Lunnon Metals (ASX:LM8) is nearing completion of a planned Prefeasibility Study (PFS) for the Baker nickel deposit, which represents the first discovery at its Kambalda Nickel Project in Western Australia.
Lunnon Metals reports the PFS aims to convert the Baker indicated mineral resource, which currently stands at 929,000 tonnes @ 3.3% nickel for 30,800 contained nickel tonnes, to ore reserves; and prompt discussions with potential offtake partners.
The PFS is also being undertaken to understand the optionality of an accelerated project timeframe whereby potential free cash flow from Baker may be deployed to fast track a range of strategic growth options.
The company notes PFS work began prior to finalisation of the updated Mineral Resource Estimate (MRE) in late 2022.since then Lunnon has accomplished a geotechnical study, which confirms mining method selection and ground support regime, as well as capital development design, stoping, and production scheduling.
Other accomplishments to date include the completion of metallurgical testwork, definition of pre-development capital requirements, and capital operating cost estimates being finalised through both zero-based and external benchmarked approaches.
Commenting on the Prefeasbility Study, Lunnon Metals Managing Director, Ed Ainscough, says: “The PFS is progressing to its conclusion with just a few final matters to complete before we are ready to report the outcomes to shareholders. The goal is to declare Ore Reserves for Baker, which will be a significant milestone for the company coming less than 18 months after its discovery and less than 2 years since our ASX listing in 2021.
“The goal is to declare Ore Reserves for Baker, which will be a significant milestone for the company…”
All employees have worked diligently towards this milestone and it will be an important step in the journey from junior explorer to potential nickel producer.”
The company also notes the PFS excludes any economic consideration of inferred mineral resources at Baker, potential future extensions to Baker, and scale and synergies with Foster’s mineral resource.
Additionally, Lunnon says that palladium, platinum, and arsenic are also now estimated for the Baker mineral resource.
Meanwhile, regulatory approval has now been granted to take and discharge mine water from both the adjacent historical gold open pit and any potential future underground workings at Baker.
With the PFS nearing completion, Lunnon Metals announces a mining proposal / mine closure plan is currently in preparation and remains as the last key regulatory approval.
Lunnon Metals remains well placed to report the initial ore reserve in the near term and continue to progress Baker throughout 2023 towards a potential final investment decision.
Lunnon Metals is an ASX-listed mineral resource exploration company which owns 2 prospective WA-based projects with a focus on nickel sulphide exploration and discovery. The company’s Kambalda project is located within the Kambalda Nickel District, which extends for more than 70kms south from the township of Kambalda.
This world-renowned district has produced in excess of 1.4 million tonnes of nickel metal since its discovery in 1966.
Images: Lunnon Metals Ltd
