Project Summary

RNC’s Dumont Nickel Project is one of the world’s largest undeveloped, permitted and shovel ready nickel sulphide deposits. Dumont is a mammoth deposit located near the town of Amos, in the municipalities of Launay and Trécesson, in the established Abitibi mining camp in the mining-friendly Canadian province of Québec. When in production, it is expected to rank as the fifth-largest nickel sulphide operation in the world by annual production – only the mining operations at Norilsk (Russia), Jinchuan (China), Sudbury (Ontario, Canada), Voisey’s Bay (Newfoundland and Labrador, Canada) will be larger.

Dumont Expected to Be Among Largest Nickel Sulphide Operations
(RNC 105ktpd (LOM) vs. 2012 production for other projects) (Mlbs/year)

properties-graph

The Dumont deposit contains approximately 6.9 billion pounds of nickel in the proven and probable reserve categories (a proven and probable reserve of 1,177 million tonnes at 0.27% nickel) and 9.75 billion pounds of nickel resources in the measured and indicated category (a measured resource of 372 million tonnes at 0.28% nickel and an indicated resource of 1.29 billion tonnes at 0.26% nickel). In the inferred resource category there is approximately 2.9 billion pounds of nickel (500 million tonnes at 0.26% nickel). Once in operation, the mine will produce nickel for over 30 years. Construction and operation of the mine and processing facilities will be made easier by the existence of excellent infrastructure, including roads, rail and access to low-cost power.

Ores from the mine will be processed using proven, conventional methods into a high-grade nickel concentrate, and then transported for further refining elsewhere. The mine will have no acid-generating rock or tailings, which has beneficial implications for environmental management.

Economic Analysis (June 17, 2013)
Parameter Pre-Tax After Tax
NPV ($ millions @ 8%) $2,003 $1,137
IRR 18.7% 15.2%
Simple Payback Period (years) 6.1
Operating Summary
Production Units 52.5 ktpd
2016-2020
105 ktpd
2021-20361
Stockpile
2036-2049
Total
Ore Mined2 Mt 225 954 1,179
Strip Ratio2 Waste: Ore 0.75 1.22 1.13
Ore Milled Mt 84 592 503 1,179
Ore Grade % Ni 0.34 0.28 0.24 0.27
Recovery 53% 48% 34% 43%
Nickel in Concentrate MM lbs 331 1,757 895 2,983
Annual Production (Contained Metals in Concentrate)
  Units 52.5 ktpd
2016-2020
105 ktpd
2021-20361
Stockpile
2036-2049
Average
Nickel3 MM lbs (kt) 73 (33) 113 (54) 68 (31) 90 (41)
Cobalt MM lbs (kt) 2 (1) 4 (2) 3 (1) 4 (2)
PGE Oz (000s) 15 23 16 19
Operating Revenue and Costs
  Units 52.5 ktpd
2016-2020
105 ktpd
2021-20361
Stockpile
2036-2049
Average
NSR4 $/t $30.90 $22.63 $13.67 $19.40
Mine5 $/t $5.98 $5.53 $0.69 $3.50
Process $/t $4.56 $4.28 $4.28 $4.30
G&A $/t $0.85 $0.50 $0.37 $0.47
Site Costs $/t $11.39 $10.31 $5.34 $8.27
Net C1 Cash Costs $/lb $4.01 $4.54 $3.97 $4.31

12036 is a transition year with expit operations being completed by end of Q2 2036.
2Totals include pre-stripping of 55 Mt, including 21 million tonnes of ore and 34 million tonnes of waste before mill production commences.
3Average annual nickel production over the 20-year mine life is 47 ktpa (104 Mlbs/yr)
4NSR value over 20-year mine life is $23.66 per tonne of ore.
5Excludes $55 million for re-handling of 103 million tonnes of stockpile material during mine life.

Key Assumptions1
Parameter 2015 2016 2017 Long Term
Nickel Price ($ per pound) $9.50 $10.00 $10.50 $9.00
US$/CDN$ Exchange Rate $0.95 $0.95 $0.90 $0.90
Platinum Price ($ per ounce) $1,800 $1,800 $1,800 $1,800
Palladium Price ($ per ounce) $700 $700 $700 $700
Cobalt Price ($ per pound) $14 $14 $14 $14
Electricity (CDN$ per kilowatt hour) $0.0445 $0.0445 $0.0445 $0.0445
Oil ($ per barrel) $90 $90 $90 $90

1Price assumptions for nickel, cobalt, platinum and palladium based on average forecasts for group of five institutions currently covering RNC where published forecasts are available (four of five analysts for long-term nickel price as of April 25, 2013). Oil price assumption based on Thomson Reuters’ analyst consensus estimates.

 

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