Cobalt 27 Capital has filed a technical report for its recently acquired interest in the low-cost, long-life, Ramu nickel-cobalt operation in the Madang province, Papua New Guinea.
|Ramu location and surrounding infrastructure|
Anthony Milewski, Chairman and CEO of Cobalt 27 said that Company was excited to be releasing additional information on the Ramu asset.
“Ramu is a first-quartile project on the global nickel cost-curve, has an extensive mine life, with potential to deliver more than 30 years, and compelling exploration upside,” said Mr Milewski.
“The hydroxide product produced at Ramu is optimal for electric vehicles and battery storage markets, in fact already being sold to battery makers, enhancing shareholders’ nickel exposure at a time when global inventory levels are approaching levels not seen since the end of 2012, when nickel was trading at approximately US$8 per pound, on average.”
The technical report was independently prepared by Behre Dolbear Australia after several months of working with majority owner and operator, Metallurgical Corporation of China Limited (MCC) to conduct required due diligence and site visits.
Ramu is comprised of the Kurumbukari mine, which utilises conventional open-pit mining methods and beneficiation plant designed to treat around 4.6 million tonnes of ore per annum, located in the foothills of the Bismarck Ranges; and the Basamuk processing plant located on the East coast of Papua New Guinea, approximately 55 kilompetres southeast of Madang.
Beneficiated ore is transported from the mine via a 135 kilometres slurry pipeline to the Basamuk Plant which is designed to produce a mixed nickel-cobalt hydroxide product (MHP) containing around 32,600 tonnes nickel and 3,300 tonnes cobalt on an annual basis. MHP production for 2017 and 2018 has exceeded design capacity (106 per cent and 108 per cent respectively). BDA considers that commissioning and ramp-up was completed in 2015, and that the plant is capable of operating at design capacity going forward.
BDA has developed a life of mine (LOM) cash flow forecast model for Ramu using Proven and Probable Mineral Reserves based on the macroeconomic assumptions set out in detail in the technical report.
Over the current LOM of 14 years from 2019, Ramu projects that 52.3Mt of ore will be processed to produce 428,000 tonnes of nickel and 47,000 tonnes of cobalt in MHP. The LOM capital costs are projected to total US$247 million, for sustaining capital. Projected operating costs over the LOM are expected to remain consistent with actual operating costs experienced to date. Based on Wood Mackenzie’s independent analysis of global primary nickel producers, Ramu has positioned itself at or near the bottom quartile of global production based on a C1 cash cost basis since late 2017. This supports that Ramu has been profitable on a C1 basis at all points of the nickel commodity cycle over the last few years. Projections for revenue are based on the Mineral Resource and Reserve estimates and continuation of current production levels.
Ramu has an established history of operations since being commissioned in 2012. In the last two years, the refinery has exceeded design capacity, producing an average of approximately 90,000 tonnes per annum of MHP containing 35,000 tonnes of nickel and 3,300 tonnes of cobalt. Current guidance for 2019 indicates that similar production levels will once again be attained. A summary of Ramu’s historical ore and MHP production.
Over the course of 2017, 2018 and 2019 Ramu has consistently ranked at or near the bottom quartile of C1 cash costs as reported by Wood Mackenzie. Since Q4 2017, Wood Mackenzie has reported that Ramu has averaged a C1 cash cost of US$ 2.27/lb of nickel which is below the same period average for the bottom quartile of US$2.34/lb
The Ramu technical report is available on SEDAR at www.sedar.com and on the Company’s website www.cobalt27.com