Metal X’s nickel-cobalt spin out Nico Resources is gearing up to list next month – with some familiar faces at the helm.
Executive director and CEO Rod Corps and chairman Warren Hallam are both Metals X (ASX:MLX) alumni, with Corps previously involved in the spin-out of the company’s gold assets and Hallam an executive director and managing director in Metals X for around 15 years.
The spin-out covers the Central Musgrave Project (CMP) tenements which comprise three main exploration licences – Wingellina (WA), Claude Hill (SA) and Mt Davies (SA).
Wingellina has combined mineral resources of 182.6 Mt at 0.92% nickel and 0.07% cobalt for 1.68 Mt of contained nickel and 132Kt of contained cobalt, and probable ore reserves of 168.4Mt at 0.93% nickel and 0.07% cobalt for 1,561Kt of contained nickel and 123Kt of contained cobalt.
Claude Hills has inferred mineral resources of 33.3 Mt at 0.81% nickel and 0.07% cobalt for 270Kt of contained nickel and 23Kt of contained cobalt.
Spin-out the natural step off the back of strong nickel prices
“With where Metals X is placed in the growth phase, it makes sense to demerge and put these assets into a single purpose listed vehicle – especially in the current nickel price environment,” Corps said.
“And that price is looking like it will continue to improve over the next 5-10 years with the rise of electric vehicles.
“It’s pretty exciting times in the nickel space at the moment with cobalt increasing as well.
“So, the plan now is to complete the raising, and then get Wingellina into development.”
Corps said the company’s IPO is open, with listing expected in early January.
Wingellina fully approved and ready to go
Hallam was originally the managing director of pre-Metals X entity Metals Exploration back when the Wingellina nickel-cobalt project was acquired in 2007 and he’s been heavily involved in getting the project development ready.
A Phase 1 Feasibility Study (+25%) with HPAL processing was completed in 2008 which indicated a 39-year project life producing around 40,000tpa of nickel and 3,000tpa of cobalt.
Since then Metals X has continued to undertake additional metallurgical optimisation, processing and infrastructure studies.
“We’re one of a handful of projects that are ready in the nickel area to be developed, because as you know, it takes many years to get a project off the ground, especially to get the approvals – but most of those approvals are in place and we’re ready to move forward,” Hallam said.
Next – update the pre-feasibility study
Corps said Wingellina has had around $60-odd million dollars spent on its development to date.
“It’s been proven up, it’s an extremely large nickel laterite limonite deposit 1.63 million tonnes in reserve, 2 million tonnes in resource,” he said.
“Since 2007, Metals X has done a pre-feasibility study, it’s gained all land access and EPA approvals as well
“A lot of work has been done developing the project to get it to the stage now where it’s in a development-ready position with all approvals in place.”
Hallam said the next step is to focus on any technology changes that may or may not have occurred over the last five years, and to update the pre-feasibility study.
Long-term nickel demand bodes well
“Because it’s such a large project, it does require quite a large upfront capital and that’s partly why it did go out into a final feasibility study in 2012, but the nickel price collapsed at the time,” Hallam said.
“Now the nickel price has recovered, so it’s time now to move forward and see what those opportunities are.
“Once you’ve developed this project, the payback is four to five years, and then you have a very, very long-term project.”
Hallam said the reserves of 1.63 million tonnes equates to 40,000 tonnes of nickel production per annum which equates to over 39 years of production – which at current nickel prices would equate to a revenue of over a billion dollars.
Corps adds that with the interest being shown by a lot of majors worldwide for long-term nickel supply there should be some “very interested parties” with the financial capabilities to back the project.
This article was developed in collaboration with Nico Resources Limited, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
Any documents linked or referred to in this article were not selected, modified or otherwise controlled by Stockhead. Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in the documents linked or referred to in this article.