PERTH (miningweekly.com) –  The Nebo-Babel nickel/copper prospect, within the greater West Musgrave project in Western Australia, is economically viable, a scoping study has confirmed.

Owner Cassini Resources said on Monday that the project had proven economically viable at a range of different mine production and processing rates, but that two preferred scenarios were identified. These were a four-million-tonne-a-year base case and a staged development, which would start production at 1.5-million tonnes a year and expand to four-million tonnes a year after eight years.

In the base-case production scenario, the Nebo-Babel project would deliver 12 300 t/y of nickel-in-concentrate and 14 300 t/y of copper-in-concentrate, over an initial mine life of 15 years. The project would have an average C1 cash operating cost of $1.82/lb, and would generate life-of-mine revenue of A$6.7-billion.

The base-case model would require a capital investment of A$432-million and would deliver a net present value (NPV) of A$1.14-billion, and an internal rate of return (IRR) of 70%.

Cassini reported that the company had also contemplated a staged development of Nebo-Babel to lower the initial capital cost.

The scoping study estimated that the staged development would deliver 8 900 t/y of nickel-in-concentrate and 8 500 t/y of copper-in-concentrate over an initial 15-year mine life, with C1 costs estimated at $2.61/lb nickel.

The staged development option would require an initial capital spend of A$264-million, and a further A$202-million in year eight of operations, allowing production to ramp-up to four-million tonnes a year.

The staged development was expected to have a NPV of A$619-million and an IRR of 55%.

Cassini pointed out that while the staged development case had primarily been assessed to provide for a low up-front capital investment, the study also resulted in reduced technical risk and a more rapid payback period.

The staged development would further allow Cassini the optionality to time an expansion of the operations to any logical point following the commissioning of the mine, and would thus allow the company to schedule the larger-scale development to suit the prevailing commodity markets.

Cassini MD Richard Bevan said on Monday that the company would launch a prefeasibility study on the project, which would be completed before the end of the year.

Cassini would also conduct an exploration programme targeting extensions to both Nebo and Babel, while evaluating the resource potential at the Succoth deposit and conducting first-pass testing of other regional prospects.