Ground Breakers: Does Canadian giant First Quantum see tier 1 potential in this Pilbara nickel project?

First Quantum (TSX:FM) to acquire up to 70% of Raiden Resources’ (ASX:RDN) Mt Sholl Ni-Cu-PGE project in the Pilbara
Mt Sholl largest, only open-pittable, nickel-copper-PGE sulphide resource in the district
First Quantum currently #6 global copper miner, soon to be a top 10 nickel producer
Meanwhile, IGO’s recent nickel acquisitions can get in the bin

C$6.7bn capped First Quantum (TSX:FM) continues to increase its nickel exposure with the acquisition of up to 70% of Raiden Resources’ (ASX:RDN) Mt Sholl Ni-Cu-PGE project in the Pilbara.

The world’s #6 copper miner produced 775,859t of copper, 22,000t nickel and 110,000oz gold in 2022 from operations in Spain, Turkey, Zambia and WA.

While its near-term goal is 1mtpa of copper production, the company is also bolstering its nickel exposure to feed to energy transition.

Source: First Quantum

Its emerging 30,000t Enterprise mine in Zambia, along with the established Ravensthorpe operation, will place First Quantum as a top 10 global nickel producer.

RDN, currently focused on lithium adjacent to Azure’s giant Andover discovery, says the deal comes after a 12-month due diligence period.

To earn 70% equity, First Quantum’s Aussie arm FQMA is required to sole fund minimum $25m over eight years on exploration and project studies, all the way up to a decision to mine.

RDN would also receive $10m in staged cash payments throughout the eight-year exploration cycle.

What does First Quantum like about Mt Sholl?

Until lithium stole the limelight, RDN’s main game was Mt Sholl, where a maiden resource of 23.4Mt at 0.60% nickel equivalent or 1.54% copper equivalent was released in April.

It is the largest, and currently the only open-pittable, nickel-copper-PGE sulphide resource in the district, 40km from port.

Source: RDN

An additional JORC exploration target for the project is defined at 80–150Mt at a grade range of 0.45%–0.75% Ni_Eq or 1.15%–1.95% Cu_Eq.

There’s a lot of value at Mt Sholl that will be realised once nickel as a commodity comes back into focus, RDN MD Dusko Ljubojevic said early September.

“Mt Sholl is a great project,” he says.

“We believe this mineralisation going to come out of the ground at some point, whether we do it or somebody else does it – it’s not going to sit there forever.”

IGO’s Western Area acquisition a confirmed dud

Major nickel-lithium miner IGO (ASX:IGO) says a new mechanised materials handling system for the brand new Cosmos mine will be binned in favour of an ore-trucking operation as it completes a review into the mine’s future.

IGO advises that it is likely to record a further impairment against the Cosmos assets in the company’s first half FY24 results.

The Cosmos development cornerstoned IGO’s ill-fated $1.3m takeover of WA nickel play Western Areas in 2022.

In July it booked an impairment of between $880m and $980m on the value of the Western Area assets due to higher capital and operating costs, challenges to the mine production schedule, and delays in development at Cosmos.

Initial guidance had Cosmos producing first concentrate from its 1.1Mtpa plant last quarter at a capital cost of $795m and $825m.

Separately, IGO was recently forced to “declassify” its 11,000t Silver Knight deposit because the highly oxidised sulphide mineralisation could not be processed at the nearby Nova operation.

The miner bought Silver Knight from Mark Creasy in 2021 for $45m.


 

How are the miners performing today?

A strong session for miners so far, with Materials dragged 0.44% higher by iron monsters BHP (ASX:BHP), FMG (ASX:FMG) and Rio (ASX:RIO). Gold stocks lagged as prices for the precious metal continue to fall sharply from recent all-time highs.

Materials is now up +5% over the past month, only lagging the Real Estate, Health Care and IT Sectors.

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