Vancouver - Two years after making a bet on Guatemalan saprolite, Anfield Nickel (ANF-V) has some hard numbers clarifying the wisdom of the venture with its first preliminary economic assessment on the Mayaniquel project.
The study looked at a strip mining operation, with a 0.35 to 1 ratio, delivering 3,600 tonnes of lateritic ore to a plant for 30 years. The end result would be a mine producing about 20,000 tonnes of nickel a year within 83,000 tonnes of ferronickel.
In between, the process will involve separating out 19% of the material that will go straight to a processing plant, with the rest will be rerouted to an upgrading plant. The rerouted material will then be separated into lower and higher grade nickel with the low grade rejected. The overall feed to the processing plant will then come in at 1.68% nickel.
Processing then involves drying and calcining the material with coal in a rotary kiln and then feeding it into an 80 megawatt furnace. For a laterite deposit, the process is fairly simple thanks to much of the accessible resource being in the saprolite, which does away with the need for a more complex high-pressure acid leach system.
But all the infrastructure and electricity demands still are not cheap. The study estimates capital costs of US$1.23 billion, plus sustaining capital costs of US$200 million, with a payback of just over five years. The cost per pound of nickel works out to US$3.14, after a 19¢ contained iron credit.
All together, the financials work out to a net present value of US$606 million at an 8% discount, or US$337 million with a 10% discount, while the internal rate of return came in at 14.1%. Anfield used a long-term nickel price of US$8.25 per lb., while current price is around US$10.50.
The study was based on the Sechol and Tres Juanes deposits. A recent report estimated that the saprolite and transition zones had 17.2 million indicated tonnes grading 1.62% nickel and 23.3 million inferred tonnes grading 1.44% nickel, while the lower-grade limonite zone had 7.5 million indicated tonnes grading 1.2% nickel and 7 million inferred tonnes grading 1.17% nickel. The company noted that the two deposits only make up 63% of Anfield's indicated resources and 52% of the inferred resources, above a 1% nickel cutoff, at its Mayaniquel project.
The company was started by Ross Beaty, David Strang and Marshall Koval following their earlier success at Lumina Copper. Anfield snagged the over 800-sq.-km property from BHP Billiton (BHP-N) in May 2009 for US$2.5 million and a 1.5% net smelter return royalty after the global giant largely pulled out of the sector.
Guatemala has a presidential election coming up in September, but Anfield president and CEO Koval said in a conference call that the heads of the two leading parties were both pro-development and he doesn't anticipate any problems with the upcoming election.
Anfield's share price rose 45¢ over two days to close at $4.90 the day after the results were released. The company has a 52-week share price range between $2.89 and $5. Anfield has 38 million shares out, with Lumina Capital holding about 35%.
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