Targeting EV’s With Production Of High-Grade Nickel Concentrate
Giga Metals Corp. (TSXV: GIGA) has revealed the results of a preliminary economic assessment (PEA) for the Turnagain Nickel-Cobalt Project in British Columbia, Canada.
The PEA is an update of the 2011 PEA confirming the ability of Turnagain to produce high-quality nickel concentrate, such as that needed to make pure nickel products for the electric vehicle (EV) market, in a socially and environmentally responsible manner.
Giga Metals’ primary driver for this update was to deliver a reliable and comprehensive PEA incorporating all project-related components for use for discussion with strategic investors, for targeting improvement opportunities, and to serve as a base for future engineering studies.
The PEA indicates a long-life, large-scale project. With a projected build capital of US$1.4 billion (Phase 1) and US$0.5 billion (Phase 2) including significant investment for a powerline delivering low-cost, clean, low-carbon power from BC Hydro (mainly hydroelectric), the projected capital intensity is US$51,500 per annual tonne nickel at full rates (years six to 20).
At full rate (years six to 20), the project is expected to deliver 37,149 tonnes per year of nickel in a high-grade nickel concentrate at an operating cost of US$3.20/lb nickel before by-product credits at the plant gate (all production data are metal in produced concentrate), or US$3.04/lb nickel after credits and shipping (in concentrate, delivered CIF Asia port).
At metals prices of U.S. $7.50 per pound of nickel and smelter terms of 78% NSR as provided by analysts Wood Mackenzie, Turnagain is expected to have a pre-tax IRR of 6.3%. At the environmental, social, and governance (ESG)-premium pricing case, the project is expected to have a pre-tax IRR of 9.4%. The base case pricing is based on a relatively conservative EV demand forecast creating a nickel shortfall after 2030 growing to 1.3 Mt/y by 2040. This projected deficit requires more than 35 Turnagain-scale projects to fill. Based on the resources previously disclosed including 1.07 billion tonnes of Measured and Indicated and 1.1 billion tonnes of Inferred (respectively, 5.2 billion pounds and 5.5 billion pounds of nickel content), the project is expected to operate for at least 35 years, producing 1.2 million tonnes of nickel-in-concentrate at an average grade of 18% nickel and 1% cobalt, comparable to the best nickel concentrates currently produced in the world.