Regional Exploration
The Wingellina Project is part of Metals X’s Central Musgrave Project, which straddles the triple-point of the Western Australia, Northern Territory and South Australia borders. Wingellina is development-ready and is the largest undeveloped nickel-cobalt project in Australia.
Overview
The Central Musgrave Project encompasses approximately 2,000 km2 of prospective exploration tenure that includes Wingellina, the Claude Hills nickel deposit, and the Mt Davies exploration prospects.
The Central Musgrave Project has a Mineral Resource containing approximately 2.0 million tonnes of nickel and 154,000 tonnes of cobalt within which Wingellina hosts an Ore Reserve of approximately 1.56 million tonnes of nickel and 123,000 tonnes of cobalt.
Background
Wingellina is one of the largest nickeliferous ‘pure oxide’ limonite accumulations in the world. The mineralogy of the Wingellina ore is a major strength of the project as, unlike most Australian nickel laterite projects, Wingellina ore has characteristics perfectly suited to High Pressure Acid Leaching (“HPAL”), with high iron grades (resource average 47% Fe2O3) and a very low concentration of magnesium (resource average 1.6% Mg).
A landmark mining agreement for the Wingellina project was signed on 15 July 2010 with the Traditional Owners of the Yarnangu Ngaanyatjarra Lands through their representative bodies. The agreement provides the right to mine and develop infrastructure within the agreement area subject to regulatory approvals and for the grant of a mining lease.
Feasibility Study
Metals X completed a Phase 1 Feasibility Study (+/– 25%) in 2008 which defined a robust project with a minimum 40 year mine life at an average annual production rate of 40,000 tonnes of nickel and 3,000 tonnes of cobalt. The Feasibility Study assumed a nickel price of US$20,000 per tonne nickel, US$40,000 per tonne cobalt and an A$/US$ exchange rate of 0.85, resulting in an estimated NPV(8%) of $3.4 Billion at a production cost of US$3.34/lb after cobalt credits.
A DFS was completed in 2009. Environmental approvals are in progress and Metals X is currently working with its joint venture partners to prepare the project for development.
Wingellina High Grade Cobalt Domains and Metallurgical Studies
With the movement in the cobalt price in early 2017, Metals X undertook a review of the cobalt inventory of the deposit from which it defined high grade cobalt domains. Further studies identified 15 main high grade cobalt – nickel pits within the Wingellina deposit. Although the 15 pits identified total a significant quantity of nickel and cobalt (326,100 tonnes Ni and 25,800 tonne Co), collectively they contain less than 20% of the total contained nickel and cobalt in the Central Musgrave Project.
In October 2017 Metals X initiated further studies at Wingellina and conducted an infill drilling program within 6 of the identified high grade cobalt-nickel open pits. Optimisation of the high grade cobalt – nickel pits incorporating the latest drill results is now in progress for the purpose of targeting a potential high nickel-cobalt grade, lower capital start-up option for Wingellina. In addition, additional metallurgical testing has been conducted during 2018 for the production of cobalt sulphate and nickel sulphate as feedstock for the battery industry. Leaching of cobalt and nickel has been completed successfully. Previous variability testwork indicated that leach recoveries of over 94% for both nickel and cobalt are achievable with acid consumptions of approximately 300kg/t.
Claude Hills Project
The Claude Hills deposit is located approximately 30 km to the east of Wingellina. A significant exploration project was completed in 2010 which identified an initial deposit of 33.3 million tonnes at 0.81% Ni and 0.07% Co. The additional resource at Claude Hills demonstrates the potential to add a significant amount of additional reserves and mine-life to the Wingellina Project.
Central Musgrave Exploration Upside
The large resources identified at the Wingellina Project and the nearby Claude Hills Project represent exploration on less than 25% of the known potential mineralised zones in the area. While the Company is focussed on bringing the Wingellina Project to development, the potential upside exploration opportunity is significant.