11:25:48 EST Fri 06 Dec 2019
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Royal Nickel Corp
Symbol RNX
Shares Issued 552,155,748
Close 2019-07-11 C$ 0.58
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Royal Nickel files NI 43-101 Dumont FS report

2019-07-11 10:38 ET - News Release

Mr. Mark Selby reports


Royal Nickel Corp. (RNC Minerals), in its capacity as manager of the Dumont joint venture with Arpent Inc., a subsidiary of Waterton Precious Metals Fund II Cayman LP and Waterton Mining Parallel Fund Offshore Master LP, has filed the full National Instrument 43-101-compliant technical report for the Dumont nickel-cobalt project under RNC Minerals' profile on SEDAR and on RNC Minerals' website. (All amounts are expressed in U.S. dollars unless otherwise indicated.)

"With the filing of the positive feasibility study, RNC, with our partner Waterton, are well positioned to accelerate discussions with potential partners to advance the Dumont project towards construction," said Mark Selby, president and chief executive officer of RNC Minerals. "Once in production, Dumont will be one of the largest base metal mines in Canada, one of the top five sulphide nickel producers globally and one of the only large-scale, fully permitted nickel-cobalt projects that can begin to satisfy the significant growth in nickel and cobalt demand driven by the electric vehicle sector."

The previously announced highlights from the feasibility study are listed as follows.

Dumont 2019 feasibility study highlights:

  • Large-scale, low-cost, long-life project:
    • Initial nickel production in concentrate of 33,000 tonnes per year, ramping up to 50,000 tonnes per year in phase II expansion -- production of approximately 1.2 million tonnes (2.6 billion pounds) of nickel in concentrate over a 30-year life with an initial capital expenditure of $1-billion;
    • Phase I C1 cash costs of $2.98 per pound ($6,570 per tonne); life-of-mine C1 cash costs of $3.22 per pound ($7,100 per tonne) nickel and AISC (all-in sustaining cost) of $3.80 per pound ($8,380 per tonne) of payable nickel (low second quartile of cash cost curve);
  • Significant earnings and free cash flow generation support strong project economics:
    • $920-million after-tax net present value (8 per cent) and 15.4-per-cent after-tax internal rate of return;
    • Estimated annual EBITDA (earnings before interest, taxes, depreciation and amortization) ramping up from $303-million in phase I to $425-million in phase II and averaging of $340-million over the life of project; free cash flow averages $201-million annually over the 30-year project life;
  • Top-tier mining asset in excellent jurisdiction:
    • Second-largest nickel reserve in the world of 2.8 million tonnes (6.1 billion pounds) contained nickel and ninth-largest cobalt reserve with 110,000 tonnes (243 million pounds) contained cobalt;
    • Once in production, a top-five nickel sulphide operation globally, a top-three Canadian base metal asset and one of largest battery metal development projects globally;
    • Fully permitted, construction-ready project located in Abitibi region in Quebec -- one of world's leading mining jurisdictions;
    • Impacts and benefits agreement successfully negotiated with local first nation.

The study has also identified opportunities to significantly increase the return of the project:

  • Implementation of autonomous truck fleet;
  • Larger-scale initial project phase of 75,000 tonnes per day;
  • Sale of magnetite byproduct.

                    PROJECT, QUEBEC, PENSWICK, MAY 30, 2019*


Category             Tonnes            Ni          Co           Pd           Pt
                      (000s)          (%)        (ppm)        (g/t)        (g/t)

Proven              163,140         0.33          114        0.031        0.013
Probable            864,908         0.26          106        0.017        0.008
Total             1,028,048         0.27          107        0.019        0.009

                                   Contained metal

                         Ni           Co           Pd           Pt
Category               (Mlb)        (Mlb)    (000s oz)    (000s oz)

Proven                1,174           41          162           67
Probable              4,908          202          466          220
Total                 6,082          243          627          287

* Reported at a cut-off grade of 0.15 per cent nickel inside an engineered 
pit design based on a Lerchs-Grossmann (LG) optimized pit shell using a 
nickel price of $4.05 (U.S.) per pound, average metallurgical recovery of 
43 per cent, marginal processing, general and administrative costs of 
$4.10 (U.S.) per tonne milled, long-term exchange rate of $1 to 75 U.S. 
cents, overall pit rock slopes of 40 degrees to 50 degrees depending on the
sector, and a production rate of 105,000 tonnes per day. Mineral reserves 
include mining losses of 0.33 per cent and dilution of 0.43 per cent that 
will be incurred at the contact between mineralization and waste. The 
proven reserves are based on measured resources included within run-of-mine 
(ROM) mill feed. Probable reserves are based on measured resources included 
within stockpile mill feed plus indicated resources included in both ROM 
and stockpile mill feed. All figures are rounded to reflect the relative 
accuracy of the estimates.

NI 43-101 compliance

Unless otherwise indicated, RNC Minerals has prepared the technical information contained in this news release based on information contained in the feasibility study dated July 11, 2019, relating to the Dumont nickel-cobalt project, available under RNC Minerals' company profile on SEDAR. The feasibility study was prepared by or under the supervision of a qualified person as defined in NI 43-101, Standards of Disclosure for Mineral Projects, of the Canadian Securities Administrators. Readers are encouraged to review the full text of the feasibility study that qualifies the technical information. Readers are advised that mineral resources that are not mineral reserves do not have demonstrated economic viability. The feasibility study is intended to be read as a whole, and sections should not be read or relied upon out of context. The technical information is subject to the assumptions and qualifications contained in the feasibility study.

The technical information has been prepared under the supervision of Alger St-Jean, PGeo, vice-president, exploration, of RNC Minerals and Johnna Muinonen, vice-president, nickel, of RNC Minerals, both qualified persons under NI 43-101.

About Royal Nickel Corp. (RNC Minerals)

RNC Minerals has a 100-per-cent interest in the producing Beta Hunt gold mine located in Western Australia, where a significant high-grade gold discovery, the Father's Day vein, was made. RNC Minerals has a 100-per-cent interest in the Higginsville gold operation in Western Australia, which comprises a low-cost 1.3-million-tonne-per-year gold mill and a substantial portfolio of gold tenements. In addition, RNC Minerals owns a 28-per-cent interest in a nickel joint venture that owns the Dumont nickel-cobalt project located in the Abitibi region of Quebec, which contains the second-largest nickel reserve and ninth-largest cobalt reserve in the world. RNC Minerals also owns a 24-per-cent interest in Orford Mining Corp., a mineral explorer focused on highly prospective and underexplored areas of Northern Quebec.

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