Australia

Cassini Resources confident of West Musgraves future as a low-cost operation

Cassini Resources Ltd (ASX:CZI) managing director Richard Bevan told the RIU Explorers Conference last week that the Nebo-Babel deposit at the West Musgrave project is set to be a low cost operation compared to its peers.

The company recently released the pre-feasibility study (PFS) for the project with joint venture partner OZ Minerals Limited (ASX:OZL) showing a 26 year mine life which would be fairly resilient to any commodity price fluctuations.

Bevan said other drivers behind the low operating costs are the use of renewable power and the fact its a low strip ratio, open pit mine project.

Bevan said: “Most of the nickel mines in Western Australia are higher grade but underground, so West Musgrave works because even though the grade is lower, the mining cost is also a lot lower.

“Our mining cost is around $12-13 per tonne, an underground operation is around $110-130 per tonne, were mining 0.4-0.5 and theyre mining 3-5%, so if you adjust that for cost per pound of nickel produced it actually comes out about the same.”

By product revenue

Bevan said another factor that is often overlooked in the calculation of the C1 cash costs curve is any by product revenue.

He said: “For our deposits we have an equal amount of nickel and copper – for every pound of nickel that we produce we also produce a pound of copper – so were sort of getting that pound of copper for free.

Compared to IGO Ltds (ASX:IGO) Nova-Bollinger deposit, where the ratio is about 2.5 nickel to 1 copper, Cassini is sitting at a 1:1 ratio.

Bevan said: “The ratio of nickel to copper is more favourable in our ore body and that big by product credit keeps our operating costs low on a C1 cash level.”

Load scheduling options

The company has also been quite innovative in the design and powering of the processing plant.

Bevan said: “The project has really lent itself to a great deal of innovation in the grinding and floatation circuit which is allowing us to load schedule and run some of the high intensity equipment, like the grinding mills, at times when weve got lower cost energy from the renewables.”

The project is ideally situated to take advantage of renewable energy options, with the company pushing for 80% renewable power to reduce reliance on expensive diesel.

Bevan said: “Diesels an expensive way to make power, so the site lends itself to renewables.

“Weve actually a wind mast measuringRead More – Source