Average annual (metal equivalent) production rates in the first decade of the mine life are forecast to total 21,293 tonnes a year of nickel and 4,366 tonnes of cobalt. Capex, including a contingency, is forecast to come in at about $1.83 billion. Average annual post-tax free cash flow is estimated at $306 million on revenues over the life of mine of $16.3 billion, based on $24,200 per tonne nickel (inclusive of sulphate premia); $59,200 per tonne cobalt; and $1,500 per kilogram of scandium oxide.
At an 8% discount rate, Sunrise is expected to generate a post-tax net present value of $1.21 billion, a post-tax internal rate of return of 15.4% and pay back the capex in just over five years.
The Northern Miner recently caught up with Clean TeQ’s Melbourne-based CEO Sam Riggall, and asked him for an update on the project and his outlook for nickel and cobalt markets.
The Northern Miner: An integrated Clean TeQ/Fluor engineering team completed a project execution plan for the Sunrise project late last year. How far along are you with the project now?
Sam Riggall: The project is permitted and ready to commence development. We delivered the Project Execution Plan in September 2020, which updated the definitive feasibility study (DFS) with a significant amount of engineering — in fact, we’ve spent about A$70-A$80 million (US$53-61 million) in the past 18 months —to ensure we’ve front-end loaded the project for successful delivery. Construction will take about three years. So the focus now is on financing. We have a strong consortium of international banks on the debt side, targeting gearing of about 50% for the project.
