CaNickel Mining (TSXV: CML) has released results of a preliminary economic assessment (PEA) and mineral resource estimate on the company's Bucko Lake nickel mine, outlining a 13-year project with average annual production of 7.8 million lb. of nickel. The mine, located 110 km southwest of Thompson, Man., near the Town of Wabowden. is estimated to have average cash costs and all-in sustaining costs (AISC) per pound of nickel of $6.57 and $8.68, respectively. The PEA estimates a cumulative production of 101 million lb. of payable nickel over the course of its life. "The project represents one of the more advanced, higher grade nickel sulphide projects in North America and benefits from existing infrastructure," said Kevin Zhu, CEO of CaNickel, in a news release.
"With demand and prices now surging for Class 1 nickel sulphide on the back of increased demand in electric vehicle batteries, production at the Bucko Lake mine appears to be economically feasible once again."
According to the resource estimate, Bucko Lake contains 5.7 million measured and indicated tonnes grading 1.24% nickel (using a 0.7% nickel cut-off grade) and 0.11% copper for contained metal content of 156.3 million lb. of nickel and 13.4 million lb. of copper.
Additional inferred resources total 10.6 million tonnes grading 1.18% nickel (using a 0.7% nickel cut-off grade) and 0.13% copper for contained metal content of 275.6 million lb. of nickel and 31.2 million lb. of copper.
Using a nickel price assumption of $13.18 per lb., the project generates an after-tax net present value (at a 6% discount rate) of $169 million and an internal rate of return of 30%.
Initial capital costs of $87 million (including $11 million contingency) will be paid back in 3.3 years.