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Blackstone Minerals (OTC:BLSTF) (ASX:BSX) is pursuing the development of the district-scale Ta Khoa Nickel Project through a vertically integrated strategy which entails an upstream project (Ta Khoa Nickel Project aka TKNP) and a downstream project (Ta Khoa Refinery Project aka TKR), along with arrangements to secure further upstream supply for the refinery and to develop a distribution/sales network for the refinery's projected NCM Precursor products.
The upstream project involves the exploration and advancement of several nickel prospects, foremost the Ban Phuc disseminated sulfide (DSS) deposit, but also the underground massive sulfide vein (MSV) deposits at Ban Chang and King Snake. The key objective of the upstream project is to provide a reliable supply of feedstock for Blackstone's planned refinery. A beneficiation plant is expected to receive ore not only from Ban Phuc but also from the underground MSV deposits at Ban Chang and King Snake. Initially, an existing 450,000 tpa concentrator plant is planned to be utilized until a new 8 million tpa facility is constructed as presented in the PFS.
The downstream project is comprised of the development of a refinery capable of refining nickel-cobalt concentrate into high-value NCM (nickel-cobalt-manganese) Precursor products. Feedstock from the upstream project is expected to satisfy about half the refinery's capacity with the remainder being sourced from third parties, some of which are expected to be found through an arrangement with Trafigura, a significant global trader of physical commodities, including nickel, copper, cobalt, zinc and lead.
Blackstone's partnership model should facilitate management's integrated approach. Strategic investments, agreements and arrangements are being made to help secure nickel concentrate feed for the refinery from third parties (front-end) and to help build solid relationships with Asian manufacturers of cathodes, batteries and EVs so that the company's NCM Precursor products can be sold readily (back-end).
Developmental Milestones
Blackstone Minerals has achieved two very significant milestones for the Ta Khoa Project, namely the release of the PFS for the upstream project (TKNP) & the integrated project in late-February 2022 and a Mineral Resource upgrade in late-December 2021. Previously, in July 2021, a PFS for the downstream refinery (TKR) was completed that concerned the construction of a refining facility with the capacity to process 400,000 tpa of nickel concentrate feedstock into battery-grade NCM Precursor products.
In addition, Blackstone Minerals has embarked on a pilot plant testing program to fine-tune the process of manufacturing NCM Precursor products, which entails laterally mining approximately 1,000m through the Ban Phuc DSS ore body for bulk sample material. This underground mine development commenced in early-December 2021.
Also, strategic investments were made in NICO Resources Limited and Corazon Mining Limited to help ensure the supply for nickel concentrate for the Ta Khoa Refinery Project.
On February 28, 2022, Blackstone Minerals announced the completion of a Pre-Feasibility Study (PFS) for the upstream portion of the Ta Khoa Nickel Project, which also integrated the results of the PFS for the downstream project.
To better understand the PFS, First we will examine the economics of the upstream PFS and then the PFS on the integrated Ta Khoa Nickel Project.
PFS for Upstream Mining Project
The February 2022 PFS enlarged the magnitude of the mining project, including the construction of an 8Mtpa processing facility, instead of the 4Mtpa base case in the October 2020 Scoping Study. Consequently, the pre-production capex increases 15.6% from $314 million to $363 million resulting in ore feedstock to rise 104% to 64.5 MT from 31.6 Mt. Though the expected recovery rate declines from 65.9% to 57.0%, the expected production of nickel expands 39.5% to 151kt from 108kt in the Scoping Study. The capital payback period contracts from 2.5 to 1.8 years.
