Conic Metals Corp., Toronto, Canada, (TSXV: NKL) has provided operating results for the quarter ending June 30, 2020 of the Company’s largest asset, being the Ramu Nickel-Cobalt (“Ramu”) integrated operation in Papua New Guinea. Conic currently holds an 8.56% joint-venture interest in the Ramu operation. Ramu is operated by the Metallurgical Corporation of China (MCC) which, along with its partners, owns an 85.0% interest in Ramu.
“Despite the impact of the COVID pandemic on the global economy, Ramu continued to demonstrate solid operating performance, and sales in the quarter and half year results are consistent with 2019 performance” stated Justin Cochrane, President and CEO. “Nickel production for the half year are 1% lower in comparison to the same period in 2019 and we expect Ramu to meet guidance of 32,000-33,000 in 2020. We are pleasantly surprised considering other operations had to shut down in the quarter and Ramu continues to operate at full capacity” added Mr. Cochrane, who also noted “sales numbers in the quarter at 7,555 tonnes of nickel contained combined with industry leading cash costs of $2.18 per pound continue to support our belief that Ramu is the best performing HPAL operation in the world. Ramu is able to generate significant free cash flow due to vigilance in keeping costs low.” Actual cash costs for six months ending June 30, 2020 were $2.11 per pound of nickel produced, net of byproduct credits.
According to Wood Mackenzie, the lowest quartile of C1 Cash Cost of nickel production is forecast to be $3.26 per pound in 2020. C1 Cash Cost differs from actual production cost as it includes transportation and refining costs to produce Class I or Class II nickel. Ramu produces nickel in the form of mixed hydroxide product (“MHP”) which contains approximately 40% nickel and 3.5% cobalt. MHP is a desired raw material for the manufacture of lithium ion battery cathode materials such as NCA and NMC, which are being extensively adopted in the electric vehicles.
Ramu’s production and Actual Cash Cost are presented in the table below.
|
|
2019 |
2020 |
|||||||||
|
|
Q1 |
Q2 |
Half Year |
Q1 |
Q2 |
Half Year |
|||||
|
Ore Processed (dry kt) |
800 |
959 |
1,759 |
920 |
814 |
1,734 |
|||||
|
MHP Produced (dry tonne) |
19,653 |
22,490 |
42,143 |
21,177 |
18,975 |
40,152 |
|||||
|
Contained Nickel (tonne) |
7,663 |
8,767 |
16,430 |
8,635 |
7,603 |
16,238 |
|||||
|
Contained Cobalt (tonne) |
704 |
793 |
1,497 |
720 |
655 |
1,375 |
|||||
|
Nickel Capacity Utilization (% of design1) |
94% |
108% |
101% |
106% |
93% |
100% |
|||||
|
MHP Shipped (dry tonne) |
17,219 |
24,607 |
41,826 |
15,121 |
19,024 |
34,145 |
|||||
|
Contained Nickel (tonne) |
6,588 |
9,457 |
16,045 |
6,108 |
7,555 |
13,663 |
|||||
|
Contained Cobalt (tonne) |
609 |
861 |
1,470 |
522 |
644 |
1,166 |
|||||
|
Cash Cost Actual2 |
$2.44 |
$2.41 |
$2.42 |
$2.05 |
$2.18 |
$2.11 |
|||||
Note (1) – Ramu design capacity of 32,600 tonne per year of contained nickel
Note (2) – Actual Cash Cost net of byproduct credits
About Conic
Conic Metals Corp. is a base metals company offering direct exposure to nickel and cobalt, both being critical elements of electric vehicles and energy storage systems. Conic holds an 8.56% joint-venture interest in the producing, long-life and world-class Ramu Nickel-Cobalt Operation located in Papua New Guinea which provides Conic with significant attributable nickel and cobalt production. In addition, Conic manages a portfolio of 11 nickel and cobalt royalties on development and exploration projects in Canada and Australia. Conic will continue to invest in a battery metals-focused portfolio of streams, royalties and direct interests in mineral properties containing battery metals.
