PFS Confirms Technically And Economically Robust Refining Process
Blackstone Minerals Limited (ASX:BSX) has completed the PFS for the development of a Downstream Refinery at the Ta Khoa Refinery Project in Northern Vietnam.
1. Base Case – Post-tax NPV8 of US$2.01 bn and internal rate of return (IRR) of 67%
2. Spot Case – Post-tax NPV8 of US$3.51 bn and internal rate of return (IRR) of 98%
The PFS is a critical milestone for the company and reiterates the competitive advantages of nickel sulphide projects and adding value via an integrated downstream processing strategy. The PFS demonstrates that a very low capital intensity is required for the TKR to produce Class I nickel at a scale that would make Blackstone a globally significant producer.
The PFS considers a refinery design to process up to 400ktpa (Base Case) of nickel concentrate, confirming a technically and economically robust flow sheet to upgrade nickel sulfide concentrate to produce battery grade NCM811 Precursor for the Lithium-ion battery industry.
Blackstone’s development strategy is supported by using 3PF to supplement nickel concentrate supply from the Ta Khoa Nickel Project. Concentrate feed from Blackstone’s Ban Phuc Disseminated Sulfide (DSS) orebody forms part of the overall concentrate blend. With ongoing drilling and further exploration success Blackstone believes the Base Case Refinery has the potential to be fed entirely by feedstock from the Ta Khoa Nickel Project.
Managing Director, Scott Williamson, said the company’s decision to proceed with the development of the Ta Khoa Refinery is contingent upon a number of factors including but not limited to future exploration success at Blackstone’s flagship Ta Khoa Mine, the ability to secure offtake for 3PF and consumer demand for battery grade NCM811 Precursor. Indicative quantum and concentrate specifications have been received from all 3PF concentrate Blackstone has included in this PFS for the Base Case TKR. Based on current and confidential discussions, BSX believes it can secure sufficient supply to meet the demand for the Base Case TKR.
The company intends to develop and fund the construction of the TKR via a collaborative partnership-based model. Blackstone’s intention is to retain a significant interest in the TKR and expects that its portion of funding will be met through a combination of debt, equity, and offtake financing.
Blackstone has commenced funding discussions with multiple potential partners, including NCM consumers and concentrate suppliers to jointly participate in the funding of the proposed refinery. Further, Blackstone has been approached by a number of financial advisors interested in supporting Blackstone’s funding strategy.
The company is immediately progressing approval to commence the next phase of Definitive Feasibility Studies and pilot plant testing (in Vietnam) and is currently targeting a Final Investment Decision (FID) in CY2022.
Mr Williamson said the company’s strategy to build a downstream refinery in Vietnam is amid a very supportive ESG, macroeconomic and fiscal backdrop. The electric vehicle revolution has accelerated demand for green nickel and the delivery of the PFS is an important milestone towards achieving Blackstone’s vision to integrate lithium-ion battery supply chains and enable a green solution from mine to consumer.
“The Base Case PFS financial outcomes are compelling based on an NCM811 Precursor price forecast that is conservative compared to current observable market rates. The internal rate of return on capital invested is exceptional for the Base Case, owing to very low capital intensity, a significant premium available when upgrading nickel sulfide concentrates into battery grade NCM811 Precursor and the competitive operating advantages in Vietnam, which include access to low-cost renewable hydro power.”
“Blackstone is very pleased by the level of collaboration with the Vietnamese Government to progress the Company’s downstream refinery. As part of the PFS Blackstone completed a location study to identify preferred Refinery locations, with each of the shortlisted potential Refinery locations offering significant corporate tax incentives. The corporate tax incentives offered are a strong signal for the Vietnamese Government support for Foreign Direct Investment and Blackstone’s downstream refinery strategy.”
“The Base Case Refinery represents Management’s view of the scale of operations that could over time, through exploration success, be supported by the Company’s existing nickel sulphide mineralised landholdings. Economics have been presented assuming a ten-year life-of- operations, aligned with known and desired life-of-mine for 3PF concentrate sources that Blackstone aims to secure offtake. Management considers the more likely scenario is that the Refinery life will extend beyond ten years.”
The next key steps to progress the Ta Khoa Refinery Project include:
- Pre-feasibility Study for the Upstream Business Unit
- Completion of the Ta Khoa Refinery Definitive Feasibility Study
- Phased construction of a pilot plant in Vietnam to produce NCM811 Precursor and ensure product meets consumer specification
- Continued aggressive drilling to increase mineral resources at the Company’s flagship Ta Khoa Nickel Project
- Secure offtake for 3PF
- Final Investment Decision
- Detailed Engineering and Construction
- NCM811 Precursor production currently targeted in 2024.
For further information please visit: https://www.blackstoneminerals.com.au/