Queensland Pacific Metals Ltd (ASX:QPM) has formally committed to increase the scale of the TECH Project by at least two times from what was originally contemplated in the Pre-Feasibility Study (PFS) after receiving significant nickel and cobalt off take interest.
Initial consideration of increasing the scale of the TECH Project from the PFS size (0.6M wet tpa) was driven by discussions with potential offtakers and the respective MoSs signed with LG Chem and Samsung SDI. From these discussions, it was evident to QPM that increasing production of key battery metals nickel and cobalt would increase the appeal of the TECH Project to offtakers.
CEO, Stephen Grocott, said the TECH Project will now be scaled up to process 1.2 – 1.5M wet tpa ore, with the final sizing to be determined by the Definitive Feasibility Study.
The increase in size will also allow QPM to benefit from large economies of scale, which will improve the capital efficiency and project economics of the TECH Project.
When considering the size of the TECH Project, QPM wanted to ensure that the associated capital expenditure was still manageable from a financing perspective.
QPM currently has an ore supply agreement with Societe des Mines de la Tontouta (SMT) and Societe Miniere Georges Montagnat S.A.R.L (SMGM) for 0.6M wet tpa over a 10 year period with a five year option on agreement.
The company has been assessing additional ore supply opportunities, including from its own Sewa Bay project. QPM is confident that it can secure the additional ore supply required to feed the larger scale TECH Project. The limonite ore (the top half of nickel laterite ore bodies) being targeted by QPM has limited processing options apart from the problematic high pressure acid leach technology. Therefore, resources are generally well in excess of demand.
With the finalisation of the scale of the TECH Project and advancement in project approvals and technical work streams, QPM has prepared an updated project schedule as shown below. First production is targeted for 2023.
The plant design remains a single leaching train flowsheet and so construction time is unaffected by the doubling of production capacity.
We continue to clear obstacles and create value-add opportunities,” Mr Grocott said.
“The work over the last few months has created an even more attractive and optimal development path. We look forward to undertaking the DFS and putting together the required commercial arrangements that we need to make the TECH Project a reality. 2021 is shaping up as a busy and exciting year for QPM and its shareholders.”