Two years after making a bet on Guatemalan nickel laterite, Anfield Nickel (ANF-V) has some hard numbers regarding the wisdom of the venture with its first preliminary economic assessment on the Mayaniquel project.
The study looks 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 20,000 tonnes of nickel a year, within 83,000 tonnes of ferronickel.
The process would involve separating 19% of the material that would go straight to a processing plant, with the rest rerouted to an upgrading plant. The rerouted material would then be separated into lower- and higher-grade nickel, with the low grade rejected. The overall feed to the processing plant would come in at 1.68% nickel.
Later processing would involve drying and calcining the material with coal in a rotary kiln, and feeding it into an 80-megawatt furnace. Much of the accessible resource for a laterite deposit is in the saprolite, which does away with the need for a more complex high-pressure acid leach system.
But the infrastructure and electricity demands 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 lb. nickel would be US$3.14, after a 19¢ contained iron credit.
That works out to a net present value of US$606 million at an 8% discount rate, or US$337 million with a 10% discount, while the internal rate of return comes in at 14.1%. Anfield used a long-term nickel price of US$8.25 per lb. The current price is around US$10.50.
The study is based on the Sechol and Tres Juanes deposits. An earlier report estimated that the saprolite and transition zones has 17.2 million indicated tonnes at 1.62% nickel and 23.3 million inferred tonnes at 1.44% nickel, while the lower-grade limonite zone has 7.5 million indicated tonnes at 1.2% nickel and 7 million inferred tonnes at 1.17% nickel. The company notes that the two deposits make up 63% of Anfield's indicated resources and 52% of the inferred resources, above a 1% nickel cut-off, 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 800-sq.-km property on Lake Izabal 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, closing 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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