Updated Feasibility Study Delivers
$920 M NPV8%
RNC will host a call/webcast on
Friday, May 31 at 11:00 a.m. (Eastern Time) to discuss the
Feasibility Study. North American callers please dial:
1-888-231-8191, international callers please dial: (+1)
647-427-7450. For the webcast of this event click
[here] (replay access information
below).
(All amounts expressed in US dollars unless
otherwise indicated)
TORONTO, May 30, 2019 /CNW/ - RNC Minerals
("RNC") (TSX: RNX) in its capacity as Manager of the Dumont Joint
Venture (the "Joint Venture") with Arpent Inc., a subsidiary of
Waterton Precious Metals Fund II Cayman, LP and Waterton Mining
Parallel Fund Offshore Master, LP ("Waterton"), is pleased to
announce the positive results of an updated feasibility study
("feasibility study") for its Dumont Nickel-Cobalt Project
("Dumont").
"The achievement of this major milestone once again confirms the
robust economics of the Dumont Nickel-Cobalt Project. Once in
production, Dumont will be one of the largest base metal mines in
Canada, one of the top five
sulphide nickel producers globally, and one of the only large scale
fully permitted nickel-cobalt projects that can begin to satisfy
the significant growth in nickel and cobalt demand driven by the
electric vehicle sector." said Mark
Selby, President and CEO of RNC. "With the completion of
this positive feasibility study, RNC, with our partner Waterton, is
well positioned to accelerate discussions with potential partners
to advance the Dumont project towards construction."
Mr. Selby continued, "With the fully-permitted Dumont project
and the previously announced pending addition of the Higginsville
Gold Operation to our Beta Hunt gold mine in Australia, I believe RNC is very
well-positioned to deliver value to our shareholders."
Dumont 2019 Feasibility Study
Highlights1
- Large scale, low cost, long-life project
-
- Initial nickel production in concentrate of 33ktpa ramping
up to 50ktpa in Phase II expansion – production of approximately
1.2 million tonnes (2.6 billion pounds) of nickel in concentrate,
over a 30-year life with an initial capital expenditure of
$1.0 billion.
- Phase I C1 cash costs2 of
$2.98/lb ($6,570/t). Life-of-mine C1 cash
costs2 of $3.22/lb
($7,100/t Ni) and AISC of
$3.80/lb ($8,380/t) of payable nickel (low 2nd
quartile of cash cost curve)
- Significant earnings and free cash flow generation support
strong project economics
-
- $920 M after-tax
NPV8% and 15.4% after-tax internal rate of return
("IRR")
- Estimated annual EBITDA ramping up from $303 million in Phase I to $425 million in Phase II and averaging of
$340 million over the life of
project. Free cash flow averages $ 201
million annually over the 30-year project life
- Top tier mining asset in excellent
jurisdiction3
-
- 2nd largest nickel reserve in the world of 2.8
million tonnes (6.1 billion lbs) contained nickel and
9th largest cobalt reserve with 110 thousand tonnes (243
million lbs) contained cobalt
- Once in production, a top 5 nickel sulphide operation
globally, a top 3 Canadian base metal asset, and one of largest
battery metal development projects globally
- Fully permitted, construction ready project located in
Abitibi region in Quebec – one of
world's leading mining jurisdictions
- Impacts and Benefits Agreement successfully negotiated with
local First Nation
______________________
|
1 Based on
price and exchange rate assumptions contained in "Key Assumptions"
table found in the Economic Sensitivities section of this news
release. NPV and IRR calculated from assumed start of construction
and based on 2019 H1 real costs.
|
2 C1 cash
costs are defined as the cash cost incurred at each processing
stage, from mining through to recoverable nickel delivered to the
market, net of by-product credits
|
3 Reserve
comparison data sourced from company reports, Wood Mackenzie and
S&P Global Market Intelligence
|
Significant potential for additional value identified
- Implementation of autonomous truck fleet
- Larger-scale initial project phase of 75ktpd
- Sale of magnetite by-product
2019 Feasibility Study - Operating and Cost Summary
Production
|
Units
|
52.5 ktpd
Year 1-7
|
105 ktpd Pit
Year 8-19
|
Life-of-Mine
Year
1-30
|
Ore
Mined1
|
Mt
|
252
|
732
|
1,028
|
Expit Mining
Rate
|
Ktpd
|
259
|
298
|
224
|
Strip
Ratio1
|
Waste :
Ore
|
1.43
|
0.86
|
1.02
|
Ore Milled
|
Mt
|
122
|
477
|
1,028
|
Ore Grade
|
% Ni
|
0.33
|
0.28
|
0.27
|
Ni
Recovery
|
%
|
53%
|
47%
|
43%
|
Co
Recovery
|
%
|
45%
|
37%
|
33%
|
PGE
Recovery
|
%
|
65%
|
61%
|
62%
|
Nickel In
Concentrate
|
ktpa (M
lbs)
|
33 (73)
|
50 (111)
|
39 (87)
|
Cobalt In
Concentrate
|
ktpa (M
lbs)
|
0.9 (2)
|
1.5 (3.4)
|
1.2
(2.6)
|
PGM In
Concentrate
|
Koz pa
|
14
|
25
|
19
|
NSR
|
$/t ore
|
$27.00
|
$20.30
|
$17.75
|
Mine (ore
milled)
|
$/t ore
|
$5.33
|
$4.10
|
$2.86
|
Process
|
$/t ore
|
$3.98
|
$3.90
|
$3.90
|
G&A
|
$/t ore
|
$0.73
|
$0.40
|
$0.41
|
Total Site
Costs
|
$/t ore
|
$10.04
|
$8.40
|
$7.17
|
$/lb
|
$2.83
|
$3.14
|
$3.07
|
Realization
|
$/lb
|
$0.15
|
$0.16
|
$0.16
|
C1 Cash
Cost
|
$/lb
($/tonne)
|
$2.98
($6,566)
|
$3.30
($7,268)
|
$3.22
($7,109)
|
AISC
|
$/lb
($/tonne)
|
$4.19
($9,242)
|
$3.80
($8,369)
|
$3.80
($8,384)
|
1. Totals
include pre-stripping of 42 Mt, including 13 million tonnes of ore,
before mill production commences.
|
The break even NPV0 is $4.38 per pound of nickel. Break even
NPV8% is $5.86 per pound
of nickel.
Project Overview
Dumont will be an open pit mine/mill operation, using
conventional drilling and blasting, with loading by a combination
of hydraulic excavators and electric rope shovels into trucks
ranging in size from 45 – 290 tonnes. The process plant will be
constructed in two phases. Phase I will have an initial average
throughput of 52.5 ktpd using a single SAG mill and two ball mills
for grinding, desliming using cyclones, conventional flotation and
magnetic separation, to produce a nickel concentrate also
containing cobalt and PGEs. Phase II throughput will be doubled to
105 ktpd in Year 7 by mirroring the first line.
Location
Dumont is located in the western portion of the Abitibi region
in the province of Quebec. The
property is located, in the municipalities of Launay and Trécesson, approximately 25 km west
of the city of Amos, approximately
60 km northeast of the industrial and mining city of Rouyn-Noranda and 70 km northwest of the city
of Val-d'Or.
Dumont Mineral Resources (inclusive of mineral
reserves)
Mineral Resource Statement, Dumont Nickel Project,
Quebec, SRK Consulting
(Canada) Inc., May 30, 20191
Resource
Category
|
Quantity
|
Grade
|
Contained
Nickel
|
Contained
Cobalt
|
(000
t)
|
Ni
(%)
|
Co
(ppm)
|
(000
t)
|
(Mlbs)
|
(000
t)
|
(Mlbs)
|
Measured
|
372,100
|
0.28
|
112
|
1,050
|
2,310
|
40
|
92
|
Indicated
|
1,293,500
|
0.26
|
106
|
3,380
|
7,441
|
140
|
302
|
Measured +
Indicated
|
1,665,600
|
0.27
|
107
|
4,430
|
9,750
|
180
|
394
|
Inferred
|
499,800
|
0.26
|
101
|
1,300
|
2,862
|
50
|
112
|
Resource
Category
|
Quantity
|
Grade
|
Contained
Palladium
|
Contained
Platinum
|
(000
t)
|
Pd
(gpt)
|
Pt
(gpt)
|
(000's
ounces)
|
(000's
ounces)
|
Measured
|
372,100
|
0.024
|
0.011
|
|
288
|
|
126
|
Indicated
|
1,293,500
|
0.017
|
0.008
|
|
720
|
|
335
|
Measured +
Indicated
|
1,665,600
|
0.020
|
0.009
|
|
1,008
|
|
461
|
Inferred
|
499,800
|
0.014
|
0.006
|
|
220
|
|
92
|
Resource
Category
|
Quantity
|
Grade
|
Contained
Magnetite
|
|
|
(000
t)
|
Magnetite
(%)
|
(000
t)
|
(Mlbs)
|
|
|
Measured
|
-
|
-
|
-
|
-
|
|
|
Indicated
|
1,114,300
|
4.27
|
47,580
|
104,905
|
|
|
Measured +
Indicated
|
1,114,300
|
4.27
|
47,580
|
104,905
|
|
|
Inferred
|
832,000
|
4.02
|
33,430
|
73,702
|
|
|
|
1.
Reported at a cut-off grade of 0.15 percent nickel inside
conceptual pit shells optimized using nickel price of US$7.50 per
pound, average metallurgical and process recovery of 43 percent,
processing and G&A costs of US$4.33 per tonne milled, exchange
rate of C$1.00 equal US$0.77, overall pit slope of 42 degrees to 50
degrees depending on the sector, and a production rate of 105,000
tonnes per day. The qualified person considers that the conceptual
pit shells would not be materially different to that if current
(2019) conceptual pit optimization assumptions were considered. The
technical parameters would be unchanged and with the metal price in
Canadian dollars constant due to the decrease in US$ nickel price
assumption compensated by corresponding decrease in US$:CAD$
exchange rate, the qualified person considers the reporting cut-off
grade of 0.15 percent nickel to be reasonable. Values of
cobalt, palladium, platinum and magnetite are not considered in the
cut-off grade calculation as they are by-products of recovered
nickel. All figures are rounded to reflect the relative accuracy of
the estimates. Mineral resources are not mineral reserves and do
not have demonstrated economic viability. The Measured and
Indicated Mineral Resources are inclusive of those Mineral
Resources modified to produce Mineral Reserves.
|
|
|
|
|
|
|
|
|
|
|
|
|
Mineral Reserves
Mineral Reserve Statement, Dumont Nickel Project,
Quebec, Penswick, May 30, 20191
|
|
Grades
|
Contained
Metal
|
|
|
Ni
|
Co
|
Pd
|
Pt
|
Ni
|
Co
|
Pd
|
Pt
|
Category
|
000
t
|
(%
Ni)
|
(ppm)
|
(gpt)
|
(gpt)
|
Mlbs
|
Mlbs
|
000
oz
|
000
oz
|
Proven
|
163,140
|
0.33
|
114
|
0.031
|
0.013
|
1,174
|
41
|
162
|
67
|
Probable
|
864,908
|
0.26
|
106
|
0.017
|
0.008
|
4,908
|
202
|
466
|
220
|
Total
|
1,028,048
|
0.27
|
107
|
0.019
|
0.009
|
6,082
|
243
|
627
|
287
|
1.
|
*Reported at a
cut-off grade of 0.15% nickel inside an engineered pit design based
on a Lerchs-Grossmann (LG) optimized pit shell using a nickel price
of US$4.05 per pound, average metallurgical recovery of 43%,
marginal processing and G&A costs of US$4.10 per tonne milled,
long-term exchange rate of C$1.00 equal US$0.75, overall pit rock
slopes of 40° to 50° depending on the sector, and a production rate
of 105 kt/d. Mineral Reserves include mining losses of 0.33% and
dilution of 0.43% that will be incurred at the contact between
mineralization and waste. The Proven Reserves are based on Measured
Resources included within run-of-mine (ROM) mill feed. Probable
Reserves are based on Measured Resources included within stockpile
mill feed plus Indicated Resources included in both ROM and
stockpile mill feed. All figures are rounded to reflect the
relative accuracy of the estimates.
|
Mining
Approximately 42 million tonnes of overburden will be
pre-stripped prior to start-up of operations. The life-of-mine plan
excavates 2.1 billion tonnes of material, including 1.0 billion
tonnes of ore, over an open pit life of 24 years. A key element of
this plan is the de-coupling of mine production rates from that of
the plant. This allows for accelerated output of metal in the early
years from higher grade and recovery material, while lower grade
and recovery material is stockpiled. After open pit operations
cease in Year 24, 398 Mt of stockpiled ore will remain to support
continued production through Year 30. This strategy also allows
tailings produced from year 20 onwards to be impounded within the
mined-out pit, significantly reducing the size and associated cost
of the Tailings Storage Facility (TSF).
Inclusion of the trolley assist option is a major driver in
reducing greenhouse gas (GHG) emission, noise level, fleet size and
overall project environmental footprint.
A detailed production schedule can be accessed at the following
link.
Processing
The concentrator and associated infrastructure facilities will
process run-of-mine or stockpiled ore with a conventional milling
process consisting of a primary gyratory crusher, semi-autogenous
grinding (SAG) and ball mill, desliming, nickel flotation and
magnetic separation of the flotation tails. The nickel concentrate
will be thickened and filtered on site prior to shipment by truck
or rail to market.
The average nickel concentrate grade over the 30-year life of
the project is estimated to be 29%. This relatively high grade is
one of the important reasons why Dumont concentrate is suitable for
alternative paths to market, such as roasting, instead of
traditional smelting and refining, to feed the stainless steel
industry or conversion to nickel sulphate for the battery
market.
Infrastructure
The Dumont project is located adjacent to a rail line and
highway and a power line with sufficient capacity for the
construction period. A short 6 km rail spur will be built off the
rail line to provide access into the mine property and a 10 km
power line feed from an existing high voltage line south of the
property will be constructed to provide sufficient power for
operations.
Improvements Included in 2019 Feasibility Study
Through the update of the feasibility study, the project has
been de-risked technically with an updated mine design and
additional engineering work on tailings management and tailings
storage facility design. The project has also been de-risked
economically through more detailed work on capital and operating
cost estimates that built on the 2015 EPC work (See RNC Minerals
news release dated August 4,
2015).
"Throughout the process of optimising the feasibility study, RNC
has successfully improved project design to reduce risk and achieve
improvements in operational reliability," said CEO Mark Selby.
Highlights of these improvements include:
- Increase in the electrification of the mine by incorporating
trolley assist on the main ramps. This will reduce cycle times and
reduce diesel consumption by over 35% (approximate reduction of
450 M litres over the LOM). This
reduction of diesel consumption over the LOM will reduce GHG
emissions by 1.2 M tonnes of CO2
equivalent.
- Inclusion of concentrate roasting and conversion to ferronickel
as the route to market for the nickel concentrate. In 2014, based
on RNC's process, Tsingshan began construction of the first plant
to directly utilize nickel sulphide concentrate as part of the
stainless steel making process and has since built an additional
plant utilizing the roasted nickel concentrate process. In 2018 the
Dumont JV engaged CRU, a leading provider of analysis, prices and
consulting in the mining, metals and fertilizer markets, to conduct
a value-in-use study for roasted concentrate converted to
ferronickel. The CRU study looked at toll-processing in
Asia for a range of nickel
concentrates with nickel content ranging from 14% to 29% through to
a final ferronickel product. For the 29% nickel concentrate grade,
expected to be produced by Dumont, CRU estimated a payability of
94%. For purposes of the feasibility study update, a more
conservative payability of 91.5% was assumed (at the higher CRU
forecast, NPV8% would increase by $98m). With roasting, no payment will be realized
for the cobalt and PGMs contained in concentrate. At higher prices
for cobalt and/or PGMs, it will be more economic to treat the
concentrate via conventional smelting and refining or by alternate
processes to allow the nickel and cobalt to be utilized by the
battery industry. RNC continues to evaluate and discuss with
potential partners a range of market alternatives for concentrate
treatment.
- The mining footprint and production rates have been
significantly reduced during the pre-strip and initial 5 years of
operation. In addition, based on the recent experiences of large
Canadian open pits mining similar material, the decision has been
made to employ smaller, more maneuverable equipment for stripping
overburden and opening up the initial faces in bedrock. The higher
unit costs for smaller equipment will be offset by greater
certainty in their productivity, which will reduce the risk
associated with production and cost targets during the early years
of operation.
- The mining rate has been maintained at approximately twice the
milling capacity to accelerate delivery of the highest value ore to
the process plant. Lower value ore that is initially stockpiled
will be processed once the open pit is exhausted. In addition to
maximizing project value, this operating philosophy provides a
buffer to ensure there is adequate feed to keep the plant at
capacity during the early years of operation while the pit is
ramping up.
- Tailings Storage Facility (TSF) design improvements have
improved stability of the TSF and increased the capacity for carbon
dioxide sequestration. The revised mine design also reduces the
tonnage requiring impoundment in the TSF by 12%.
Capital Cost Estimate
Summary of Capital Costs1,2
($
millions)
|
Initial
Capital
|
Expansion
Capital
|
Sustaining
Capital
|
LOM
Capital
|
Mine
|
$223
|
$0
|
$450
|
$674
|
Process
Plant3
|
$346
|
$335
|
$48
|
$729
|
Tailings
|
$36
|
$23
|
$125
|
$185
|
Infrastructure
|
$206
|
$118
|
$0
|
$324
|
Indirect
Costs4
|
$123
|
$71
|
-$12
|
$182
|
Contingency5
|
$83
|
$53
|
$0
|
$137
|
Total
|
$1,018
|
$601
|
$611
|
$2,230
|
1.
|
Accuracy of capital
cost estimates are +/- 15%
|
2.
|
Totals may not add
due to rounding
|
3.
|
Infrastructure costs
for sustaining capital are included in process plant
costs
|
4.
|
Includes first fills
and the associated $12 million release in sustaining capital at the
end of the project life
|
5.
|
Contingency excludes
a growth allowance of 5.1% that has been included in the direct
capital costs of applicable elements. A total of $69 M of growth
allowance was included - $38M for initial capital and $31M for the
expansion
|
Operating Cost Estimate
Operating
Costs
|
$/t
ore
|
$CDN
t/ore
|
Labour
|
$1.09
|
$1.45
|
Consumables
|
$2.20
|
$2.93
|
Maintenance
|
$1.31
|
$1.75
|
Diesel
|
$0.79
|
$1.05
|
Electricity
|
$1.53
|
$2.04
|
Contracts &
Other
|
$0.24
|
$0.32
|
Total1
|
$7.17
|
$9.56
|
1. Totals may not add due to
rounding
|
Additional Upside Opportunities
The Joint Venture has identified a number of additional upside
opportunities that have the potential to add additional value to
the project but were not included as the base case of the
feasibility study as they have not as yet been advanced to a
feasibility level.
1) Autonomous Fleet Operation
(NPV8%: +$75 - +$115M)
As autonomous equipment has been employed in open pits for over
a decade and the global fleet currently approximates a combined 400
units of haul-trucks and blasthole drills, automation is rapidly
becoming proven technology. Accordingly, an industry expert Peck
Tech Consulting Ltd. (Peck Tech). were engaged to assess the
suitability of Dumont for automation. Based on Peck Tech's
pre-feasibility (PFS) level assessment, the implementation of an
Autonomous Haulage System (AHS) could reduce the peak truck fleet
by 20% and reduce site-wide AISC by over 3%. Further potential
could be achieved with an Autonomous Drilling System (ADS). RNC is
continuing discussions with various mining equipment suppliers to
understand the impacts and benefits in greater detail.
2) Alternate Development Scenario –
75ktpd Start-up (NPV8%: +$155 - +$210M)
In 2017, a trade-off study completed by Ausenco identified the
potential benefit of expanding the scope of operation at start-up.
In response to discussions with several battery market
participants, who expressed the desire for earlier access to larger
quantities of nickel, the concept has now been advanced to a PFS
level by Ausenco. The Alternate Scope utilizes a modified grinding
circuit to achieve initial production of 75 ktpd, with a modest
expansion in Year 6 to 100 ktpd. While the initial capital required
for the 75 ktpd Alternate Scope is approximately 20% higher than
that of the Base Case, the modified circuit leads to greater
capital efficiency over the life of project, reducing total capital
by approximately 5%. Further benefits of this scope include
accelerated nickel output of approximately 7% (measured by the
NPV8% of NSR) and a 33% reduction in the time required
to complete the expansion.
3) Iron Ore (Magnetite) Concentrate
– Potential By-product Credit (NPV8%: +$60 - +$100M
)
Dumont ore contains 44.9 Mt of magnetite (average grade 4.37%
magnetite). Test work completed for the 2013 feasibility study
indicated that recovery of 46% to a concentrate grading 63% iron
could be achieved. Life of Project magnetite concentrate production
could total 24 Mt, or approximately 0.8 Mt annually. The sale of
magnetite concentrate would have the added benefit of reducing the
tonnage impounded in the TSF by approximately 14 Mt. The current
valuation is based on inputs generated for a conceptual study
conducted in 2013 by Ausenco. Further testwork and market analysis
will be required before inclusion in the base case for the
project.
Project Development
The Joint Venture intends to continue to advance the project on
multiple fronts and has targeted the following key milestones:
- Completion of partnership arrangements to provide financing to
allow start of detailed engineering leading to 24-month
construction period
- Advance additional upside opportunities (discussed above) to
open other paths to market, specifically targeting the promising
future growth in the electric vehicle battery market
- Potential placement of long-lead orders driven by the project
schedule, market driven equipment lead times and financing
capacity; and
- Advancement of other project development activities as driven
by the project schedule and financing capacity
Feasibility Study Engineering
The feasibility study was completed by Ausenco, a global leader
in engineering and project management services for the resource and
energy sectors. Ausenco was chosen for the feasibility study
because of its expertise and experience with similar sized, large
scale base metal projects and proven experience with processing of
ultramafic nickel deposits. Ausenco has successfully designed and
constructed the Lumwana concentrator (55 ktpd) for Equinox
Minerals, the Phu Kham concentrator (33 ktpd) for PanAust and the
GDP3 expansion (30 ktpd concentrator) of the Gibraltar Mine for
Taseko and the $1.75 billion
Constancia project for Hudbay (80 ktpd concentrator). The
feasibility team included SRK Consulting (Canada) Inc. (resource model, geotechnical),
David Penswick (mine design and
financial modeling), WSP Global Inc. (environmental), Golder
Associates (environmental geochemistry), Wood PLC (tailings design,
site water balance and closure planning) and Norascon (civil and
earthworks).
Comparison Between 2013 and 2019 Feasibility Studies
The Dumont feasibility study delivered an improvement in
financial returns with IRR from 15.2% to 15.4% and a robust project
NPV8% of $920 million.
Initial capital was reduced by $173
million and the NPV8% was reduced by
approximately $217 million from the
2013 FS due to the following:
Comparison to 2013
Feasibility Study
|
NPV8%
|
Initial
Capital
|
IRR
%
|
2013 Feasibility
Study
|
$1,137
|
$1,191
|
15.2
|
Inflation / Royalties
/ IBA
|
-201
|
+147
|
|
Revised mine design
and schedule
|
-161
|
-50
|
|
Net Macro-economic –
Exchange rate, metal prices
|
-100
|
-270
|
|
Deferred Expansion
Date
|
-80
|
n/a
|
|
Trolley
Assist
|
+53
|
n/a
|
|
Concentrate
Roasting
|
+272
|
n/a
|
|
2019 Feasibility
Study
|
$920
|
1,018
|
15.4
|
Economic Summary Comparison
|
|
|
|
|
Units
|
Feasibility
Study
May 30, 20191
|
Feasibility
Study
Jun. 17,
20132
|
Ore
Mined
|
Mt
|
1,028
|
1,179
|
Strip
Ratio
|
Waste:Ore
|
1.02
|
1.13
|
Nickel
Recovery
|
% nickel
|
43
|
43
|
Project
Life
|
Years
|
30
|
33
|
Ni in
Concentrate
|
Kt (Mlbs)
|
1,191
|
(2,625)
|
1,353
|
(2,982)
|
Co in
Concentrate
|
Kt (Mlbs)
|
36
|
(79)
|
53
|
(117)
|
PGEs in
Concentrate
|
Koz
|
569
|
639
|
Total C1
Costs
|
$/lb Ni ($/t
Ni)
|
$3.22
|
($7,099)
|
$4.79
|
($10,560)
|
By-product
Credits
|
$/lb Ni ($/t
Ni)
|
$0.00
|
|
$0.48
|
($1,058)
|
Net C1
Costs
|
$/lb Ni ($/t
Ni)
|
$3.22
|
($7,099)
|
$4.31
|
($9,502)
|
Average
EBITDA
|
$M pa
|
$340
|
$381
|
Free Cash
Flow3
|
$M pa
|
$201
|
$228
|
Initial
Capital
|
$B
|
$1.0
|
$1.2
|
Total
Capital
|
$B
|
$2.2
|
$2.8
|
Pre-Tax
NPV8%
|
$M
|
$1,713
|
$2,003
|
Pre-Tax
IRR
|
|
19.9%
|
18.7%
|
Post-Tax
NPV8% 4
|
$M
|
$920
|
$1,137
|
C$M
|
$1,226
|
$1,330
|
Post-Tax
IRR
|
|
15.4%
|
15.2%
|
1.
|
Based on price and
exchange rate assumptions contained in "key assumptions" in the
Economic Sensitivities section of this news release.
|
2.
|
Based on price and
exchange rate assumptions contained in Dumont Ni Project 43-101
filed on Sedar Oct 25, 2013
|
3.
|
Free Cash flow
calculated based on start of production and excludes initial
capital costs.
|
4.
|
The 2019 NPV includes
an approximate $8 million benefit derived from the assumed leasing
of the mining fleet.
|
Economic Sensitivities
Key Assumptions1
Parameter
|
Pricing
|
Nickel Price ($ per
pound)
|
$7.75
|
US$/CDN$ exchange
rate
|
$0.75
|
Platinum Price ($ per
ounce)
|
$1,000
|
Palladium Price ($
per ounce)
|
$1,000
|
Cobalt Price ($ per
lb)
|
$25
|
Oil ($ per
barrel)
|
$60
|
1. Price assumptions for nickel based
on average forecasts for group of two third-party nickel industry
analysts. Price assumptions for cobalt, platinum and palladium were
rounded down based on Consensus Economics Inc. forecasts
|
Sensitivity
|
Delta
NPV8% ($
millions)
|
Delta C1 Cash Cost
($/lb)
|
Delta
IRR%
|
|
+
|
-
|
+
|
-
|
+
|
-
|
Nickel Price
±$1/lb
|
$436
|
-$477
|
$0.00
|
$0.00
|
3.2%
|
-3.7%
|
Nickel Price ±10%
($6.98 – $8.28/lb)
|
$336
|
-$368
|
$0.00
|
$0.00
|
2.5%
|
-2.9%
|
Oil Price
±$10/bbl
|
-$10
|
$10
|
$0.02
|
-$0.02
|
-0.1%
|
0.1%
|
Sulfuric Acid Price
±10%
|
-$6
|
$6
|
$0.01
|
-$0.01
|
0.0%
|
0.0%
|
Initial Capital
Expenditure ±10%
|
-$55
|
$52
|
$0.00
|
$0.00
|
-0.8%
|
0.9%
|
Expansion Capital
Expenditure ±10%
|
-$20
|
$20
|
$0.00
|
$0.00
|
-0.2%
|
0.2%
|
Site Operating Costs
±10%
|
-$150
|
$143
|
$0.31
|
-$0.31
|
-1.1%
|
1.1%
|
US$/CDN$ ±$0.05 (0.7
to 0.8)
|
-$154
|
$146
|
$0.19
|
-$0.19
|
-1.5%
|
1.5%
|
Mill Recovery ±1.0%
(42% to 44%)
|
$81
|
-$82
|
-$0.07
|
$0.07
|
0.6%
|
-0.6%
|
Realization ±1%
(90.5% to 92.5%)
|
$39
|
-$39
|
-$0.03
|
$0.04
|
0.3%
|
-0.3%
|
NI 43-101 Compliance
The technical information in this news release has been prepared
in accordance with Canadian regulatory requirements by, or under
the supervision of, Paul Staples,
P.Eng., of Ausenco, Chelsey Protulipac
P.Geo., of SRK Consulting (Canada) Inc., Vu
Tran, P.Eng. of Wood PLC and David P. Penswick, Eng., all of
whom are independent Qualified Persons as set out in National
Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI
43-101").
The Mineral Resource estimate set out in this news release was
classified according to the CIM Definition Standards for Mineral
Resources and Mineral Reserves (November
2010) by Chelsey Protulipac
P.Geo., of SRK Consulting (Canada) Inc.
The Mineral Reserve estimate set out in this news release was
classified according to the CIM Definition Standards for Mineral
Resources and Mineral Reserves (November
2010) by David Penswick,
P.Eng.
Readers are advised that Mineral Resources not included in
Mineral Reserves do not demonstrate economic viability. Mineral
Resource estimates do not account for mineability, selectivity,
mining loss and dilution. These Mineral Resource estimates include
Inferred Mineral Resources that are normally considered too
speculative geologically to have economic considerations applied to
them that would enable them to be categorized as mineral reserves.
There is no certainty that Inferred Mineral Resources will be
converted to Measured and Indicated categories through further
drilling, or into Mineral Reserves, once economic considerations
are applied.
Based on the resource estimate, a standard methodology for pit
limit analysis, mining sequence and cut-off grade optimization,
including application of mining dilution, process recovery,
economic criteria and physical mine and plant operating constraints
has been followed to design the open pit mine and to determine the
mineral reserve estimate for the deposit as summarized in the
Mineral Reserve table.
The full feasibility study, prepared as an NI 43-101 compliant
technical report, will be filed under RNC's profile on SEDAR at
www.sedar.com within 45 days.
Conference Call
RNC will be hosting a conference call and webcast tomorrow
(May 31) beginning at 11:00 a.m. (Eastern time).
Live Conference Call and Webcast Access Information:
North American callers please dial: 1-888-231-8191
Local and international callers please dial: 647-427-7450
A live webcast of the call will be available through Cision's
website at:
http://cnw.en.mediaroom.com/events.
A recording of the conference call will be available for replay
for a one week period beginning at approximately 2:00 p.m. (Eastern Time) on May 31, 2019, and can be accessed as follows:
North American callers please dial: 1-855-859-2056; Pass Code:
1696308
Local and international callers please dial: 416-849-0833; Pass
Code: 1696308
About RNC Minerals
RNC has a 100% interest in the producing Beta Hunt gold mine
located in Western Australia where
a significant high grade gold discovery - "Father's Day Vein" - was
made. RNC is currently completing a 40,000 metre drill program, the
results of which will be incorporated into an updated NI 43-101
compliant Mineral Resource Estimate and mine plan targeted for Q2
2019. Beta Hunt gold resource potential is underpinned by multiple
gold shears with gold intersections across a 4 km strike length
which remain open in multiple directions adjacent to an existing 5
km ramp network. RNC also has a 28% interest in a nickel joint
venture that owns the Dumont Nickel-Cobalt Project located in the
Abitibi region of Quebec which
contains the second largest nickel reserve and ninth largest cobalt
reserve in the world. RNC owns a 27% interest in Orford Mining
Corporation, a mineral explorer focused on highly prospective and
underexplored areas of Northern
Quebec. RNC has a strong management team and Board with over
100 years of mining experience. RNC's common shares trade on the
TSX under the symbol RNX. RNC shares also trade on the OTCQX market
under the symbol RNKLF.
Cautionary Statement Concerning Forward-Looking
Statements
This news release contains
"forward-looking information" including without limitation
statements relating to mineral reserve estimates, mineral resource
estimates, realization of mineral reserve and resource estimates,
capital and operating cost estimates, project and life of mine
estimates, construction of the mine and related infrastructure, the
timing and amount of future production, costs of production,
success of mining operations, ability to obtain permitting by the
time targeted, size and ranking of project upon achieving
production, economic return estimates and potential upside and
alternatives. Readers should not place undue reliance on
forward-looking statements.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of RNC to be materially different from
any future results, performance or achievements expressed or
implied by the forward-looking statements. The feasibility study
results are estimates only and are based on a number of
assumptions, any of which, if incorrect, could materially change
the projected outcome. Even with the completion of the feasibility
study, there are no assurances that Dumont will be placed into
production. Factors that could affect the outcome include, among
others: the actual results of development activities; project
delays; inability to raise the funds necessary to complete
development; general business, economic, competitive, political and
social uncertainties; future prices of metals; availability of
alternative nickel sources or substitutes; actual nickel recovery;
conclusions of economic evaluations; changes in project parameters
as plans continue to be refined; accidents, labour disputes and
other risks of the mining industry; political instability,
terrorism, insurrection or war; delays in obtaining governmental
approvals, necessary permitting or in the completion of development
or construction activities. For a more detailed discussion of such
risks and other factors that could cause actual results to differ
materially from those expressed or implied by such forward-looking
statements, refer to RNC's filings with Canadian securities
regulators available on SEDAR at www.sedar.com.
Although RNC has attempted to identify important factors that
could cause actual actions, events or results to differ materially
from those described in forward-looking statements, there may be
other factors that cause actions, events or results to differ from
those anticipated, estimated or intended. Forward-looking
statements contained herein are made as of the date of this news
release and RNC disclaims any obligation to update any
forward-looking statements, whether as a result of new information,
future events or results or otherwise, except as required by
applicable securities laws
SOURCE RNC Minerals