LONDON, Aug. 4, 2022
/CNW/ -- Atlantic Nickel ("Atlantic Nickel" or the "Company") and
Appian Capital Advisory LLP ("Appian") are pleased to announce
record operating and financial performance in 1H22 at the Company's
Santa Rita nickel sulphide mine ("Santa Rita" or the "Mine")
located in Bahia, Brazil.
Santa Rita is one of the very few long-life nickel sulphide
mines in operation globally, boasting 35 years of mine life
producing between 20-35 ktpa NiEq contained in concentrate. Based
on an NI 43-101 technical report completed in 2021, the operation
mines an 8-year open pit with an NPV8 of US$570m, then transitions to 27-years of
underground sublevel caving operations with an NPV8 of US$812m. Capital expenditure over the first 5
years of the underground is US$332m
and expected to be fully funded out of operating cash flow.
Appian also owns Mineração Vale Verde ("MVV") and its Serrote
copper gold mine in Alagoas, Brazil ("Serrote"), which completed
construction ahead of schedule and under budget and achieved first
production in 2021.
Atlantic Nickel H1 2022 performance highlights
- Safety performance among the best in the industry with
LTIFR of 0.37 over the past 12 months
- Great Place to Work certification obtained in early
2022
- EBITDA for first half of 2022 at US$105m on US$213m
of revenue
- Santa Rita produced 57.6kdmt of nickel concentrate
containing 8.0kt of nickel, and 2.4kt of copper with cobalt, gold,
palladium and platinum by-products
- C1 cost performance of US$4.95/lb payable Ni net of by-products for the
period
- The Company remains debt free and well positioned for
further growth
Paulo Castellari, CEO of
Appian Capital Brazil, commented:
"I am delighted to report another record half for Atlantic
Nickel, building on our strong performance in 2021. Most
importantly, we have achieved this while maintaining our industry
leading safety and environmental record, with a strong focus on
employee welfare and one of the lowest carbon footprints in the
sector.
"The operational and financial results not only reflect the
quality of the asset, but also the hard work of the Atlantic Nickel
team, maintaining our robust C1 cost position against a backdrop of
global inflationary pressures and the ongoing impact of the
pandemic. Santa Rita is one of the leading nickel sulphide mines
globally and I am incredibly excited about its further potential
through the underground expansion."
Safety and the environment
During the first half of 2022, Santa Rita continued to operate
as one of the safest operations globally with a Lost Time Injury
Frequency Rate ("LTIFR") of 0.37 and a Total Recordable Injury
Frequency Rate ("TRIFR") of 1.67. More than 75,000 man-hours of
safety, health and environmental training were conducted in the
first half of 2022, contributing to the strong safety culture and
awareness on site at Santa Rita.
Safety and worker well-being continue to be a top priority for
Atlantic Nickel's management. At the end of June 2022, 100% of the workforce had received
COVID-19 booster vaccinations.
A survey conducted by Great Place to Work (GPTW) in early 2022
identified that 85% of the company's employees find Atlantic Nickel
an excellent place to work. This is the second time the company is
awarded with this certification.
Santa Rita maintained its leading environmental performance,
with its position among the lowest 10% carbon footprints in the
industry, with 85% of Brazil's
power generation from renewable or carbon neutral sources. The
company has invested over US$550k in
the construction of a new Center for Waste Treatment that will
provide a safe and environmentally responsible solution for 100% of
non-mineral residue produced by the mine.
Operational update
Record performance achieved in the first six months of 2022 in
several operating areas driven by continuous business improvements
and mining performance:
- 3.2Mt of ore was mined from the open pit in addition to 12.7Mt
of waste. Total mine movement increased 48% from same period in
2021
- 3.2Mt of ore fed to the mill in the period – a 6% increase
compared to the same period in 2021. Average feed grades of 0.32%
NiS and 0.10% Cu
- 57.6kt of concentrate was produced at average concentrate
grades of 13.9% Ni and 4.2% Cu with cobalt, gold, palladium and
platinum by-products
Santa Rita's C1 operating costs amounted to US$4.95/lb payable Ni net of by-products.
Atlantic Nickel has been able to control costs in a global
inflationary environment through the deployment of a number of
Business Improvement initiatives during the first six months of
2022.
Through the first half of 2022, approximately US$15m in value was captured through Business
Improvement initiatives. Most notably mining contract negotiations
have reduced the unit cost (US$/t mined) by 15% in an inflationary
environment.
Geotechnical update
Atlantic Nickel's 2021 performance update press release provided
an update on a geotechnical event comprising a small crack
affecting less than 1% of the total surface area of the open pit.
As of June 2022, the pushback
designed to remediate the area of the geotechnical event had been
mostly completed (85%) in line with the plan established by
Atlantic Nickel and evaluated by external consultants. The
remediation has been conducted safely, with dedicated daily radar
inspections and prism monitoring. Since the quarter ending
June 30 2022, the remediation work
has been 100% completed in line with the timeline originally
projected. There is no impact on open pit mine life and no expected
loss of ore within the open pit reserve.
Financial update
Five shipments were completed in the first half of 2022
containing 50kt of concentrate and 7.0kt of Nickel content. Total
revenues of US$213m were realized in
the period with EBITDA of US$105m. Strong financial performance was driven
by a combination of strong operating results and commodity price
performance. Moreover, Atlantic Nickel has locked in commodity
price hedges for nickel and copper at attractive levels to further
capitalize on strong commodity markets.
Drilling / Growth update
Atlantic Nickel continues the development of strategic studies
for the underground expansion at Santa Rita, with activities that
include:
- An extensive drilling campaign (step out and infill),
with 7 operating rigs and another 4 planned by Q3 2022
- Execution of outstanding technical studies required for
completion of the Pre-Feasibility Study ("PFS")
- Mobilization of a top-tier international engineering firm
to develop the mine design for sublevel caving mine
- Definition of a robust permitting strategy underway with
the support of renowned consultants
- Delivery of PFS on the underground extension in 1H23
Additionally, the company has advanced with an additional
drilling campaign and technical studies on its satellite
exploration asset Palestina. At Palestina, Atlantic Nickel has been
primarily focused on resources declaration. The project is located
25km from Santa Rita and will benefit from the existing Santa Rita
process plant. A pre-feasibility study for Palestina is planned in
1H23.
About Appian
Appian Capital Advisory LLP is the investment advisor to
long-term value focused private equity funds that invest solely in
mining and mining related companies.
Appian is a leading investment advisor in the metals and mining
industry, with global experience across South America, North
America, Australia and
Africa and a successful track
record of supporting companies to achieve their development
targets, with a global operating portfolio overseeing nearly 5,000
employees.
Appian has a global team of 54 experienced professionals with
offices in London, Toronto, Lima, Belo
Horizonte, Vancouver,
Montreal and Perth.
For more information, please visit
www.appiancapitaladvisory.com, or find us on LinkedIn, Instagram or
Twitter.
About Atlantic Nickel
Atlantic Nickel is the owner and operator of Santa Rita, an
open-pit nickel-copper-cobalt sulphide operation located in Bahia,
Brazil. Santa Rita is an operating
open pit mine that is planning to transition to underground mining
to extend its mine life to 34 years. The mine benefits from
US$1bn of prior investment and has a
plant capacity of 6.5 Mtpa. One of the largest open pit nickel
sulphide mines in the world, Santa Rita is a high-quality asset. It
is one of a few remaining nickel sulphide mines globally that can
offer additional supply towards the production of Class I nickel
products and so has exposure to the high-growth potential of the
electric vehicle industry.
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SOURCE Atlantic Nickel; Appian