Blackstone scoping study showcases sweet numbers for Ta Khoa nickel project
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Special Report: Blackstone is looking forward to developing the Ta Khoa nickel, copper and platinum group elements project after having its first proper look at its economics.
And it’s not hard to see why, with the maiden scoping study estimating that it can deliver robust net present value (NPV) of $US665m ($929m) and internal rate of return (IRR) of about 45 per cent.
NPV and IRR are both metrics used to assess the profitability of a project.
The study validates Blackstone Minerals’ (ASX:BSX) push to restart Ta Khoa and develop downstream processing infrastructure in Vietnam to produce battery-grade nickel and cobalt to supply Asia’s growing lithium-ion battery industry.
To top it off, the company has flagged that it has multiple opportunities to improve on the already attractive numbers presented in the scoping study.
These include staged capital expenditure; credits from by-products such as copper, gold and PGEs; and further exploration on the King Cobra Discovery Zone, Ban Chang, Ta Cuong and 25 untested massive sulphide veins (MSV).
“Whilst we are pleased with the outcomes of this study, we will continue to expand our resource and increase our production potential in this exciting, and yet under-explored region of Vietnam and have commenced work on PFS level studies for the project,” managing director Scott Williamson said.
Ta Khoa includes an existing 450,000 tonne per annum concentrator that has been under care and maintenance since 2016 due to falling nickel prices.
Previous project owners focused mining and exploration efforts primarily on the thin but high-grade massive sulphide veins (MSV) at the Ban Phuc deposit, where 975,000 tonnes were successfully mined from an average vein width of 1.3m and at average grades of 2.4 per cent nickel and 1 per cent copper.
However, their activity was limited and Blackstone’s exploration activities to date have already defined a maiden Ban Phuc disseminated sulphide (DSS) indicated resource of 44.3 million tonnes (Mt) grading 0.52 per cent nickel for 229,000t of contained nickel for the scoping study.
There’s also a separate, lower confidence, inferred resource of 14.3Mt at 0.35 per cent nickel, or 50,000t of contained nickel.
Indicated resources have sufficient information on geology and grade continuity to support mine planning.
The resource is enough to drive base case annual production of about 12,700t of nickel, delivering pre-tax cashflow of $US179m per annum over an estimated 8.5 year project life.
Pre-production capital costs are estimated at $US314m with payback expected within 2.5 years.
Blackstone is focused on developing Ta Khoa into a fully-integrated mine-to-market nickel business with one of the world’s first green nickel processing facilities, a goal that is supported by its proximity to South East Asia’s largest hydropower plant.
The company currently has six drilling rigs in operation at the project, three of which are testing MSV targets at Ban Chang while the other three are testing down dip extensions of the King Cobra discovery at Ban Phuc.
Drilling has already intersected high-grade massive sulphide nickel over a 1.2km strike at Ban Chang.
Metallurgical testing is already underway on the Ban Phuc DSS deposit to develop a processing ‘flow sheet’ for a product suitable for the lithium-ion battery industry.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.