Royal Nickel (TSE:RNX) plans to advance its Dumont Nickel project, which is estimated to generate $1.1 billion after tax NPV, after receiving a prositive pre-feasibility study.
The company, which made the announcement on Tuesday, expects production to start in 2015.
On Wednesday afternoon Royal Nickel's stock was down 1.27% to 78 cents a share.
The company says there will be a staged development so it can lower cost and risk. Initial capital expenditure of $1.1 billion for 50 ktpd operation is planned. In year five another $0.7 billion of additional capital is planned to increase production to 100 ktpd per year.
Once in full production, Royal Nickel says that the Dumont will be among the top five sulphide nickel assets globally, based on annual nickel production.
"When in production, [Dumont Nickel project] is expected to rank as the fourth-largest nickel sulphide operation in the world by annual production – only the great mining camps at Norilsk (Russia), Sudbury (Ontario, Canada), and Jinchuan (China) will be larger," states the company's website.
Executives are touting that the project is located in the mining-friendly jurisdiction of Quebec, and that the mine will be located close to existing infrastructure.
A feasibility study has already begun. Environmental permitting process should be filed by November 2011, and application to secure industrial electricity rates for the project is expected to be filed before the end of 2011.
"Royal Nickel's pre-feasibility study provides strong validation of the confidence we have maintained in the company since its founding," said Scott Hand, Executive Chairman of Royal Nickel.
"We have a tremendous base metal project in Dumont, and an outstanding management team to advance it. I continue to have every confidence that Dumont is poised to become a world-class nickel producer."