VANCOUVER, BC, Dec. 15, 2020 /CNW/ - FPX Nickel Corp.
(TSXV: FPX) ("FPX" or the "Company") is
pleased to provide a year-end review of the Company's
accomplishments in 2020 that provide a strong foundation for
increased activities in 2021.
Highlights
- Publication of a Preliminary Economic Assessment ("PEA")
for the Baptiste Project ("Baptiste" or the
"Project") at the Company's 100%-owned Decar Nickel District
in central British Columbia
showing robust economics:
-
- Mine life of 35 years and after-tax payback of 4.0 years
- After-tax net present value ("NPV") (8%) of US$1.72 billion and internal rate of return
("IRR") of 18.3%
- Average nickel production of 99 million lbs. per year
- Average C1 operating costs of US$2.74/lb nickel and all-in sustaining costs
("AISC") of US$3.12/lb
nickel
- Successful production of high-concentration nickel-cobalt
chemical solution, positioning FPX as a potentially significant
supplier of nickel and cobalt to the electric vehicle ("EV")
battery market
- Completion of field work designed to confirm the potential for
the development of a low- or zero-carbon mining operation at
Baptiste by establishing the carbon dioxide
("CO2") sequestration potential of Baptiste
tailings
- Fully financed for 2021 activities, including but not limited
to:
-
- Maiden drill program at the Decar Nickel District's Van target,
a large and highly prospective zone of outcropping bedrock located
6 kilometers north of the Baptiste Project
- Metallurgical test work to produce additional sample products
for the EV battery market
- Expansion of test work to evaluate CO2 sequestration
potential at Baptiste
Cautionary Statement: The PEA is preliminary in nature and
includes inferred mineral resources that are considered too
speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as mineral
reserves. Mineral resources are not mineral reserves and do
not have demonstrated economic viability. There is no
certainty that the conclusions or results as reported in the PEA
will be realized.
"We are highly encouraged by the impressive results of the PEA
and results of our other activities in 2020 that provide a solid
base for building significant shareholder value in 2021," commented
Martin Turenne, FPX's President and
CEO. "We are particularly eager to perform additional
metallurgical testing to further confirm the potential to produce
significant quantities of nickel and cobalt for the EV battery
markets. Further, a maiden drill program is planned for the
Van target, where extensive surface sampling has delineated a
target with a larger footprint and higher nickel grades at surface
than those at the Baptiste deposit. With detailed planning
underway on many additional fronts, we look forward to sharing
comprehensive details of our 2021 work programs in the new
year."
2021 Van Target Drilling
Assay results of outcropping bedrock samples revealed by
forestry activity have defined a promising drill-ready target at
the Van target, which is located 6 km north of the Baptiste Deposit
at similar elevations, and now accessible via logging roads.
These results demonstrate that the approximately 2.9 square
kilometre surface expression of the Van target is larger in area
and higher in Davis Tube Recoverable ("DTR") nickel than
those initially encountered at the Baptiste Deposit (see the
Company's January 15, 2018 news
release). A widely-spaced 10-hole, 3,000-metre maiden drill
campaign is planned to test the potential for Van to comprise a
standalone deposit to complement the Baptiste Deposit.
2021 Metallurgical Testing
In its January 7, 2020 news
release, the Company reported that successful leach testing of
high-grade Baptiste nickel concentrates confirmed nickel recoveries
up to 99.5% in producing a high-concentration nickel-cobalt
chemical solution suitable for the EV battery supply chain.
This testing established high-grade Baptiste nickel concentrate as
an excellent feedstock with potential advantages over sulphide and
laterite feedstocks in the ultimate production of nickel sulphate
and cobalt sulphate.
Additional metallurgical testing on approximately 2.5 tonnes of
assay reject material from Baptiste drill holes is planned for 2021
to evaluate grinding, flotation and other parameters for the
production of high-grade nickel concentrate. It is expected that
portions of the high-grade nickel concentrate will be utilized for
additional testwork comprised of leaching, purification and solvent
extraction to produce nickel sulphate and cobalt sulphate products
suitable for the EV battery market. Further details of the
metallurgical test program will be provided by the Company in the
first quarter of the 2021.
2021 Carbon Sequestration Activities
As noted in the Company's September 1,
2020 news release, researchers from the University of British Columbia, after several years
of lab testing, commenced the first-ever field tests designed to
measure the rate and amount of carbon capture from direct air
exposure for samples from the Baptiste Deposit under natural
conditions. This test work was completed on a representative
mineralized composite sample of approximately 300 kilograms of
assay reject material from drill holes, ground to the similar sizes
as the tailings at Baptiste as described in the PEA.
The test program was conducted in two stages. The first
stage comprised a field test in August at an outdoor location in
Prince George which approximated
the climactic conditions at the Decar Nickel District. The
second stage comprised an extended study conducted both outdoors
and in a laboratory in the Vancouver area in September and October.
The Company expects to report the preliminary findings of the
August field trial in the first quarter of 2021, and to report the
final findings of the entire 2020 test program (including both the
August field trial and subsequent field and lab testing from
September-October) by the second quarter of 2021.
The Company will expand the scope of carbon sequestration
testing in 2021, and expects to announce the details of those
planned activities in connection with the publication of the final
2020 field test results in the second quarter.
PEA Results
The Baptiste PEA (which was filed September 29, 2020 under the Company's SEDAR
profile) demonstrates the potential for establishing a greenfield
open-pit mine and an on-site magnetic separation and flotation
processing plant, using conventional technology and
equipment. At a throughput rate of 120,000 tonnes per day (or
43.8 million tonnes per year), annual production is projected to
average 99 million pounds nickel contained in ferronickel
briquettes grading 63% nickel at C1 operating costs of US$2.74 per pound of nickel. A summary of
the PEA highlights is provided in Table 1.
Table 1 – Baptiste Project PEA Results and Assumptions (all
in US$)
Results
|
Pre-tax NPV (8%
discount rate)
|
$2.93
billion
|
Pre-tax
IRR
|
22.5%
|
Payback period
(pre-tax)
|
3.5 years
|
After-tax NPV (8%
discount rate)
|
$1.72
billion
|
After-tax
IRR
|
18.3%
|
Payback period
(after-tax)
|
4.0 years
|
Net cash flows
(after-tax, undiscounted)
|
$8.73
billion
|
C1 operating costs
1
|
$2.74/lb
nickel
|
AISC costs
2
|
$3.12/lb
nickel
|
Assumptions
|
|
Processing
throughput
|
120,000 tonnes per
day
|
Mine life
|
35 years
|
Life-of-mine
stripping ratio (tonnes:tonnes)
|
0.40:1
|
Life-of-mine average
annual nickel production
|
99 million
lbs.
|
Nickel price
3
|
$7.75/lb
|
Baptiste product
payability (% of nickel price)
|
98%
|
Pre-production
capital expenditures
|
$1.67
billion
|
Sustaining capital
expenditures
|
$1.11
billion
|
Exchange
rate
|
0.76
US$/C$
|
1.
|
C1 operating costs
are the costs of mining, milling and concentrating, on-site
administration and general expenses, metal product treatment
charges, and freight and marketing costs less the net value of
by-product credits, if any. These are expressed on the basis of per
unit nickel content of the sold product.
|
2.
|
AISC of all-in
sustaining costs comprise the sum of C1 costs, sustaining capital,
royalties and closure expenses. These are expressed on the basis of
per unit nickel content of the sold product.
|
3.
|
Nickel price is
based on the average of six long-term analyst forecast
prices.
|
Dr. Peter Bradshaw, P. Eng.,
FPX's Qualified Person under NI 43-101, has reviewed and approved
the technical content of this news release.
About the Decar Nickel District
The Company's Decar Nickel District claims cover 245 square
kilometres of the Mount Sidney Williams ultramafic/ophiolite
complex, 90 km northwest of Fort St.
James in central British
Columbia. The District is a two-hour drive from Fort St. James on a high-speed logging
road.
Decar hosts a greenfield discovery of nickel mineralization in
the form of a naturally occurring nickel-iron alloy called
awaruite, which is amenable to bulk-tonnage, open-pit mining.
Awaruite mineralization has been identified in four target areas
within this ophiolite complex, being the Baptiste Deposit, the B
target, the Sid target and Van target, as confirmed by drilling in
the first three plus petrographic examination, electron probe
analyses and outcrop sampling on all four. Since 2010,
approximately US $24 million has been
spent on the exploration and development of Decar.
Of the four targets in the Decar Nickel District, the Baptiste
Deposit, which was initially the most accessible and had the
biggest known surface footprint, has been the main focus of diamond
drilling since 2010, with a total of 82 holes and over 31,000
metres of drilling completed. The Sid target was tested with
two holes in 2010 and the B target had a single hole drilled into
it in 2011; all three holes intersected nickel-iron alloy
mineralization over wide intervals with DTR nickel grades
comparable to the Baptiste Deposit. The Van target was not
drill-tested at that time as rock exposure was very poor prior to
logging activity by forestry companies.
As reported in the current NI 43-101 resource estimate, having
an effective date of September 9,
2020, the Baptiste Deposit contains 1.996 billion tonnes of
indicated resources at an average grade of 0.122% DTR nickel,
containing to 2.4 million tonnes of nickel, plus 593 million tonnes
of inferred resources with an average grade of 0.114% DTR nickel,
containing 0.7 million tonnes of nickel, both reported at a cut-off
grade of 0.06% DTR nickel. Mineral resources are not mineral
reserves and do not have demonstrated economic viability.
About FPX Nickel Corp.
FPX Nickel Corp. is focused on the exploration and development
of the Decar Nickel District, located in central British Columbia, and other occurrences of the
same unique style of naturally occurring nickel-iron alloy
mineralization known as awaruite. For more information, please view
the Company's website at www.fpxnickel.com or contact
Martin Turenne, President and CEO,
at (604) 681-8600 or ceo@fpxnickel.com.
On behalf of FPX Nickel Corp.
"Martin Turenne"
Martin Turenne, President, CEO and
Director
Forward-Looking Statements
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 TSX Venture Exchange nor its Regulation Services
Provider accepts responsibility for the adequacy or accuracy of
this release.
SOURCE FPX Nickel Corp.