter is overdue for its 5 yearly rebuild which is going to now start next year. In this rebuild the furnace is getting a major upgrade so most of Mt Keith concentrate can be fed through instead of going O/S for refining.

Once these two upgrades are complete BHP will not have a need for IGO's concentrate anymore so they are left in a rock and a hard place of having to pay for shipping of all their concentrate through Esperance Port. MCR will likely be in the same boat after the 5 year deal is done with BHP's Honeymoon Well Mine (purchased as a tenement from Norilsk in 2020) supplying feed of
high grade Ni ore to Mt Keith by this time.

With BHP buying Oz Minerals and in the process picking up West Musgrave nickel Project they have more than enough Ni in WA with existing infrastructure. Wheras IGO Nova mine has LOM under a decade now so they or Twiggy would prob be the only ones interested unless Glencore would like to bolster their WA Ni Portfolio.

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Wow thanks Flippa, that explains a lot.

I obviously have not looked into Nickel West in any depth, but I should have assumed a business as well run as BHP would not be reliant on competitors resources long term.

Do you think it's likely PAN will be the subject of an offer (from IGO or otherwise) in the near future?

PAN Price at posting: 14.0¢ Sentiment: Buy Disclosure: Held
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What will IGO do re the MCR takeoever bid?, page-39

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