Blackstone Minerals delivers expanded pre-feasibility study for Ta Khoa nickel project

Blackstone Minerals (ASX: BSX) has announced the completion of the pre-feasibility study (PFS) for the upstream business of its 90% owned Ta Khoa nickel project in northern Vietnam.

The study presents Ta Khoa as an “innovative and globally significant, vertically integrated business strategy” to deliver “secure, sustainable and economic supply” of battery-grade nickel-cobalt-manganese (NCM) 811 precursor products into the growing lithium-ion battery industry.

This upstream study follows the delivery of a downstream PFS on Ta Khoa’s refinery project announced last July. Its economics are underpinned by around half of the refinery’s concentrate feed being provided by the upstream project.

To achieve this, Blackstone has concluded a larger beneficiation plant would enable the company to capture a high proportion of its Ban Phuc disseminated sulphide (DSS) deposit. The plant would then be supplemented with feed from the Ban Chang and King Snake underground massive sulphide vein (MSV) deposits.

Key outcomes of PFS

Ta Khoa’s PFS mining inventory includes 64.5 million tonnes grading 0.41% nickel for 264,000t nickel. The Ban Phuc deposit has been estimated to hold 48.7Mt of probable reserves grading 0.43% nickel for 210,000t nickel. Around three-quarters of mill feed over the estimated life of mine is in the probable reserve category.

The study has also improved on the outcomes presented in the scoping study base case released in late 2020. These include a 60% increase in contained nickel metal and a longer processing life of 9.2 years, up from 8.5 years.

The estimated life-of-mine PFS concentrate production also saw a 39% increase in nickel, totalling 1.9Mt at 8% nickel for 151,000t nickel.

Base case economics

Under the PFS, a total pre-production capital of US$854 million has been estimated for the Ta Khoa nickel project. A post-tax net present value of US$1.99 billion has been determined with a 47% internal rate of return and an estimated 1.8-year payback period from first production (expected in 2025).

Average annual operating cash flow has been calculated at US$533 million with a life-of-operations all-in sustaining cost of US$12,253 per tonne of NCM 811 comparing to the average NCM 811 precursor price of US$17,670/t.

First concentrate production is planned for 2025 with output ramping up to nameplate design of 8Mtpa in 2027.

Blackstone expects a steady state average annual nickel output (recovered in concentrate) of about 18,000tpa and concentrate production of about 225,000tpa.

Gearing up to start DFS

In a management statement, the company said it is “immediately progressing approval to commence definitive feasibility studies” for the Ta Khoa nickel project.

“Importantly, following the successful capital raising of $60 million, the company is well capitalised to continue to de-risk the Ta Khoa nickel project, which also includes additional resource definition, further metallurgical test work particularly synergistic recovery improvements by blending DSS and MSV mill feed and ongoing underground mining transecting the Ban Phuc DSS to provide bulk sample for pilot plant test work in Australia and Vietnam.”