Name and Location
Nova nickel project, Western Australia, Australia.

Client
Independence Group.

Project Description
The Nova project is located in the Fraser Range, about 120 km east of Norseman.

Nova has a probable ore reserve estimate of 13.6-million tonnes grading 2.0% nickel, 0.8% copper and 0.01% cobalt for a contained 275 000 t of nickel, 112 000 t of copper and 9 000 t of cobalt.

A definitive feasibility study (DFS), completed in July 2014, indicated that the project is technically low risk and it can be highly profitable in less than two years. Independence completed an optimisation study in December 2015, which includes modifications of the mine design to prioritise higher-value ore early in the life of the mine.

The planned mine is based on a 1.5-million-tonne-a-year underground operation with decline access. The principal stoping method will be sublevel open stoping, with paste fill to maximise extraction. An estimated 86% of the planned production will be from sublevel open stoping.

The processing plant will use a conventional crushing process, with a primary crusher fed by a dedicated front-end loader from stockpiles. A mobile crusher has also been incorporated into the design as backup for the primary crusher. Grinding by an open circuit semiautogenous mill will be followed by a ball mill in closed circuit with hydrocyclones.

The flotation flowsheet required to produce separate copper and nickel concentrates is an open circuit, based on roughing, cleaning and cleaner scavenging. The circuit will be replicated for copper and nickel circuits, and regrinding on particular streams will be used to increase liberation and recovery for both circuits.

Low-sulphur tailings will be sent to either a high-density polyethylene (HDPE) plastic-lined tailings storage facility (TSF) or to the paste plant. The TSF has a designed storage capacity to store the process tailings not used as paste fill for the underground mine and will also be used as a reservoir for initial mine dewatering water. The TSF design is an above-ground impoundment with a single-perimeter embankment and it will be lined with a composite liner system comprising a clay layer and an HDPE layer.

A detailed flowsheet and plant design have been completed and the site layout has been finalised. The plant layout has been designed with expansion capability, should additional mineralisation be discovered or throughput be increased. The crushing, grinding and flotation circuits have been sized to allow for a range of material types with varying comminution and flotation characteristics to minimise the risk of bottlenecking.

Groundwater exploration, pump testing and modelling simulations have been completed around the Nova-Bollinger deposits. Results indicate that some dewatering of the mine environment will be required during mine development. This water will be stored in the TSF and is expected to provide sufficient water for the first two years of mining and processing operations.

Beyond this period, process water will be sourced from three water bores identified in other aquifers within 4 km of the planned mine. As a contingency, further groundwater resources exist within a 50 km radius of the project and are available for development.

A reverse osmosis plant will provide desalinated water for concentrate cleaning and drinking water.

The project has a ten-year mine life and will produce 26 000 t/y of nickel, 11 500 t/y of copper and 850 t/y of cobalt.

Net Present Value/Internal Rate of Return
The net present value (NPV) of the project has not been disclosed, but relative to the DFS, the optimisation study has delivered a 36% improvement to the project NPV. The decision in July 2016 to develop the Bollinger orebody decline early will further increase the NPV.

Value
The initial capital cost estimated in the DFS was A$473-million. This was revised down to A$443-million in January 2015, owing to increased competitiveness in cost inputs.

Duration
The project will be commissioned late in 2016 and will produce its first concentrate by December.

Latest Developments
The development of the Bollinger orebody at the Nova project has been accelerated, with work having started on a new decline. Early access to the Bollinger orebody is expected to deliver enhanced early cash flow and additional project value.

Barminco, the existing underground mining contractor at the Nova project, is carrying out the additional development as an expanded scope of works. The decline development started in July and, to date, 125 m of progress has been achieved.

The Nova project was 93% complete and the processing plant 86% complete at the end of June.

The first development ore was mined in June.

Key Contracts and Suppliers
Barminco Holdings (underground mining contractor).
GR Engineering Services (EPC for nonprocess infrastructure).

On Budget and on Time?
The project is on schedule and on budget.

Contact Details for Project Information
Independence Group MD Peter Bradford, tel +08 9238 8300.
Barminco investor relations, tel +61 8 9416 1000 or email investor.relations@barminco.com.au.