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No time like the present

he coronavirus pandemic started to be- A pre-tax NPV of $305 million and 98% ing to grow, but don’t discount the space in
Tcome very real in Australia about the IRR were among other highlights of a DFS between the Long operation, which we pur-
time Paydirt walked into Mincor Resources that included life-of-mine cash costs of chased from IGO [Ltd], and our Durkin de-
NL’s West Perth office in mid-March. $3.36/lb (Cassini averaging $2.71/lb) and posit. There is a 1.1km space underground
The glamour boys of the mining sector – life-of-mine AISC of $4.47/lb (Cassini $3.81/ that we are going to link up with an incline.
Australia’s mid to large cap gold companies lb), using a $10.20/lb nickel price and ex- That is part of our development works to get
– had just started getting smashed by the change rate of 70c. started; not one single drill hole has been
market and can now only wonder when the Mincor’s underground nickel operations put into that area and 1mt nickel has come
point of return will come. DFS has been delivered on time and de- out of that area. They have been long-term
Mincor, like all mining houses, was suffer- spite certainty being a minute-by-minute targets for a very long time, but they have
ing the same fate but as managing director proposition, the funding process with do- been owned by separate companies and
David Southam pointed out, the company’s mestic and international institutions remains now it is owned by one company,” Southam
12-month performance was still in positive in play, with binding credit-approved term said.
territory. sheets expected in the June 2020 quarter. Current drilling at Cassini aims to convert
Furthermore, the company had and still An ore tolling and offtake purchase some inferred material into indicated and
has $52 million cash, is debt free and is agreement in place with BHP Nickel West potentially grow the resource.
owner of an asset like no other in the mar- arranged in 2019, means if a final invest- Cassini is a greenfields discovery and
ket right now. ment decision is made in the September in January an intersection of 17.6m @ 5%
quarter, Mincor nickel outside the resource boundary and
could be back in pro- 115m down-plunge from the previous inter-
duction sometime in cept is believed to be one of the best-ever
the back half of 2021. strikes in Kambalda’s nickel history.
The company Southam said such a result indicated the
has started an early potential for longevity at Cassini.
works programme, “If you go by the history of Kambalda de-
which includes a posits they tend to at least double, triple and
box-cut at Cassini. some of them grow by 20 times – I am not
“There are very saying that Cassini will grow by 20 times
few ways to play – but the example being Otter Juan which
nickel in Australia, started at a 17,000t resource and ended up
nickel sulphides at 317,000t,” he said.
particularly. We are “We’re also drilling what we call Cassini
the only company North less than 500m away from the Cassi-
that’s developing a ni main deposit. We are chasing high MgO
new operation in the flows because we have had intersections in
Kalgoorlie/Kambal- there of economic grade. You can imagine
da region. We have if we can uncover another resource 500m
BHP [Ltd] right on away we can access that straight away
our border, they are from underground because we have sunk
very close to our ten- the infrastructure. I think what the future
ements and we are holds for Cassini is resource extensions,
David Southam close to their infra- especially when we get underground and
structure. BHP has are able to drill.”
That asset – Cassini (1.05mt @ 3.3% expressed an interest in growing, so we are Keeping a close eye on Mincor has been
nickel for 34,300t) – is poised to be the looking at opportunities to partner and grow Andrew Forrest’s Squadron Resources Pty
centerpiece of Mincor’s nickel operations in our business,” Southam told Paydirt. Ltd, which has built its stake to about 13%
Western Australia’s Kambalda district. “I went through the GFC and now after in the company. Squadron, along with IGO
A DFS on Mincor’s restart to nickel op- 5-6 years of very solid growth on the mar- (4.5%), have keen interests in Mincor, how-
erations was released in late March and ket it has taken a global event to pull back a ever, Southam is not focusing on what may
identified the need for $68 million in pre- lot of those gains; good projects with good eventuate consolidation-wise.
production capex for mine development backers will survive these cycles. There “We can’t get distracted on things like
and related infrastructure to reboot an ini- is nothing like Cassini in the market at the that because if you get distracted you are
tial five-year operation producing at a peak moment, nickel sulphide is hard to find, we focusing on the wrong matter. There has
rate of 16,000 tpa nickel-in-concentrate in have a strong balance sheet with over $50 been some activity in the past and we are
FY2023 and FY2024. million in the bank and no debt; we are in a comfortable where we are sitting having
Life-of-mine capex has been estimated very privileged position.” the only greenfields discovery in 20 years in
at $179 million (peak cash requirement of The nickel-envy being created by Mincor Kambalda and some of the best high-grade
$97 million, including working capital) for promises to be sustainable, with the com- intersections that you’d ever come across
an operation currently boasting a global re- pany’s reserves totaling a combined 2.3mt as a geologist,” he said.
source of 2.5mt @ 2.9% nickel for 71,000t @ 2.8% nickel for 65,400t.
nickel-in-ore and 5,000t copper ore. “We are very confident that Cassini is go- – Mark Andrews

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