Talon updates Tamarack PEA, increases NPV
An updated preliminary economic assessment released by Talon Metals (TSE: TLO) for the 125-sq.-km Tamarack project, 87 km west of Duluth, Minnesota, suggests a net present value estimate of $291 million, at a 7% discount rate.
When compared with the prior PEA from 2018, increased tonnes in the mine plan and higher mill throughputs (at 2,000 t/d, up from 1,390 t/d) increased the after-tax NPV by 39%.
“The updated PEA demonstrates that by conducting additional metallurgical test work, and thereby adding tonnage into the mine plan (with no additional drilling), the economics associated with the Tamarack North project keep improving significantly,” CEO Henri van Rooyen said in a release.
“Nonetheless, additional opportunities still remain to further increase the tonnage included in the mine plan and consequently, the mine life and production rate.”
The study outlined an underground operation with shaft access and a 2,000 t/d mill, producing nickel and copper concentrates for sale to smelters.
With an initial capital cost of $219 million, an 8-year mine life, 2.82% nickel-equivalent head grade and all-in sustaining costs of $3.57 per lb. of nickel in concentrate, the internal rate of return for the project comes in at 36%.
Under the current processing option, the nickel concentrate would grade 13.3% nickel while the copper concentrate would contain 27.6% copper. Recoveries of the two metals to the sale products are expected at 83.4% and 80.2% respectively.
The PEA recommendations, based on the positive demand outlook for nickel sulphate products from the electric battery vehicle market, include further studies to determine the viability of producing nickel sulphates from Tamarack.
This would eliminate the need to sell concentrates to smelters at a discount.
Current indicated resources at the project stand at 3.6 million tonnes at 2.45% nickel-equivalent with additional inferred resources of 4.4 million tonnes grading 2.11% nickel-equivalent.
The existing resource base is within the Tamarack North portion of the project, which is situated within the 18-km Tamarack Intrusive Complex; the PEA only considers development of a portion of this resource.
Talon has the right to acquire up to a 60% interest in Tamarack; Kennecott Exploration, a subsidiary of Rio Tinto is the company’s joint venture partner. PEA amounts are on a 100% basis.
(This article first appeared in the Canadian Mining Journal)