MLX 0.00% 24.0¢ metals x limited

wingellina scoping study results

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    Level 3 Hyatt Centre, 123 Adelaide Terrace, East Perth WA 6004 ¡ñ GPO Box 2606 Perth WA 6001
    Telephone: +61 8 9220 5700 ¡ñ Facsimile: +61 8 9220 5757 ¡ñ Email: [email protected] ¡ñ Web:

    WINGELLINA ¨C Scoping Study Results
    Metals X announced its updated Identified Mineral Resource estimate for its Wingellina
    Nickel ¨C Cobalt Limonite deposit to the ASX on March 16, 2007 This reported a total
    Identified Mineral Resource Estimate (0.5% cut-off grade) of 213.2 Million Tonnes grading
    0.95% Ni, 0.074% Co and 45.9% Fe2O3 . The categorisation and make-up of the resource
    at various cut-off grades is summarised below:
    0.5% Ni Cut-off Million Tonnes %Ni % Co % Fe2O3
    Measured 56.9 Mt 0.98 0.077 47.9
    Indicated 125.5 Mt 0.94 0.073 45.4
    Inferred 30.8 Mt 0.95 0.070 44.5
    Total 213.2 Mt 0.95 0.074 45.9
    0.7% Ni Cut-off Million Tonnes %Ni % Co % Fe2O3
    Measured 47.6 Mt 1.06 0.083 49.6
    Indicated 100.5 Mt 1.04 0.078 47.4
    Inferred 25.1 Mt 1.04 0.075 46.1
    Total 173.2 Mt 1.04 0.079 47.8
    1.0% Ni Cut-off Million Tonnes %Ni % Co % Fe2O3
    Measured 25.4 Mt 1.23 0.093 52.0
    Indicated 50.0 Mt 1.23 0.087 49.8
    Inferred 11.9 Mt 1.25 0.082 47.1
    Total 86.3 Mt 1.23 0.088 50.1
    It should be noted that a comparatively high percentage 86% of the resource estimate is in
    the Measured and Indicated categorisation under the JORC 2004 code.
    Metals X has now completed a Scoping Study(Product and Economic) on the Wingellina
    Prospect which shows sound economics and the Company will now move to complete a
    detailed feasibility study on the project. The accuracy of the Scoping Study is deemed to be
    12 April 2007
    The Scoping study was performed by expert consultants in the nickel laterite processing
    field, Lixiviant Pty Ltd. Lixiviant¡¯s principal, Stan Kagiannis has relevant design,
    operational and commissioning experience including Cawse Nickel, Worsley Alumina,
    Minara Nickel, Olympic Dam, Kwinana Nickel refinery and Lannjigarh Alumina.
    The study considered two scenarios of mine life, the first being 46 years, effectively mining
    out the Measured and Indicated resources and the second being limited to a 20 year term,
    mining approximately half the known resource.
    The key outcomes of the study are summarised as follows:
    Process Methodology High Pressure Acid Leach (HPAL)
    Product Mixed Nickel-Cobalt Hydroxide
    Optimal Process Rate 4 million ore tonnes per annum
    Assumed Ramp-up - Year 1
    - Year 2
    - Year 3
    - Year 4
    Average mining grades Year 1 - 6
    Year 7 - 16
    Year 17 - 26
    Year 26+
    1.2% Ni, 0.10% Co
    1.1% Ni, 0.085% Co
    1.05% Ni, 0.075% Co
    0.90% Ni, 0.070% Co
    Metal Price Assumptions - Nickel
    - Cobalt
    US$20,000 per tonne
    US$15 per pound
    Metal Recoveries - Nickel
    - Cobalt
    Exchange Rate Assumptions $AUD:$US US$0.78
    46 yr Mine Life 20 yr Mine Life
    Average Annualised Prod¡¯n - Ni (t)
    - Co (t)
    Capital Cost
    Avg. Capital Cost US$/pound Ni¨Cequiv.
    A$1.682 Billion
    $US 0.36/lb
    $US 0.77/lb
    Operating Cost ¨C average $A p. annum
    Avg. Oper. Cost $US/tonne Ni ¨C Equiv.
    Avg. Oper. Cost $US/pound Ni -Equiv.
    Avg. Oper. Cost $US/pound Ni ¨Cafter Cobalt
    A$477 Million
    $US 10,300/t
    $US 4.67/lb
    $US 3.58/lb
    A$ 480 Million
    US$ 9,600/t
    $US 4.37/lb
    $US 3.26/lb
    Total Prod¡¯n Cost $US/tonne Ni ¨C Equiv.
    $US/pound Ni - Equiv.
    Total Prod¡¯n Cost $US/pound Ni ¨C after
    Cobalt Credits
    US$ 11,100/t
    US$ 5.03/lb
    $US 3.94/lb
    US$ 11,300/t
    $US 4.03/lb
    Est. Avg. Oper. Surplus ¨C A$ p. annum A$ 330 Million A$ 390 Million
    Est Avg. Prod¡¯n Surplus ¨C A$ p. annum A$ 293 Million A$ 305 Million
    NPV (8% nominal) ¨C Pre- Tax A$ 5.29Billion A$ 4.23Billion
    IRR 34.1% 34.0%
    12 April 2007
    The Scoping study has been performed at a flat nickel price of US$20,000 per tonne and a
    flat Cobalt price of US$ 15 per pound. These prices are only 40% of the current spot
    metal prices but are considered to be more appropriate long-term prices for the metal
    given the long project life and gestation period of up to 4 years before production could
    To understand the upside impact, at the current spot price of US$50,000 the
    NPV (8% nominal) ¨C Pre-Tax is A$21.5 Billion with an IRR of 94.8%. On the downside
    scenario, a similar estimate of these financial measures at US$15,000 per tonne for Nickel
    gives an NPV of A$2.6 Billion with an IRR of 22.2%.
    Metals X announced on March 20, 2007 that it had formed a strategic alliance with China¡¯s
    largest nickel producer, Jinchuan Group Limited (¡°Jinchuan¡±) to advance the development
    of Metals X¡¯s mineral assets, in particular the Wingellina Prospect.
    As was previously announced, Jinchuan has agreed subject to Chinese Government
    regulatory approvals to make a $32.76 million placement in Metals X to provide working
    capital for the company to advance its mineral assets. Jinchuan will own 13% of the
    expanded share capital of the Company and will become Metals X¡¯s largest shareholder.
    This transaction is expected to be completed by the end of April.
    Jinchuan will nominate, Mr Wang Wei, their existing Vice President in charge of overseas
    investments, to the Metals X Board to provide assistance and guidance to the Wingellina
    feasibility study. Metals X has conditionally agreed for Jinchuan to take off-take rights to
    the anticipated mixed nickel-cobalt metal hydroxide products from Wingellina.
    Metals X Managing Director Peter Cook said ¡°Jinchuan is a world leader in the
    construction and operation of HPAL nickel processes. They have huge capacity and
    technical capability and we look forward to their support and guidance in bringing
    Wingellina to fruition. If this can be achieved, Wingellina will be a large long-life nickelcobalt
    mine to rival that of Murrin Murrin and Ravensthorpe¡±
    Enquiries: Peter Cook
    Managing Director
    Ph: +61-8-92205700
    [email protected]
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