Lunnon Metals (ASX:LM8) has completed a Prefeasibility Study (PFS) and an initial probable ore reserve for the Baker deposit within its greater Kambalda Nickel Project in Western Australia.
The company says the ore reserve stands at 612,000 tonnes @ 2.86% nickel (Ni) for 17,500 contained nickel tonnes, and the PFS confirms that Baker is a ‘commercially robust’, ‘high-grade’ nickel sulphide orebody, with a ‘modest’ pre-production capital cost of $18.6 million.
Lunnon reports the PFS also confirms that Baker will produce a premium nickel concentrate, and the results have warranted the start of offtake discussions for the project. Additionally, the PFS leaves a ‘significant’ future upside potential, with a depth of mining of less than 200m below surface.
The company notes upside potential includes the likely future extensions to Baker, with the deposit remaining open down plunge, the potential contribution from the East Trough deposit, and the scale and synergies with the Foster deposit’s mineral resources.
Commenting on the PFS, Lunnon Metals Managing Director Ed Ainscough says: “Kambalda has been one of Australia’s most prolific nickel production centres for over 55 years. Despite this long history, the district is still a globally relevant nickel belt and remains an important strategic source of high-grade, premium-quality nickel sulphides.
Baker continues this proud Kambalda tradition, and the company is likewise proud to report the results for that deposit’s PFS and initial Ore Reserve.
“Baker continues this proud Kambalda tradition, and the company is likewise proud to report the results for that deposit’s PFS and initial Ore Reserve.”
These impressive results come within two years of listing on the ASX and at a time when Kambalda is once again in the headlines, this time as a sought-after key production centre driven by its many positive attributes, including its high-grade, superior concentrate quality and consequent low energy- and capital-intensity to exploit.
I would like to thank the Lunnon Metals team, who have worked to deliver these outcomes over the past two years. They more than anyone know that this is just the start; these are very much initial results, with plenty more to come from our growing Mineral Resource base already defined at Baker and Foster but also from the many exciting exploration programs across the rest of our portfolio.
To have access to such high-quality tenure in the heart of Kambalda is truly amazing and sets the company and its shareholders up for a bright future.”
The company also notes the PFS indicates a pre-tax and post-tax free cash flow generation of $196 million and $145 million, respectively, as well as a premium sulphide concentrate averaging 14.6% Ni, an iron:MgO ratio of 18.8 and low arsenic of 440 parts per million.
Lunnon Metals is an ASX-listed mineral resource exploration company that owns 2 prospective Western Australian projects with a focus on nickel sulphide exploration and discovery. The company’s primary goal is to become the owner of sufficient mineral resources through discovery and development in order to be a key player in the resurgence of the nickel sector.
The company’s Kambalda Nickel Project is located about 570km east of the Western Australian capital city of Perth and about 50-70km south-southeast of the township of Kalgoorlie in the Eastern Goldfields. The project covers a total land area of 47km-square comprising 2 parcels of 19 and 20 contiguous granted mining leases.
Write to Adam Drought at Mining.com.au
Images: Lunnon Metals Ltd
