FPX Nickel Delivers PFS for Baptiste Nickel Project with After-Tax NPV of US$2.01 Billion and 18.6% IRR
Suite 320 – 1155 West Pender Street
Vancouver, BC Canada V6E 2P4
Tel: 604.681.8600
e-mail: [email protected]
FPX Nickel Delivers PFS for Baptiste Nickel Project with After-Tax
NPV of US$2.01 Billion and 18.6% IRR
Vancouver, September 6, 2023 – FPX Nickel Corp. (TSX-V: FPX, OTCQB: FPOCF ) (“FPX” or the
“Company”) is pleased to announce results from the preliminary feasibility study (“ PFS”) for its 100%-
owned Baptiste Nickel Project (“Baptiste” or the “Project”) in central British Columbia, with an after-tax
NPV8% of $2.01 Billion and IRR of 18.6% at $8.75 /lb Ni. The PFS has been prepared in accordance with
National Instrument 43-101 (“NI 43-101”) and demonstrates the potential to develop a high-margin, long-
life, large-scale, and low-carbon mine with unparalleled flexibility to produce either a high-grade
concentrate (60% nickel) for direct feed into the stainless steel industry (the “Base Case”) or further refining
into battery -grade nickel sulphate, cobalt precipitate, and copper concentrate products for the battery
material supply chain (the “Refinery Option”). All amounts are in US Dollars unless otherwise indicated.
Highlights
• After-tax NPV8% of $2.01 Billion and IRR of 18.6% at $8.75 /lb Ni
• 29-year mine life producing an average 59,100 tonnes per year of nickel
• Phased development approach, with expansion following the 3.7-year after-tax payback period
• Life-of-mine (“LOM”) average C1 operating cost of $3.70/lb Ni ($8,150/t), assuming no byproduct
credits
• LOM average annual pre-tax free cash flow of $578 million during operating years
• Strategic product flexibility, with a Base Case high-grade nickel concentrate (60% nickel) for direct
feed to the stainless steel industry, plus a Refinery Option to produce battery-grade nickel sulphate
“The PFS firmly establishes Baptiste as a key strategic asset in the development of Canada’s critical
minerals supply chain ,” commented Martin Turenne , FP X’s President and Chief Executive Officer .
“Despite the inflationary pressures observed in the mining industry in recent years, the study has yielded
after-tax NPV and IRR superior to those observed in the 2020 preliminary economic assessment, reflecting
greater engineering maturity and incorporating the several optimizations identified by our class -leading
project team in regards to resource modelling, mine planning, process recovery , and site design. The
Baptiste project represents a significant opportunity for First Nations, the governments of British Columbia
and Canada, and FPX to work together to develop a project that creates substantial and sustainable benefits
while protecting the environment for future generations. We look forward to continued collaboration with
local Indigenous groups, and the provincial and federal governments to support the development of
Canada’s critical minerals ecosystem and to leverage health, economic and social benefits for local
communities.”
Webinar and Presentation
The Company’s management will host a live webinar on Wednesday, September 6 at 10:00 a.m. Eastern
(7:00 a.m. Pacific) to provide an overview of the P FS results and to answer questions from
participants. Participants can access the live webinar at the following link:
https://www.renmarkfinancial.com/events/renmark-virtual-non-deal-roadshow-tsx-v-fpx-otcqb-fpocf-
2023-09-06-100000
The results of the PFS are summarized in a corporate presentation available on the homepage of the
Company’s website at www.fpxnickel.com.
PFS Overview
The Base Case outlines an open -pit mining project in central British Columbia which will produce an
average of 59,100 tonnes of nickel per year in concentrate over a 29 -year mine life. The project will b e
developed in a phased approach, with an initial mill throughput rate of 108,000 tonnes per day (Phase 1),
followed by an expansion to 162,000 tonnes per day (Phase 2) funded from free cash flow after the initial
after-tax payback period of 3.7 years. The mining strip ratio averages 0.41 in the Phase 1, and 0.56 overall
for life-of-mine (excluding capitalized pre-stripping).
The Project will utilize a conventional processing flowsheet with SAG -mill based grinding followed by
magnetic separation, froth flotation, and a flotation tailings leach circuit , as previously described in the
Company’s June 27, 2023 news release. Overall Davis Tube Recoverable (“DTR”) nickel recovery is
estimated to average 88.7% for the life-of-mine, with 93% of the nickel produced contained in a high-grade
flotation concentrate (60% nickel) and the balance (7% of nickel produced) contained in a mixed hydroxide
precipitate (“MHP”) produced from a tailings leach circuit.
The Project will be supplied with low-carbon power from the BC Hydro provincial electricity transmission
grid, resulting in a n estimated Scope 1 and 2 carbon intensity of 2.4 t CO 2/t nickel produced, placing
Baptiste within the lowest decile of global nickel production. The Project will be accessed by a road system
consisting of upgrades and expansions to an existing forest service road (“FSR”) network. All mine tailings
and waste rock are proposed to be managed within a single integrated facility that will utilize open pit pre-
stripping material and waste rock for embankment construction.
Base Case economics are presented in Table 1, based on a $8.75/lb nickel price.
Table 1 – Base Case Economics
Criteria Units Base Case
Initial Capital Cost USD, millions 2,182
Operating Cost $/t milled 8.15
C1 Operating Cost1 USD /lb Ni 3.70
All-in Sustaining Cost (“AISC”)2 USD /lb Ni 4.17
After-
Tax
NPV8% USD, millions 2,010
IRR % 18.6
Payback Period years 3.7
Mine Life-to-Payback ratio 7.8
NPV-to-Initial Capex ratio 0.92
Annual Free Cash Flow, Pre-Tax3 USD, millions 578
Notes:
1. Exclusive of any byproduct credits.
2. Inclusive of operating cost, sustaining capital, expansion capital, closure capital, and royalties.
3. For production years.
The Refinery Option outlines an off-site refinery to upgrade a portion of nickel-in-concentrate to produce
40,000 tpa of battery-grade nickel sulphate for the electric vehicle battery supply chain, with the balance of
concentrate continuing to be directly supplied to the stainless steel industry. Along with battery-grade
nickel sulphate, this option also supports the valorization of cobalt and copper as refinery byproducts. The
Refinery Option presents incremental capital expenditure of $448 million with an incremental operating
cost of $1.02 per pound of nickel (C1 cost of $0.79/lb Ni, including credits for cobalt and copper
byproducts), resulting in total NPV8% of $2,127 million. Further discussion of the Refinery Option is
contained within the “Refinery Option” section near the end of this news release.
Mining & Mineral Reserves
The Baptiste deposit will be mined as a conventional large -scale truck and shovel operation with up to
60 Mt of material mined per year during Phase 1 and up to 120 Mt of material mined per year during
Phase 2. The mining operation will feature 250 mm blast-hole electric drills, 42 m3 electric excavators, and
300 t haul trucks working on nominal 10 m high benches. A flexible combination of dozers, graders, wheel
loaders, and excavators will form the core of the support equipment fleet.
The mineral resource estimate (effective November 14, 2022, see FPX news release) for the Project is based
on updated drilling from the 2021 season, informing the Baptiste deposit geological model. Taking
advantage of the resource shape and local topography, mining will commence at the south of the deposit
before moving north west and northeast, respectively. This approach provides two distinct advantages
during the initial operating years, including a higher average mill feed grade and a lower mining strip ratio.
This approach allows capital advantages through the deferment of mining equipment to sustaining costs, as
well as a lower mining operating cost during Phase 1.
A summary of the PFS mine plan is presented in Table 2, followed by a chart of tonnage moved and average
mill feed grade throughput for the envisioned mine life (Figure 1).
Table 2 – PFS Mine Plan Summary
Phase 1 Phase 2 Total
Operating Years 1 to 9 10 to 29 29 years
Head Grade, Average (% DTR Ni) 0.135 0.128 0.130
Mill Throughput (tpd) 108,000 162,000 -
Tonnes Milled, Total (Mt) 345 1,143 1,488
Tonnes Waste, Total (Mt)1 141 697 838
Strip Ratio (waste:ore)1 0.41 0.61 0.56
Notes:
1. Excludes capitalized pre-stripping.
Figure 1 – Material Moved and Mill Feed Grade by Year
The Probable Mineral Reserves for the project are estimated at 1,488 Mt at an average grade of 0.13%
DTR nickel (0.21% total nickel), resulting in 1,933 kt of contained DTR nickel metal (3,125 kt of total
nickel metal) over the 29-year mine life. Included in waste material for the PFS are 44 Mt of inferred
material at an average grade of 0.113% DTR nickel.
Table 3 – Baptiste Nickel Project Reserve Estimate
Category Tonnes
(Mt)
DTR
Nickel
(%)
Total
Nickel
(%)
Contained Metal
(kt DTR nickel)
Contained Metal
(kt total nickel)
Proven - - - - -
Probable 1,488 0.13 0.21 1,933 3,125
Proven &
Probable
1,488 0.13 0.21 1,933 3,125
Notes:
1. Mineral Reserves are reported effective September 6, 2023.
2. The Qualified Person for the estimate is Mr. Cristian Hernan Garcia Jimenez, P.Eng, an
independent consultant.
3. Mineral Reserves were developed in accordance with CIM Definition Standards (2014).
4. Mineral Reserves are reported using a fixed 0.06% DTR Ni cut-off grade, which represent
approximately US$9/t NSR value, which is above the economic cut-off grade of US$5.5/t.
5. The Mineral Reserves are supported by a mine plan, based on a pit design, guided by a Lerchs
Grossmann (LG) pit shell. Inputs include $8.75/lb Ni, $1.98/t mining opex, $3.72/t process opex,
$1.10 /t G&A opex, pit slopes varying from 42-44 degrees, and 85% process recovery
6. Life-of-mine strip ratio is 0.56 (W:O), excluding capitalized pre-stripping.
7. Ore and contained nickel tonnes are reported in metric units and grades are reported as
percentages.
8. All figures are rounded to reflect the relative accuracy of the estimate. Totals may not sum due to
rounding as required by reporting guidelines.
Metallurgy & Process Facilities
The PFS metallurgical testwork program involved multiple bench- and pilot-scale campaigns (see FPX’s
June 27, 2023 news release ). The overall processing strategy takes advantage of awaruite’s unique
characteristics in a simple flowsheet utilizing well -proven unit operations, as p resented in Figure 2. The
estimated life-of-mine DTR nickel recovery for the PFS is 88.7%, as presented in Table 4. Based on
average grade of 0.21% total nickel, this equates to a 55% total nickel recovery.
Figure 2 – Baptiste PFS Concentrator Flowsheet
Table 4 – Life of Mine DTR Nickel Recovery
Recovery DTR Nickel
Recovery (%)
By
Processing
Stage
Roughing Magnetic Separation 95.0
Cleaning Magnetic Separation 99.3
Recleaning Magnetic Separation 99.7
Flotation 87.4
Flotation Tailings Treatment 54.8
Overall To Awaruite Concentrate 82.2
To Mixed Hydroxide Precipitate 6.5
Combined To Both Nickel Products 88.7
The process plant will be developed in two phases, with the Phase 1 plant capable of processing 108,000
tpd of ore, and the Phase 2 expansion bringing total processing capacity to 162,000 tpd. Processing facilities
utilize conventional unit operations and configurations in comminution, magnetic separation, flotation, and
tailings leach.
Awaruite
Concentrate
60% Ni
Cleaning
Magnetic Separation
Roughing
Magnetic Separation
Primary Grinding
1st Regrind
Combined
Tailings
2nd Regrind
Recleaning
Magnetic Separation
Flotation
Mixed
Hydroxide
Precipitate
(MHP)
Flotation Tailings Leach &
Dissolved Nickel Recovery
In consider ation of ore grindability, low abrasivity, and low power cost, comminution will consist of
primary gyratory crushing, followed by semi-autogenous (“SAG”) mill and ball mill grinding. Based on
awaruite’s intense magnetic response, a coarse primary grind of 250 m allows approximately 84% of the
fresh plant feed to be diverted directly to final tailings in the primary magnetic separation stage. Followed
by two stages of regrind and cleaner magnetic separation, a further 12% of fresh plant feed is diverted to
final tailings, resulting in a “magnetics only” concentrate consisting of awaruite and magnetite. This results
in a flotation circuit which only needs to treat less than 5% of fresh plant feed.
Flotation utilizes well-defined conditions in conventional mechanical flotation cells. Roughing flotation
followed by four stages of cleaning flotation produces a high-grade nickel concentrate (60% nickel) which
is then dewatered, briquetted, and bagged for sale to market. Flotation tailings are subjected to mild
atmospheric tank leaching conditions to recover nickel not recovered in flotation (approximately 6.5% of
DTR nickel) . Leach solution is purified and nickel is subsequently precipitated to a MHP product
(containing 45% nickel) which is then dewatered and bagged for sale to market.
Other Facilities
The proposed tailings facility design considers management of tailings and mine waste in a single integrated
facility, utilizing open pit pre-stripping material and waste rock for dam construction. Deposition of waste
rock and tailings is considered within the open pit in the final years of operations. The tailings facility will
incorporate cross-valley dams and is situated in close proximity to the open pit, with gravity-flow of tailings
for the first 6 years of operations, followed by the installation of a tailings pumping system in Year 7.
The conceptual site water management plan includes management of site contact water in the tailings
facility with collection of runoff water downstream of all other Project infrastructure/disturbance s. PFS
water balance modelling indicates the site to be in an annual water deficit, requiring a modest allowance
for freshwater makeup during operations, including for potable water requirements.
The Project considers a full suite of on -site infrastructure and ancillaries. Both the construction and
operation phases will be supported by an on-site camp facility.
The Project will connect with BC Hydro’s low-carbon grid, with multiple options having been validated
through a formal BC Hydro study. The PFS considers a 230 kV connection to the Glenannan substation
located to the south of the Project, with a line length of approximately 155 km. The current FSR network
will suitably support the early stages of site construction. The current road network will be upgraded,
including minor expansions, at the end of the first year of construction resulting in reduced travel times to
site. No other off-site facilities are envisioned to be required for the Project.
Project Execution
The Gantt chart presented in Figure 3 summarizes the conceptual project development timeline. The critical
path runs through the environmental assessment (“ EA”) and permitting process, with an anticipated EA
decision in the first quarter of 2027. Approxi mately 9-12 months off the critical path are engineering
studies, with key events includ ing the feasibility study and front -end engineering and design (“ FEED”)
ahead of the final investment decision (“FID”). Following a positive EA decision and permitting the project
through 2027, the FID will approve the project to proceed with construction early works commencing in
early 2028, followed by full construction and subsequent production of first nickel in the fourth quarter of
2030.
Figure 3 – Project Development Schedule
Capital Cost Estimate
Initial capital costs have been estimated in alignment with AACE (Association for the Advancement of
Cost Engineering) Class 4 standards and have a stated accuracy of +/ - 25%. The PFS contributors
completed engineering, design, and costing inputs for their respective scope, with the overall esti mate
consolidated by Ausenco Engineering Canada Inc. Sustaining and expansion capital costs have been
estimated in alignment with AACE Class 5 standards, and closure capital costs have been estimated on an
order-of-magnitude basis.
The total initial capital cost for the Project is estimated to be $2,182 million and is expended in Years -3, -
2, and -1 ahead of start-up at the commencement of Year 1. Expansion capital cost is estimated to be $763
million and is expended ahead of expansion start-up at the commencement of Year 10. Sustaining capital
cost is estimated to be $1,281 million. Total closure capital cost is estimated to be $284 million. No salvage
value is considered due to the 29-year mine life.
Table 5 – Total Estimated Capital Costs
Capital
Cost Type
Category Total
(USD, millions)
Initial
Capital
Costs
Mining 325
Process Plant 730
Tailings Facility 115
On-Site Infrastructure 106
Off-Site Infrastructure 127
Indirect Costs 401
Owner’s Costs 106
Contingency 272
Total Initial Capital 2,182
Capital
Cost Type
Category Total
(USD, millions)
Sustaining
Capital
Costs
Mine Equipment 643
Tailings Facility 421
Indirect & Owner’s Costs 20
Contingency 97
Total Sustaining Capital 1,181
Total Expansion Capital Costs 763
Total Closure Capital Costs 284
Total Capital Costs (life-of-mine) 4,410
Operating Cost Estimate
Total operating costs are estimated to average $8.15 per tonne milled for life-of-mine, for an equivalent C1
cost of $3.70 /lb nickel produced (exclusive of any byproduct credits). Phase 1 operating costs of $7.88/t
milled are lower than the life -of-mine average, primarily due to the impact of the lower strip ratio in the
early operating years. Inclusive of royalties, sustaining capital, expansion capital, and closure capital, AISC
is estimated to average $4.17 /lb nickel produced for life-of-mine.
Mine operating costs are estimated to average $3.14 per tonne milled for life -of-mine, with lower costs
during Phase 1 ($2.59 per tonne m illed) due to the lower strip ratio. Processing costs are estimated to
average $3.63 per tonne milled for life-of-mine, with the Phase 2 costs slightly lower due to increased
throughput. G&A averages $1.09 per tonne milled for life-of-mine, benchmarking consistently with nearby
major operating mines. Concentrate transport averages $0.29 per tonne milled for life-of-mine, assuming
shipment of concentrates from Baptiste to east Asia.
The Project is subject to a 1% net smelter return (“ NSR”) which is payable on annual sales less
transportation costs to market.
Table 6 – Life-Of-Mine Operating Cost and AISC
Category Units Phase 1 Phase 2 LOM
Average
Mining $/t milled 2.59 3.31 3.14
Processing $/t milled 3.75 3.59 3.63
G&A $/t milled 1.23 1.05 1.09
Concentrate Transport $/t milled 0.31 0.29 0.29
Total Cash Costs $/t milled 7.88 8.24 8.15
C1 Operating Cost1 $/lb nickel produced 3.48 3.76 3.70
AISC2 $/lb nickel produced 3.97 4.23 4.17
Notes:
1. Exclusive of any byproduct credits.
2. Inclusive of operating cost, expansion capital, sustaining capital, royalties, and closure capital.
Economic Analysis
At an assumed nickel price of $8.75/lb and a CAD :USD exchange rate of 0.76, the Project generate s an
after-tax NPV8% of $2.01 billion, an after-tax IRR of 18.6%, and an after -tax payback of 3.7 years. See
Table 7 for further details regarding PFS economics and Table 8 for NPV 8% sensitivity to nickel price,
recovery, initial capital cost, and operating cost.