- After-tax NPV8% of
$2.01 Billion and IRR of 18.6% at$8.75 /lb Ni - 29-year mine life producing an average 59,100 tonnes per year of nickel
- Phased development approach, with expansion following the 3.7-year after-tax payback period
- Life-of-mine ("LOM") average C1 operating cost of
$3.70 /lb Ni ($8,150 /t), assuming no byproduct credits - LOM average annual pre-tax free cash flow of
$578 million during operating years - Strategic product flexibility, with a Base Case high-grade nickel concentrate (60% nickel) for direct feed to the stainless steel industry, plus a Refinery Option to produce battery-grade nickel sulphate
"The PFS firmly establishes Baptiste as a key strategic asset in the development of
The Company's management will host a live webinar on
https://www.renmarkfinancial.com/events/renmark-virtual-non-deal-roadshow-tsx-v-fpx-otcqb-fpocf-2023-09-06-100000
The results of the PFS are summarized in a corporate presentation available on the homepage of the Company's website at www.fpxnickel.com.
The Base Case outlines an open-pit mining project in central
The Project will utilize a conventional processing flowsheet with SAG-mill based grinding followed by magnetic separation, froth flotation, and a flotation tailings leach circuit, as previously described in the Company's
The Project will be supplied with low-carbon power from the BC Hydro provincial electricity transmission grid, resulting in an estimated Scope 1 and 2 carbon intensity of 2.4 t CO2/t nickel produced, placing Baptiste within the lowest decile of global nickel production. The Project will be accessed by a road system consisting of upgrades and expansions to an existing forest service road ("FSR") network. All mine tailings and waste rock are proposed to be managed within a single integrated facility that will utilize open pit pre-stripping material and waste rock for embankment construction.
Base Case economics are presented in Table 1, based on a
Table 1 – Base Case Economics
Criteria | Units | Base Case | |
Initial Capital Cost | USD, millions | 2,182 | |
Operating Cost | $/t milled | 8.15 | |
C1 Operating Cost1 | USD /lb Ni | 3.70 | |
All-in Sustaining Cost ("AISC")2 | USD /lb Ni | 4.17 | |
After- Tax | NPV8% | USD, millions | 2,010 |
IRR | % | 18.6 | |
Payback Period | years | 3.7 | |
ratio | 7.8 | ||
NPV-to-Initial Capex | ratio | 0.92 | |
Annual Free Cash Flow, Pre-Tax3 | USD, millions | 578 |
Notes: | |
1. | Exclusive of any byproduct credits. |
2. | Inclusive of operating cost, sustaining capital, expansion capital, closure capital, and royalties. |
3. | For production years. |
The Refinery Option outlines an off-site refinery to upgrade a portion of nickel-in-concentrate to produce 40,000 tpa of battery-grade nickel sulphate for the electric vehicle battery supply chain, with the balance of concentrate continuing to be directly supplied to the stainless steel industry. Along with battery-grade nickel sulphate, this option also supports the valorization of cobalt and copper as refinery byproducts. The Refinery Option presents incremental capital expenditure of
The Baptiste deposit will be mined as a conventional large-scale truck and shovel operation with up to 60 Mt of material mined per year during Phase 1 and up to
The mineral resource estimate (effective
A summary of the PFS mine plan is presented in Table 2, followed by a chart of tonnage moved and average mill feed grade throughput for the envisioned mine life (Figure 1).
Table 2 – PFS Mine Plan Summary
Phase 1 | Phase 2 | Total | |
Operating Years | 1 to 9 | 10 to 29 | 29 years |
Head Grade, Average (% DTR Ni) | 0.135 | 0.128 | 0.130 |
Mill Throughput (tpd) | 108,000 | 162,000 | - |
Tonnes Milled, Total (Mt) | 345 | 1,143 | 1,488 |
Tonnes Waste, Total (Mt)1 | 141 | 697 | 838 |
Strip Ratio (waste:ore)1 | 0.41 | 0.61 | 0.56 |
Notes: | |
1. | Excludes capitalized pre-stripping. |
The Probable Mineral Reserves for the project are estimated at 1,488 Mt at an average grade of 0.13% DTR nickel (0.21% total nickel), resulting in 1,933 kt of contained DTR nickel metal (3,125 kt of total nickel metal) over the 29-year mine life. Included in waste material for the PFS are 44 Mt of inferred material at an average grade of 0.113% DTR nickel.
Table 3 – Baptiste Nickel Project Reserve Estimate
Category | Tonnes (Mt) | DTR (%) | Total (%) | Contained Metal (kt DTR nickel) | Contained Metal (kt total nickel) |
Proven | - | - | - | - | - |
Probable | 1,488 | 0.13 | 0.21 | 1,933 | 3,125 |
Proven & | 1,488 | 0.13 | 0.21 | 1,933 | 3,125 |
Notes: | |
1. | Mineral Reserves are reported effective |
2. | The Qualified Person for the estimate is Mr. |
3. | Mineral Reserves were developed in accordance with CIM Definition Standards (2014). |
4. | Mineral Reserves are reported using a fixed 0.06% DTR Ni cut-off grade, which represent approximately |
5. | The Mineral Reserves are supported by a mine plan, based on a pit design, guided by a Lerchs Grossmann (LG) pit shell. Inputs include |
6. | Life-of-mine strip ratio is 0.56 (W:O), excluding capitalized pre-stripping. |
7. | Ore and contained nickel tonnes are reported in metric units and grades are reported as percentages. |
8. | All figures are rounded to reflect the relative accuracy of the estimate. Totals may not sum due to rounding as required by reporting guidelines. |
The PFS metallurgical testwork program involved multiple bench- and pilot-scale campaigns (see FPX's
Table 4 – Life of Mine DTR Nickel Recovery
Recovery | DTR Nickel | |
By | Roughing Magnetic Separation | 95.0 |
Cleaning Magnetic Separation | 99.3 | |
Recleaning Magnetic Separation | 99.7 | |
Flotation | 87.4 | |
Flotation Tailings Treatment | 54.8 | |
Overall | To Awaruite Concentrate | 82.2 |
To Mixed Hydroxide Precipitate | 6.5 | |
Combined To Both Nickel Products | 88.7 |
The process plant will be developed in two phases, with the Phase 1 plant capable of processing 108,000 tpd of ore, and the Phase 2 expansion bringing total processing capacity to 162,000 tpd. Processing facilities utilize conventional unit operations and configurations in comminution, magnetic separation, flotation, and tailings leach.
In consideration of ore grindability, low abrasivity, and low power cost, comminution will consist of primary gyratory crushing, followed by semi-autogenous ("SAG") mill and ball mill grinding. Based on awaruite's intense magnetic response, a coarse primary grind of 250 mm allows approximately 84% of the fresh plant feed to be diverted directly to final tailings in the primary magnetic separation stage. Followed by two stages of regrind and cleaner magnetic separation, a further 12% of fresh plant feed is diverted to final tailings, resulting in a "magnetics only" concentrate consisting of awaruite and magnetite. This results in a flotation circuit which only needs to treat less than 5% of fresh plant feed.
Flotation utilizes well-defined conditions in conventional mechanical flotation cells. Roughing flotation followed by four stages of cleaning flotation produces a high-grade nickel concentrate (60% nickel) which is then dewatered, briquetted, and bagged for sale to market. Flotation tailings are subjected to mild atmospheric tank leaching conditions to recover nickel not recovered in flotation (approximately 6.5% of DTR nickel). Leach solution is purified and nickel is subsequently precipitated to a MHP product (containing 45% nickel) which is then dewatered and bagged for sale to market.
The proposed tailings facility design considers management of tailings and mine waste in a single integrated facility, utilizing open pit pre-stripping material and waste rock for dam construction. Deposition of waste rock and tailings is considered within the open pit in the final years of operations. The tailings facility will incorporate cross-valley dams and is situated in close proximity to the open pit, with gravity-flow of tailings for the first 6 years of operations, followed by the installation of a tailings pumping system in Year 7.
The conceptual site water management plan includes management of site contact water in the tailings facility with collection of runoff water downstream of all other Project infrastructure/disturbances. PFS water balance modelling indicates the site to be in an annual water deficit, requiring a modest allowance for freshwater makeup during operations, including for potable water requirements.
The Project considers a full suite of on-site infrastructure and ancillaries. Both the construction and operation phases will be supported by an on-site camp facility.
The Project will connect with BC Hydro's low-carbon grid, with multiple options having been validated through a formal BC Hydro study. The PFS considers a 230 kV connection to the Glenannan substation located to the south of the Project, with a line length of approximately 155 km. The current FSR network will suitably support the early stages of site construction. The current road network will be upgraded, including minor expansions, at the end of the first year of construction resulting in reduced travel times to site. No other off-site facilities are envisioned to be required for the Project.
The Gantt chart presented in Figure 3 summarizes the conceptual project development timeline. The critical path runs through the environmental assessment ("EA") and permitting process, with an anticipated EA decision in the first quarter of 2027. Approximately 9-12 months off the critical path are engineering studies, with key events including the feasibility study and front-end engineering and design ("FEED") ahead of the final investment decision ("FID"). Following a positive EA decision and permitting the project through 2027, the FID will approve the project to proceed with construction early works commencing in early 2028, followed by full construction and subsequent production of first nickel in the fourth quarter of 2030.
Initial capital costs have been estimated in alignment with AACE (
The total initial capital cost for the Project is estimated to be
Table 5 – Total Estimated Capital Costs
Capital | Category | Total (USD, millions) |
Initial Costs | Mining | 325 |
Process Plant | 730 | |
Tailings Facility | 115 | |
On-Site Infrastructure | 106 | |
Off-Site Infrastructure | 127 | |
Indirect Costs | 401 | |
Owner's Costs | 106 | |
Contingency | 272 | |
2,182 | ||
Sustaining Costs | Mine Equipment | 643 |
Tailings Facility | 421 | |
Indirect Costs | 20 | |
Contingency | 97 | |
1,181 | ||
Total Expansion Capital Costs | 763 | |
Total Closure Capital Costs | 284 | |
Total Capital Costs (life-of-mine) | 4,410 |
Total operating costs are estimated to average
Mine operating costs are estimated to average
The Project is subject to a 1% net smelter return ("NSR") which is payable on annual sales less transportation costs to market.
Table 6 – Life-Of-Mine Operating Cost and AISC
Category | Units | Phase 1 | Phase 2 | LOM |
Mining | $/t milled | 2.59 | 3.31 | 3.14 |
Processing | $/t milled | 3.75 | 3.59 | 3.63 |
G&A | $/t milled | 1.23 | 1.05 | 1.09 |
$/t milled | 0.31 | 0.29 | 0.29 | |
Total Cash Costs | $/t milled | 7.88 | 8.24 | 8.15 |
C1 Operating Cost1 | $/lb nickel produced | 3.48 | 3.76 | 3.70 |
AISC2 | $/lb nickel produced | 3.97 | 4.23 | 4.17 |
Notes: | |
1. | Exclusive of any byproduct credits. |
2. | Inclusive of operating cost, expansion capital, sustaining capital, royalties, and closure capital. |
At an assumed nickel price of
CRU, a leading provider of analysis and consulting in the mining, metals and fertilizer markets, prepared a market analysis report that looked at the global ferronickel ("FeNi") market and considered the applicability of the Baptiste FeNi briquette to stainless steel production and the strong comparability of the Baptiste FeNi briquette to standard FeNi. Based on an average of the last six years of published data from a leading western ferronickel producer, payability of 95% of the LME nickel price has been assumed for the Baptiste FeNi product.
Based on published market data, the payability for nickel content in MHP ranged from 70% to 90% of the LME nickel price over the 2020-22 period, with the low-end of that payability range coinciding with the period of extreme market volatility and elevated LME nickel prices in the first half of 2022. For the purposes of the PFS economic analysis, payability of 87% of the LME nickel price has been assumed for the Baptiste MHP product.
The PFS models provincial mining taxes in accordance with the British Columbia Mineral Tax Act, and combined provincial and federal income taxes. The PFS reflects the impact of the federal government's refundable critical minerals investment tax credit, announced in the 2023 Federal Budget, which is proposed to be equal to 30% of the capital cost of eligible property for the extraction and processing of certain critical minerals, including nickel. The PFS estimates total LOM taxes paid of
Table 7 – PFS Economics
Economic Basis/Result | Units | Base Case | |
USD/lb | 8.75 | ||
Payability, FeNi Briquette | % | 95 | |
Payability, MHP | % | 87 | |
Pre-Tax | NPV8% | USD, millions | 2,923 |
After-Tax | NPV8% | USD, millions | 2,010 |
IRR | % | 18.6 | |
Payback | years | 3.7 | |
Ratio | 7.8 | ||
NPV-to-Initial Capex | Ratio | 0.92 | |
Annual Free Cash Flow, Pre-Tax1 | USD, millions |
Notes: | |
1. | During operating years. |
Table 8 – NPV Sensitivity
After-tax NPV8% (USD, millions) | -20 % | -10 % | Base | +10 % | +20 % |
837 | 1,427 | 2,010 | 2,593 | 3,173 | |
Recovery | 837 | 1,427 | 2,593 | 3,173 | |
Initial Capital Cost | 2,217 | 2,114 | 1,907 | 1,803 | |
Operating Cost | 2,444 | 2,227 | 1,794 | 1,577 |
As seen in Table 8, the project is most and equally sensitive to nickel price and recovery; however, economics remain robust at levels below Base Case assumptions. In keeping with the long mine life, the Project is more sensitive to operating cost than initial capital cost.
To demonstrate Baptiste's strategic flexibility to also produce nickel and cobalt for the battery material supply chain, a Refinery Option was developed to be discrete from the Base Case, envisioning the operation of a standalone refinery in Central British Columbia. Located in an urban setting, the refinery would benefit from the infrastructure, services, and labour which would be available at an integrated battery material processing hub, such as those being developed in eastern
The refinery flowsheet has been optimized based on the results of FPX's hydrometallurgical testwork program (see FPX's
The refinery is sized to produce 40,000 tonnes per year of nickel contained in battery grade nickel sulphate. In addition, the refinery would produce approximately 700 tonnes per year of cobalt in MHP and 300 tonnes per year of copper in concentrate. For the Refinery Option, the balance of nickel produced at the Baptiste mine (over and above the 40,000 tonnes in nickel sulphate) would continue to be marketed as a FeNi product to the stainless steel industry.
Based on market data published by Asian Metal, the 2022 nickel sulphate price in
Initial capital costs for the Refinery Option have been estimated in alignment with AACE Class 5 standards. As seen in Table 9, the Refinery Option economics are comparable to the Base Case.
Table 9 – Refinery Option Economics
Economic Basis/Result | Units | Refinery Option Only | PFS Base Case + | |
Nickel Refinery Capacity | Tpa | 40,000 tpa of contained nickel in nickel sulphate | ||
Nickel Sulphate Premium | $/lb Ni | 1.00 | ||
USD/lb | 8.75 | |||
Cobalt Price | USD/lb | 15.00 | ||
Copper Price | USD/lb | 3.50 | ||
Initial Capital Cost | USD, millions | 448 | 2,629 | |
C1 Operating Cost1 | USD/ lb Ni | 0.79 | 3.89 | |
Payability, MHP | % LME price | 87 | 87 | |
After-Tax | NPV8% | USD, millions | 63 | 2,127 |
IRR | % | 9.9 | 17.7 | |
Payback | years | 7.5 | 3.9 |
Notes: | |
1. | Inclusive of cobalt and copper byproduct credits from refinery. |
The Baptiste area is located on the traditional territories of Tl'azt'en Nation and Binche Whut'en and within several Tl'azt'enne and Binche Whut'enne keyohs, a traditional governance system of the Dakelh people of the
FPX acknowledges the potential impacts of resource projects and the concerns that Indigenous communities may have for such activities occurring on their territories. The Company has been working collaboratively and meeting with local communities to understand key valued species and habitats in order to avoid and minimize impacts, and to identify significant mitigations and enhancements that have the potential to create long-term environmental benefits for the local area. The Company is committed to ensuring the Rights of Indigenous Peoples are respected, and is focused on working with Indigenous leadership to advance a modern mining project that is aligned with global sustainable development goals and that protects people and the environment. FPX looks forward to continuing to evaluate all aspects of the potential project, building on on-going geological and engineering studies, Indigenous-led cultural and environmental baseline studies, and continued early engagement with all potentially-affected communities.
FPX intends to file on SEDAR and the FPX website within 45 days of this news release the Technical Report for the PFS prepared in accordance with the requirements of NI 43-101, including a description of the updated Mineral Resource Estimate and the Mineral Reserve Estimate. For readers to fully understand the information in this news release, they should read the Technical Report in its entirety, including all qualifications, assumptions, exclusions, and risks that relate to the PFS. The Technical Report is intended to be read as a whole, and sections should not be read or relied upon out of context.
The Baptiste PFS included contribution from the parties listed in Table 10 ("PFS Contributors"), each of whom is a qualified person under NI 43-101.
Table 10 – PFS Contributors
PFS Contributor | Qualified Person | Scope of Responsibility |
Recovery methods, process plant, on- | ||
Off-site power | ||
Equity | Geology | |
Environmental, Permitting | ||
International Metallurgical & | Metallurgy | |
Knight Piésold Ltd. | Tailings, water management, & | |
Mineral resource estimate | ||
Off-site roads and bridges | ||
Mine design & mineral reserve |
Qualified Persons Murray, Voordouw, Reimer, Flynn, Mysak, and Garcia all visited the
The PFS contributors prepared or supervised the preparation of information that forms the basis of the PFS disclosure in this news release.
The Company's
Of the four targets in the
On behalf of
"Martin Turenne"
Certain of the statements made and information contained herein is considered "forward-looking information" within the meaning of applicable Canadian securities laws. These statements address future events and conditions and so involve inherent risks and uncertainties, as disclosed in the Company's periodic filings with Canadian securities regulators. Actual results could differ from those currently projected. The Company does not assume the obligation to update any forward-looking statement.
Neither the
SOURCE
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