An interview with a little more detail on the process
http://www.resourceintelligence.net/hard-creek-nickel%E2%80%99s-game-changing-metallurgical-breakthrough-boosts-company%E2%80%99s-outlook/15853
Resource Intelligence: Could you give us some numbers that would support the claim that Turnagain is a “giant” nickel-sulphide deposit and also help investors evaluate its
economic potential?
Mark Jarvis: My answers are based on an April 2010 technical report that models a traditional mine, mill and flotation circuit, plus a non-traditional leach process coupled with SX-EW to produce metal on site. Our new model will eliminate the leach and SX-EW, leaving a “plain vanilla” technology mine, and the economics are expected to change. With that caveat in mind treat my answers as indicative of scale only.
Giant nickel deposits are generally defined as those capable of producing more than 20,000 tonnes per annum (t.p.a.) of nickel. The Wardrop report modeled average production of 35,000 t.p.a. of nickel at Turnagain, plus 2,000 t.p.a. of cobalt, with a mine life of 24.4 years.
C1 costs of production were estimated at $3.30 per pound of nickel. C1 is the total cash cost to produce nickel metal, net of by-product credits. That cost is in the most competitive quartile of the giant undeveloped nickel deposits in the world.
Resources are estimated at 695 million tonnes grading 0.216% Ni and 0.014% Co in the measured plus indicated category, plus another 510 million tonnes in the inferred category. Constrained by pit walls, total projected tonnage to be mined is 761.2 million tonnes grading 0.212% Ni and 0.014% Co.
The most common valuation method for mining projects is Net Present Value at a discount rate of 8% (PV8). At an assumed price of $8.50 per pound for nickel, PV8 is estimated by Wardrop at $715 million. Internal Rate of Return (IRR) is 10.7%. Payback is 8.1 years. Nickel is currently more than $12 per pound. At $12 nickel, the PV8 is $3.3 billion, the IRR is 19.9%, and the payback is 4.4 years.
