Sirius Resources’ Definitive Feasibility Study for its $AU471 million Nova-Bollinger nickel mine, in Western Australia, is on track for a go-ahead decision expected in June.
Sirius managing director Mark Bennett said the company is already fielding significant interest from financiers after releasing its Scoping Study in September.
“Our scoping study has firmed that Nova and its nearby subsequent Bollinger discovery is a financially and technically low risk minimum ten year mine life project,” Bennett said.
Bennet said the project is attracting unsolicited financing offers at “incredibly cheap rates” just so that parties could “get a seat at the table”.
“We believe that once production commences, Sirius will emerge as between the 10th and 14th largest nickel producer in the world,” he said.
Nova has anticipated C1 cash costs of $US1.57/pound in concentrates net of by-product credits.
“The $471million capex is in line with our expectations but does include a contingency of $AU51 million for delays and inflation – but hopefully we won’t encounter those,” Bennett said.
The stars continue to align for Sirius with the expected ramp up of the Nova mine expected to coincide with a predicted revival of the nickel price.
Bennet said the project is an opportunity to “catch the wave that is coming”, particularly with world nickel production increasingly being “under the water”.
“The consensus nickel pricing during our ten year mine life, starting in 2016 after a two year mine construction period, is forecast to be around $US10 a pound,” Bennett said.
“Using a flat 0.90 US/AU exchange rate, this will generate revenue of $AU4.6 billion and net cash flow of A$2.8 billion.
“We are highly leveraged to the nickel price with $AU440 million cash flow per $US1/lb change.
“Sirius will not however, be nickel hedging as Nova offers a very rapid payback potential.”