Blackstone Minerals has tabled a pre-feasibility study or “PFS” projecting very strong profits for downstream processing of nickel concentrate products from a proposed hydrometallurgical venture in Vietnam. The study is based on construction of a hydrometallurgical plant close to its developing Ta Khoa operations which will produce nickel-cobalt-manganese or “NCM” for use in the manufacture of lithium-ion batteries. It suggests the integrated project could deliver a revenue stream of more than $19 billion over an initial 10-year period.
Feed for the proposed refinery from the company’s developing Ta Khoa nickel mining operation could be supplemented by nickel concentrates from third party suppliers. Blackstone is planning to process around 400,000 tonnes of concentrates per annum and produce 85,600t of NCM, which currently trades on the Shanghai spot market at around US$20,000/t.
In addition, the refinery will push out more than 43,000t of nickel and 4,100t of copper, further bolstering Blackstone’s cash flow.
Blackstone Minerals Managing Director Scott Williamson said: “The base case refinery represents management’s view of the scale of operations that could over time, through exploration success, be supported by the company’s existing nickel sulphide mineralised landholdings. Economics have been presented assuming a 10-year life-of operations, aligned with known and desired life-of-mine for 3PF concentrate sources that Blackstone aims to secure offtake. Management considers the more likely scenario is that the refinery life will extend beyond 10 years.”
Overall, the company’s PFS has produced an impressive set of numbers for the proposed bolt-on addition to the operation, with the study showing the downstream processing to have a net present value in excess $2.7 billion and boasting an internal rate of return of 67 per cent. The study also shows an average operating post-tax cash flow of more than $610 million per annum whilst the initial capital expenditure of US$491 million is expected to be repaid in only 18 months.
Blackstone’s NCM refinery study builds on its previous work and is based on the development of its Ta Khoa project in the north of the country. The company released its maiden PFS for the proposed nickel operation in late 2020, which in its own right delivered a net present value close to $1 billion and an estimated pre-tax cash-flow of more than $240 million per annum. It is this mining operation and the development of Blackstone’s 44 million tonne Ban Phuc disseminated sulphide resource that will underpin development of the overall operation.
The company has now launched into a definitive feasibility study or “DFS” on both the Ta Khoa mining and milling operation and its proposed NCM refinery. In addition, the nickel hopeful is looking to build a pilot plant in Vietnam as part of the DFS and has also begun discussions with potential offtake and finance partners as it looks to fast-track the project.
With the combined Ta Khoa PFS work demonstrating operating cash flows of more than $850 million a year and the company targeting a move to production in 2024, Blackstone looks to be riding high in Vietnam and is rapidly taking up pole position in this emerging South-East Asian powerhouse economy.
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