The cornerstone of the Company’s nickel division is its 100% ownership of the world-class nickel assets in the Central Musgrave Project (“CMP”) located in the Central Musgrave Ranges.
The CMP straddles the triple-point of the WA/NT/SA borders and the project encompasses 1,957km2 of prospective exploration tenure that includes the Wingellina nickel deposit, the Claude Hills nickel deposit, and the Mt Davies exploration prospects.
Metals X’s Nickel Division is centred around the Wingellina Project. The Wingellina Project, which is part of the larger regional Central Musgrave Project is one of the largest undeveloped nickeliferous ‘pure oxide’ limonite accumulations in the world.
The Wingellina Project consists of 187M tonnes of ore at 1% nickel and 0.08% cobalt. Over 167M tonnes or 90% of this resource is classified as Probable Mining Reserve. 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).
Metals X has completed its Phase 1 Feasibility Study (+/– 25%) 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 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.
In September 2012 Metals X signed a memorandum of understanding with Samsung C&T Corporation which will see the parties collaborate to complete an updated Detailed Feasibility Study (DFS) and move the Wingellina Nickel-Cobalt project into production. Samsung C&T will provide its technical expertise in engineering, feasibility studies and construction to assist Metals X in completing the study.
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 depost 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 which already boasts an estimated 40 years of production at a rate of 40,000 tonnes of nickel and 3,000 tonnes of cobalt per annum.
The very significant resources identified at the Wingellina Project and the nearby Claude Hills Project represent exploration on less that 25% of the known potential mineralised zones in the area. While the Company is focussed on bringing the Wingellina Project to development, the potential upsides remains vast.