Nickel miner Western Areas will progress plans to develop a new deposit at its mothballed Cosmos project, after today revealing a $210 million capex to bring the mine into production.
Perth-based Western said it would spend between $190 million and $210 million to develop the Odysseus deposit, which would have an initial mine life of 7.5 years and produce an average 12,000 tonnes per annum of nickel in concentrate.
The undeveloped nickel deposit forms part of the Cosmos project in the Agnew Wiluna belt, which Western acquired from Glencore in 2015 for $24.5 million.
The project was mothballed at the time of purchase.
The acquisition included existing operating infrastructure, being a 430,000tpa concentrator, a sag mill and an accommodation village.
Western’s plan to develop Odysseus involves nearly doubling the processing facility’s capacity to 750,000tpa and developing the pit by using a ‘bottom up’ mining method, whereby the miner would put the decline down to the bottom of the orebody and mine its way up to the surface.
These two factors make up the majority of the project’s development capex.
Western plans to undertake a definitive feasibility study on the project in the second quarter of the year, with completion expected in the first three months of 2018.
“The positive results from the PFS, combined with the recent drilling success achieved within 18 months of acquisition, demonstrate Western Areas’ ability to accelerate and deliver value from the Cosmos acquisition,” managing director Dan Lougher said.
“Odysseus represents Western Areas’ next mining operation and the results presented today show that a significant nickel operation can be established for substantially less capital outlay than a stand‐alone greenfields development.
“Being a conventional underground nickel sulphide project, it is a great fit with our core skills and experience in hard rock underground mining and conventional nickel flotation at Forrestania.”
Western shares were unchanged at $2.31 each at the close.
