Western Areas Evaluates Odysseus Deposits
The PFS estimates pre-production capital expenditure for Odysseus development at A$190 million to A$210 million, including costs for the PFS, the definitive feasibility study, and contingency costs. Low near-term capital requirements of A$7 million for calendar year 2017 and A$34 million for 2018 provide optionality on further commitments.
Western Areas currently produces nickel concentrate at it Forrestania operations in southern Western Australia, with production during its fiscal year to June 30, 2017 forecast at 22,000 to 23,000 mt of nickel in concentrate. Development of mining on the Odysseus deposits represents an opportunity for the company to open a second production center.
Previous operations at Cosmos produced more than 127,000 mt of nickel in concentrate from 2000 to 2012. The Odysseus South and North deposits are located 1,000 m below surface and will be accessed via an extension of the existing Cosmos decline, starting at about 600 m below surface. The mined-out Cosmos mine will require dewatering to access the takeoff point for the extension of the decline.
The existing Cosmos processing plant will be refurbished at an estimated cost of A$6.2 million and is rated at 430,000 mt/y for disseminated ore, which is sufficient to handle Odysseus mine output for the first 12 months of operations. During the latter half of the first year of operations, the processing plant will undergo an expansion to accommodate mine output of 750,000 mt/y. The expansion will be achieved by the introduction of a secondary crusher, reconfiguring the existing grinding mills, and adding flotation capacity at a total cost of A$21.5 million.
Planning for development of the Odysseus project is based on 7.3 million mt of indicated and inferred JORC-compliant resources at a grade of 2.4% nickel, for 174,000 mt of contained nickel.