An independent scoping study on the Nico polymetallic deposit in the Northwest Territories is offering some holiday cheer to majority owner
Situated in the Mazenod Lake district, Nico hosts inferred resources of 128.6 million tonnes averaging 0.071% cobalt, 0.052% copper, 0.078% bismuth and 0.54 gram gold per tonne. This includes a measured and indicated resource of 88.6 million tonnes averaging 0.124% cobalt, 0.053% copper, 0.133% bismuth and 1.02 grams gold, within which a 33.4-million-tonne, higher-grade core grades 0.14% cobalt, 0.052% copper, 0.154% bismuth and 1.17 grams gold.
In carrying out the study, Kilborn SNC Lavalin looked at aspects such as flow-sheet designs, cost analyses, preliminary mining and site development options. The project’s economic viability was also investigated using three different production rates and metal prices of US$21.20 per lb. for cobalt, US76 cents per lb. for copper, US$3.45 per lb. for bismuth, and US$293.90 per oz. for gold.
The study concludes that the project’s optimum production rate is 10,000 tonnes per day (3.5 million tonnes annually), assuming access by a permanent road and a continuous power supply from the nearby Snare hydroelectric plant.
Capital costs are projected at $443 million, with the pre-tax internal rate-of-return (IRR) calculated at 26.8%. The pre-tax net present value (NPV) is $432.9 million at a 10% discount rate.
Because of the project’s sensitivity to cobalt prices, additional cash flow scenarios were considered. These showed that on a pre-tax basis a minimum price of US$12.50 per lb. (roughly the current price of cobalt) is necessary for the project’s NPV to be greater than zero and its IRR to be greater than 10%.
Mining would employ open-pit techniques, using bench heights of 10 metres and sloping angles of 45. Stripping ratios are projected at 2.7-to-1, though Fortune notes that steeper wall angles are possible, given the competent nature of the host rock.
Two processing options were considered: a bulk concentrate and bismuth concentrate. Both involve conventional milling and flotation stages, followed by acid pressure oxidation for cobalt extraction and cyanidation of the resulting residue for recovering gold into dor bars. The latter design requires selective flotation prior to oxidation to form a bismuth concentrate, followed by ferric chloride leaching and cementation on to iron.
Metal recoveries after flotation are 92% for cobalt, 86% for gold and 85% for bismuth. Using the bulk concentrate option, overall recovery rates ring in at 85.3% for cobalt and 80.8% for gold; the alternative method gives 82.7% for cobalt, 80.8% for gold and 41.2% for bismuth.
During the year, Fortune sank another 114 holes into the deposit, raising to 216 the total number of holes drilled to date. None of the new results, however, has been incorporated into the scoping study or into current resource estimates. Kilborn recommends that future programs involve an updated resource audit and block model, focusing on the high-grade core, as well as a metal pricing and marketing study.
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