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Royal Nickel delays Dumont commissioning

Keywords: Tags  Royal Nickel, Dumont, nickel, feasibility study, Daniel Fitzgerald

NEW YORK — Royal Nickel Corp. has pushed back the estimated commissioning of its Dumont nickel project in Quebec to the "first half of 2016, followed by production ramp-up throughout 2016."

The Toronto-based company had previously forecast project commissioning in late 2015 (, March 27).

The company expects to achieve the necessary permitting for the project by mid-2014, when it will begin construction. Completion of partnership and financing arrangements are still expected to be finalized in advance of the receipt of permits. The company told AMM last month that it was in discussions with "a number of Japanese mining houses" regarding financing (, May 2).

Meanwhile, the feasibility study completed by Ausenco Ltd. shows that Royal Nickel is forecasting initial nickel production of 73 million pounds annually, increasing after five years to an annual average of 113 million pounds for the remainder of the 20-year mine life. The project is estimated to have an after-tax net present value of $1.1 billion, generating an estimated annual average of $427 million in earnings before interest, tax, depreciation and amortization (Ebitda).

"When in production, Dumont is expected to be one of the largest base metal mines in Canada and one of the top five sulphide nickel producers globally, targeting production of more than $27 billion of nickel over 33 years based on current reserves alone," Royal Nickel president and chief executive officer Tyler Mitchelson said in a statement.

The mine is designed to produce ore at a rate of approximately twice the capacity of the mill, which will serve to mitigate the risk of feed shortages and allow the highest-value material to be processed first. As a result, an ore stockpile will be generated to continue to feed the mill for an additional 13 years at the end of the mine life, with the tailings deposited in the open pit.

Earlier this year, the company signed a memorandum of understanding with Tsingshan Holding Group Co. to help secure supply for a new Tsingshan plant processing sulfide nickel concentrate, with the possibility of an offtake agreement to follow (, March 12).

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