TIDMFME
RNS Number : 9392V
Future Metals NL
07 December 2023
7 December 2023
Future Metals NL
Panton Scoping Study Demonstrates Potential for Long-life,
Globally Significant PGM Operation
-- Study leverages off >A$50m investment into Panton to date,
including prior feasibility studies, 45,000m drilling, decline
access to orebody & comprehensive bulk metallurgical
testwork
-- Study demonstrates potential for Panton to be one of few long
life, globally significant PGM operations in the western world
-- Robust project economics, low capital intensity versus
industry benchmarks and strong leverage to PGM price appreciation,
with:
o 1.5Moz PdEq(2) mining inventory from 9.8Mt @ 3.60g/t PGM(3E)
(1) , 0.25% Ni, 12.6% Cr(2) O(3) (4.77g/t PdEq(2) ) for 1.1Moz
PGM(3E) (1) , 25kt Ni, 1.1Mt Cr(2) O(3) concentrate
o Initial 9-year mine life (study's mine plan covers just 26% of
the current defined Reef & High Grade Dunite material and only
10% of the overall MRE)
o PGM production averaging 117,000oz pa from high grade feed of 3.60g/t PGM(3E) (1)
o PdEq(2) production averaging 161,000oz pa (inc. nickel and chromite by-products)
o Low All-in Sustaining Costs (AISC), averaging US$789/oz
(projected to be in the 2(nd) quartile), thereby providing
resilience throughout the metal price cycle
-- Conventional flowsheet (crush, grind & flotation),
producing high grade PGM & chromite concentrates, analogous to
several current South African PGM operations
-- Upside potential via resource growth, additional by-product
credits (copper, cobalt, rhodium & iridium), & further
optimisation of mine design, processing & logistics
-- Potential for future Cu-Ni-PGM resources at Eileen Bore
Project to be included in the next stages of feasibility work
-- Future Metals is planning initiation of a PFS, targeted for
completion in Q4 2024
Study Highlights
-- Study demonstrates the potential for Panton to be one of few
significant primary PGM operations in the western world. The Study
supports a high-grade, initial 9-year operation processing both
Reef and High-Grade Dunite material through a conventional crush,
grind and flotation flow sheet, producing:
Avg. Productio PGM Chromite Conc. Nickel PdEq(2)
n
(Oz pa) (Tpa) (Tpa) (Oz pa)
1,250ktpa 117,000 134,000 1,200 161,000
========================== ==================== ========================== ================== ====================
-- Robust economics with Panton demonstrating strong financial
metrics that reflect the high-grade and low capital intensity of
the Project
Valuation Pre-Production Capex NPV(8%) IRR
(1,250kt) (A$m) (A$m) (%)
(pre / post tax) (pre / post tax)
Base Case 267 250 / 153 26% / 21%
PGM 5yr Avg
Case 477 / 311 39% / 31%
PGM Basket By-product credits
Prices Platinum Palladium Gold Rhodium* Basket Nickel Chromite
(US$/oz) (US$/oz) (US$/oz) (US$/oz) Price (US$/t) (US$/t)
(US$/oz)
--------------------
Base Case 1,285 1,400 2,000 4,450 1,556 20,000 282
--------------------
PGM 5yr Avg
Case 1,040 2,115 1,870 12,450 2,200 20,000 282
======================= ==================== ===================== ==================== ==================== ==================== =================== ====================
* Note Rh not included in Panton Scoping Study economic
evaluation. Included for comparison to South African PGM Basket
Price only
-- Panton Base Case long term PGM pricing aligns with the 85(th)
percentile of the cost curve (see Figure One), with the current
South African PGM(4E) basket price at an unsustainable 65%
percentile (i.e. 35% of current global operations losing money),
near all-time lows
-- Panton's estimated AISC of US$789/oz (projected 2(nd)
quartile) provides the opportunity for the planned future
operations to generate robust operating margins in all phases of
the PGM price cycle (see Figures One & Two)
-- Study includes just 26% of Reef & High Grade Dunite
material - mine life extension and valuation uplift to be targeted
via progressive uplift in Resource categorisation
o Average annual operating free cash flow A$72m - clear value-add of mine life extensions
-- Panton has the opportunity to achieve an accelerated pathway
to production, driven by:
o Project's location on granted Mining Leases
o >A$50m invested in the Project to date including an
established portal and decline, comprehensive metallurgical test
work, >45,000m of drilling & prior environmental studies
o Strong relationships with local stakeholders including the Traditional Owners
-- Panton is optimally located, with good access to established
infrastructure:
o East Kimberley region of Western Australia, a top-tier mining and investment jurisdiction
o 1km from a sealed highway utilised by other mining operations
o 70km from a sealed airstrip for employee and contractor transportation
o 300km from deep-water port at Wyndham, with easy access into key potential markets
Figure One | PGM Industry's Cost Curve and Panton Project's
positioning. Source SFA (Oxford)
*Further details for the industry cost curve analysis are shown
under PGM Industry Cost Curve Position section in the body of this
announcement
Figure Two | South African PGM(4E) Basket Price. Source:
Bloomberg & Company estimates.
*The PGM(4E) basket price is calculated based on the weightings
of Pt, Pd, Au and Rh production for the South African PGM industry.
All other metals production is considered a by-product and credited
towards an operations' cost base
Significant upside potential for Panton over and above the
Scoping Study outcomes from:
o The Panton orebody is open at depth and interpreted to have
improving thicknesses and grades; further drilling may support mine
life extensions
o Inclusion of other payable metals including rhodium, iridium, copper and cobalt
o Resource delineation and inclusion of processing feed from
nearby projects such as Eileen Bore Project or other discoveries
within Future Metals' 176km(2) exploration acreage
o Pricing upside associated with 'Western premiums' for scarce
and critical resources located in Australia supporting supply chain
development outside of China, Russia and South Africa
o Expansion potential from the significant near-surface Bulk
Dunite mineralisation which is not included within this Scoping
Study
Managing Director Jardee Kininmonth commented:
"We are very pleased that the Panton Scoping Study demonstrates
robust economics for a globally significant PGM-Ni-Chromite
Project.
Future Metals' team has capitalised on the significant bank of
prior work completed on the Project and its superior grades to
develop a conventional flow sheet producing saleable PGM and
chromite concentrates at a meaningful scale in a global context.
Coupled with the fact that Panton is one of the only near-term
development prospects for PGM supply outside of Russia and South
Africa, the Company is in a tremendous position to grow value
through 2024 and beyond.
The Scoping Study shows a robust Project which can withstand
downturns in the PGM price cycle and provide significant leverage
to upswings in prices too. The Company plans to progress Panton
swiftly through the various feasibility stages in order to be as
production-ready as possible during the next upswing."
Further details and the full scoping study can be found at the
following link:
http://www.rns-pdf.londonstockexchange.com/rns/9392V_1-2023-12-6.pdf
and on the Company's website at https://future-metals.com.au.
This announcement has been approved for release by the Board of
Future Metals NL.
Cautionary Statement
The Scoping Study Report ("Scoping Study" or "Study") referred
to in this announcement has been undertaken to evaluate the
potential development of the Panton PGM-Ni-Cr Project ("Panton" or
the "Project"). The Project is 100% owned by Future Metals NL
("Future Metals", "FME" or the "Company"). The Scoping Study
comprises a preliminary technical and economic study of the
potential viability of the Project. It is based on low accuracy
level technical and economic assessments that are not sufficient to
support estimation of Ore Reserves. Additional infill drilling,
evaluation work and appropriate studies are required before Future
Metals will be able to estimate Ore Reserves or provide assurance
of an economic development case. The Scoping Study has been
completed to a level of accuracy of +/- 35%.
Of the Mineral Resources scheduled for extraction in this
Scoping Study's production target, approximately 86% are classified
as Indicated and 14% as Inferred over the first five years and 50%
are classified as Indicated and 50% as Inferred over the evaluation
period. There is a low level of geological confidence associated
with Inferred Mineral Resources, and there can be no certainty that
further exploration work will result in the determination of
Indicated Mineral Resources or that the production target will be
realised.
Under prior owners, the Project has previously had a JORC (2012)
Mineral Resource Estimate ("MRE") with the majority of that
estimate in the Measured & Indicated categories. This supported
a Bankable Feasibility Study which was completed on the Project.
Additional conservatism has been applied when estimating Panton's
current JORC MRE, however, the Company believes that this is
relevant information when assessing the results and confidence
levels applied in this Scoping Study.
Future Metals notes that the majority of the upfront capital
required is projected to be repaid in the years where Indicated
Resources comprise a majority of the production schedule. The
Company believes that it has a reasonable basis for providing such
forward-looking statements and the forecast financial information
based on material assumptions outlined in this announcement. One of
the key assumptions is that funding for the Project will be
available when required. While the Company considers all of the
material assumptions to be based on reasonable grounds, there can
be no certainty that they will prove to be correct or that the
range of outcomes indicated by the Scoping Study will be
achieved.
To achieve the range of outcomes indicated in the Scoping Study,
funding in the order of approximately A$267m will likely be
required in pre-production capital expenditure. There is no
certainty that the Company will be able to raise that amount of
funding when needed. It is also possible that such funding may only
be available on terms that may be dilutive to, or otherwise affect,
the value of Future Metals' shares. It is also possible that Future
Metals could pursue other value realisation strategies such as a
sale, partial sale or joint venture of the Project. If it does,
this could materially reduce the Company's proportionate ownership
of the Project. Given the uncertainties involved, investors should
not make any investment decisions based solely on the results of
the Scoping Study.
For further information please contact :
Future Metals NL +61 8 9480 0414
Jardee Kininmonth info@future-metals.com.au
Strand Hanson Limited (Nominated
Adviser) +44 (0) 207 409 3494
James Harris/James Bellman
Panmure Gordon (UK) Limited (UK
Broker)
John Prior/Hugh Rich/Rauf Munir +44 (0)207 886 2500
FlowComms (UK IR/PR) +44 (0) 789 167 7441
Sasha Sethi
Introduction
Future Metals owns 100% of the Panton PGM-Ni-Cr deposit
("Panton" or the "Project") in the eastern Kimberley region of
Western Australia, a tier one mining jurisdiction. The Project is
located on three granted mining licenses 70km north of Halls Creek
and 60km south of the operating Savannah Nickel Mine owned by
Panoramic Resources Ltd.
The Project is well situated for future planned operations, with
good access to roads, a deep-water port at Wyndham, sealed
airstrips and local populations at the nearby towns of Halls Creek
and Kununurra.
The Project is located within the traditional lands of the
Malarngowem, and the tenure sits within the Alice Downs Pastoral
Station.
PGM-Ni-Cr mineralisation occurs within a layered, differentiated
mafic-ultramafic intrusion referred to as the Panton intrusive
which is a 9km long and 3km wide and 1.7km thick south-west
plunging synclinal intrusion. PGM and Cr mineralisation is hosted
within a series of stratiform chromite reefs as well as a
surrounding zone of mineralised dunite within the ultramafic
package.
Panton is the highest grade PGM deposit in Australia, with
mineralisation defined across three components within a JORC (2012)
Mineral Resource Estimate; the Reef, the High Grade Dunite and the
Bulk Dunite. The High Grade Dunite is at the contact and runs
parallel to the Reef throughout the entire deposit. These two
components of the Resource are the focus for the Scoping Study and
planned future operations.
Future Metals plans to produce both a high-grade PGM
concentrate, and a chromite concentrate from the Panton deposit.
These concentrates will be trucked via sealed public roads to
Wyndham for export to customers globally.
Figure Three | Panton PGM-Ni-Cr Project's Location
Key Study Outcomes and Assumptions
Physicals Assumptions
The Study has been compiled by the Company based on a series of
workstreams undertaken by external consultants and has examined two
development scenarios, a 1,250ktpa Case and 850ktpa Case, with the
higher production scenario determined to be optimal.
Planned operations involve the mining of small open pits in the
initial years of construction and operation, followed by
underground mining operations to support a concentrator utilising a
crush, grind and flotation flow sheet to produce a PGM concentrate
and a chromite concentrate.
The primary difference between the two alternative cases
assessed is the processing throughput rates, and the resultant
mining rates and pre-production capital required. Outputs for the
850ktpa Case are set out in Chapter 11 of the Panton Scoping
Study.
Table One | Operating Assumptions
Metric Unit Scoping Study
Outcome
Mining Physicals
====================================== ======= ==============
Underground Mining
Total Lateral Development m 84,056
Total Vertical Development m 4,071
Total Waste kt 2,254
Total Reef Ore kt 3,513
Reef Grade - PGM(3E) (1) (LOM
Avg) g/t 6.84
Reef Grade - PdEq(2) (LOM Avg) g/t 8.96
Total Dunite Ore kt 5,365
Dunite Grade - PGM(3E) (1) (LOM
Avg) g/t 1.61
Dunite Grade - PdEq(2) (LOM Avg) g/t 2.19
Years of Underground Mining yrs 8.5
Open Pit Mining
Total Waste kt 11,648
Strip Ratio W:O 12.2
Total Reef Ore kt 273
Reef Grade - PGM(3E) (1) (LOM
Avg) g/t 6.23
Reef Grade - PdEq(2) (LOM Avg) g/t 8.16
Total Dunite Ore kt 679
Dunite Grade - PGM(3E) (1) (LOM
Avg) g/t 1.52
Dunite Grade - PdEq(2) (LOM Avg) g/t 2.09
Years of Open Pit Mining yrs 2.0
Processing Physicals
====================================== ======= ==============
Total Indicated Ore Processed kt 4,888 (50%)
Total Inferred Ore Processed kt 4,942 (50%)
Total Ore Processed kt 9,830
Processing Years (LOM) years 8.5
PGM(3E) (1) Grade (LOM Avg) g/t 3.60
Nickel Grade (LOM Avg) % 0.25%
Chromite Grade (LOM Avg) % 12.6%
PdEq(2) Grade (LOM Avg) g/t 4.77
Recovery - Pt (LOM Avg) % 81%
Recovery - Pd (LOM Avg) % 92%
Recovery - Au (LOM Avg) % 95%
Recovery - Ni (LOM Avg) % 40%
Recovery - Cr(2) O(3) (LOM Avg) % 73%
Total PGM(3E) Concentrate Produced kt 379
PGM(3E) (1) Concentrate Grade
(LOM Avg) g/t 81
Nickel (in PGM(3E) Concentrate)
Grade (LOM Avg) % 2.7%
====================================== ======= ==============
Summary of Recovered Metal
====================================== ======= ==============
Recovered PGM(3E) (1) in Concentrate
(LOM Avg) oz pa 117,000
Recovered Nickel in Concentrate
(LOM Avg) tpa 1,200
Saleable Chromite Concentrate
(LOM Avg) tpa 134,000
Recovered PdEq(2) (LOM Avg) oz pa 161,000
====================================== ======= ==============
Financial Assumptions
The Study utilised the assumptions set out in Table Two. The
Company concluded that it has a reasonable basis for using these
assumptions and providing the forecast financial information and
production targets included in this announcement. The Company is
satisfied that the financial viability of the Project is not
dependent on the inclusion of Inferred Resources.
The Company has utilised a long term Base Case PGM Basket Price
(Pt, Pd, Au, Rh) assumption that is modelled at approximately the
85(th) percentile of the PGM(4E) cost curve, i.e. it assumes a long
term price where 15% of operations are loss making. Price
assumptions for platinum, palladium and nickel are also supported
by estimates from a range of market analysts. The Company has
utilised spot prices for gold and chromite concentrate (40-42%
Cr(2) O(3) , CIF South Africa). The Company has also included a
financial evaluation utilising the historical 5-year average PGM
prices.
The project has been modelled on an unlevered basis on 100%
ownership terms. NPV(8%) and IRR are modelled from the start of
project construction. Costs incurred to reach a Final Investment
Decision ("FID") are not included in the pre-production capital
estimate. The capital payback period is assumed to be measured from
the commencement of production.
Capital costs are based on current engineering databases and
direct quotes from equipment manufacturers, as well as estimates
based on recent actual pricing from similar WA mining operations.
They include all pre-production site, processing plant, tailings
dam, mine development and initial open pit mining costs. They also
include sustaining capital post-production.
Operating costs are derived from a number of sources including
quotes supplied by vendors, consultants' databases and estimates
based on similar WA mining operations.
The Company's financial evaluation outputs and key project
metrics are set out on a real, unlevered basis.
Table Two | Financial Assumptions
Base Case PGM 5-year Avg Case
Commodity prices (LOM avg.)
Pt US$/oz 1,285 1,040
Pd US$/oz 1,400 2,115
Au US$/oz 2,000 1,870
Rh* US$/oz 4,450 12,450
PGM(4E) Basket Price US$/oz 1,556 2,200
Ni US$/t 20,000 20,000
Cr(2) O(3) (40-42% CIF South
Africa) US$/t 282 282
Financial
WACC (real) % 8%
Exchange rate A$/US$ 0.65
Payability
Pd payability % 92
Pt payability % 92
Au payability % 80
Ni payability % 55
Cr(2) O(3) payability % 95
Pd-Au payability (tails product) % 98
============================================= =========================== ========================================
Pre-Production Capital Estimates
Pre-Production Open Pit Mining A$m 21
Pre-Production Underground Mining A$m -
Processing Plant A$m 146
Non-Process Infrastructure A$m 34
Indirects A$m 33
Contingency A$m 32
Total Pre-Production Capital A$m 267
Sustaining Capital (LOM avg.) A$m 17
Operating Expenditure Estimates
Open Pit Mining A$/t processed 26.7
Underground Mining A$/t processed 97.4
Processing A$/t processed 37.6
G&A A$/t processed 5.0
Realisation Costs (Logistics,
TC/RCs) A$/t processed 20.6
============================================= =========================== ========================================
Financial Outcomes
NPV(8%) (pre-tax) A$m 250 477
NPV(8%) (post-tax) A$m 153 311
IRR (pre-tax) % 26% 39%
IRR (post-tax) % 21% 31%
Payback Period Years 4.0 3.2
============================================= =========================== ================== ====================
* Note Rh not included in Panton Scoping Study economic
evaluation. Included for comparison to South African PGM Basket
Price only
Production Target
The focus of the Study is the Reef-style mineralisation and the
mineralised High Grade Dunite which sits predominantly in the
footwall of the Reef. The deposit is laterally and vertically
extensive, and mineralisation is demonstrably continuous across its
extent. The shallower portions, which the Study envisages to be
mined initially, have been more densely drilled and therefore have
been categorised as Indicated Resources. The spacing of drillholes
is broader at depth (see Figure Four), and while this deeper
drilling demonstrates the continuity of the Reef and High Grade
Dunite mineralisation, there are lower levels of geological
confidence in the grades and widths of the mineralisation in these
areas. Given this, the deeper portion of the deposit has been
classified as Inferred. The Company intends to complete a review of
the Resource in conjunction with the Study mine planning to define
the areas which require further drilling in order to upgrade them
from Inferred to Indicated. As part of the Study, the Company has
included $3m per annum from Year 5 for infill drilling costs.
Figure Four | Isometric view of high-grade Panton with drill
traces and resource blocks coloured by Resource classification
Under prior owners, the Project has previously had a JORC (2012)
MRE with the majority of that estimate falling in the Measured and
Indicated categories. This supported a Bankable Feasibility Study
which was completed on the Project in 2003 and updated in 2012. A
significant component of Panton's current JORC MRE has been
classified as Indicated and, the Company believes that this is
relevant information when assessing the results and confidence
levels applied in the Study.
Total payable metal over the life of the Project is forecast to
be approximately 1,210koz of PdEq(2) (911koz PGM (3E) (1) , 5kt
nickel and 1,084kt chromite concentrate).
Annual numbers with the breakdown of Indicated and Inferred
Resources for mined ore are shown in Figure Five. Indicated
Resources comprise 86% of the total material scheduled for
extraction in the first five years of the production target
outlined in the Study. Over the life of mine, Indicated material
comprises 50% of the Study's production target. The Study
demonstrates that the pre-production capital for the Project is
forecast to be repaid in Year 5 when Indicated material comprises
the majority of the mine plan.
Figure Five | Ore Mined - by Resource Classification vs.
Operating Free Cash Flow
The mine plan only includes 26% of material from the combined
MRE for the Reef and High Grade Dunite. There is significant upside
potential for the Project from improving the geological confidence
of the Inferred mineralisation for its inclusion of additional
material into the mine plan. Figure Five shows the forecast annual
free cash flows of the Project. As an indication of the potential
upside associated with mine life extensions, average annual free
cash flows during the years of operation are A$72m.
Sensitivity Analysis
The Project's NPV(8%) and IRR are most sensitive to changes in
PGM (3E) (1) prices, operating costs and exchange rates, as shown
in Figure Five.
Figure Six | Project NPV(8%) (pre-tax) Analysis
Table Three | Scenario Analysis - PGM (3E) Price Assumptions
Base
Case
====================== ================= ================= ================== ================= =================
Pt Price
(US$/oz) 1,085 1,185 1,285 1,385 1,485
Pd Price
(US$/oz) 1,200 1,300 1,400 1,500 1,600
Gold Price
(US$/oz) 1,800 1,900 2,000 2,100 2,200
Rhodium
Price
(US$/oz)* 4,450 4,450 4,450 4,450 4,450
Basket
PGM(4E)
Price
(US$/oz) 1,370 1,463 1,556 1,649 1,743
Pre-tax
NPV(8%)
(A$m) 78 164 250 336 422
====================== ================= ================= ================== ================= =================
Pre-tax
IRR (%) 14% 20% 26% 31% 37%
====================== ================= ================= ================== ================= =================
Payback
Period 5.0 4.4 4.0 3.7 3.4
====================== ================= ================= ================== ================= =================
Annual
Operating
CF (A$m) 69 80 91 101 112
====================== ================= ================= ================== ================= =================
LOM
Operating
CF (A$m ) 588 679 771 862 953
====================== ================= ================= ================== ================= =================
LOM FCF
(A$m) 164 255 346 437 529
====================== ================= ================= ================== ================= =================
Annual
Operating
FCF
(A$m)** 51 61 72 83 94
====================== ================= ================= ------------------ ================= =================
* Note Rh is not included in the Study's economic evaluation.
Included for comparison to South African PGM operations only.
**Operating FCF refers to free cash flow excluding
pre-production capital
Project's Positioning
The Study highlights the Project as being a potentially globally
significant producer of PGMs and chromite. Panton also represents
one of the only near-term development PGM projects outside of
Russia and South Africa. Additionally, the Study demonstrates that
Panton has a lower capital intensity than other similar PGM
projects in the study phase, given its higher PGM grade.
PGM Market Dynamics
The supply of primary PGM production is currently dominated by
South African and Russian operations. Such operations supply
>80% of PGM(4E) (Pd, Pt, Au & Rh) production (based on
actual 2022 figures). Both of these countries are subject to
material investment and operating risks:
- Russia is currently subject to international sanctions which
has deterred Western investment into its mining industry,
complicated the sourcing of new and sustaining mining equipment for
existing operations and caused Western customers to seek
alternative sources for metals such as PGMs.
- South Africa produced over 71% of primary platinum supply and
37% of primary palladium supply in 2022. Many of the operations in
South Africa have operated for several decades, leading to deep
mines and aging infrastructure which ultimately increases operating
costs and sustaining capital. These issues are amplified by the
chronic power availability issues in the country.
South African deposits are also relatively high in rhodium, with
the recent profitability of many operations being driven by very
strong rhodium prices, which has subsequently declined (2021: Rh
price US$29,000/oz vs 2023: Rh price US$4,450/oz). This price
decline, coupled with significant cost base inflation has the
potential to lead to mine closures in the near to medium term.
PGM Industry Cost Curve Position
The Study demonstrates that the proposed operation has the
potential to be a low-cost producer of PGMs, with strong resilience
for future operations throughout the PGM price cycle.
Figure One shows that at the current PGM(4E) basket price of
US$1,250/oz approximately 35% of existing PGM production is
loss-making. This creates potential for a significant amount of
supply to cease in the near to medium term unless prices
increase.
Panton's cash costs net of by-product credits and AISC of
US$678/oz and US$789/oz respectively demonstrate that if the
Project was currently producing it would be towards the middle of
the 2(nd) quartile of PGM production, thereby ensuring resilient
margins in a depressed price environment and making for an
economically robust project capable of withstanding sustained
downturns in PGM prices.
Further details on the calculation methodology for the Company's
stated cash costs, AISC and PGM industry cost curve are set out in
Chapter 10 of the Study.
Study Stage PGM Projects ex-South Africa and Russia
Table Four shows how Panton compares to two other study-stage
PGM projects outside of South Africa and Russia. In contrast to
other developers, Panton has a superior grade and materially lower
capital requirements.
Table Four | PGM Project Comparisons (ex-South Africa &
Russia)
Project Owner Location Upfront PGM(3E) Life of PGM(3E) Co-Product
Pre-Production (1) Mine (1) Production
Capital Grade (Years) Production (LOM Avg)
(A$m) (g/t) (Koz, LOM
Avg)
1kt nickel
134kt
Future Western chromite
Panton Metals Australia 267 3.60 8.5 117 concentrate
======================= ======================= ====================== ========================== =================== =================== ====================== =======================
9kt nickel
10kt copper
Gonneville Chalice Western 0.8kt
(15Mt) Mining Australia 1,600 0.95 19 280 cobalt
======================= ======================= ====================== ========================== =================== =================== ====================== =======================
9kt copper
Generation Ontario, 248koz
Marathon Mining Canada 1,243(3) 0.90 12.5 216 silver
======================= ======================= ====================== ========================== =================== =================== ====================== =======================
(3) Pre-production capital estimate of C$1,110. AUD:CAD exchange rate of 0.89 applied
*See Appendix Two for source details
Project Configuration
Initial open pit mining will be undertaken in parallel with
construction of the processing plant. Open pit mining will continue
into the second year of operations, providing the initial
processing feed for the processing plant. Portal and decline
development will begin within Year 2 and material from underground
mining will comprise the majority of processing feed from Year 3
onwards.
Panton's processing flowsheet will produce a PGM concentrate
with payable by-products and a chromite concentrate.
Mined material will report to a crusher, followed by ore sorting
to separate Reef from High Grade Dunite. Each of these feed types
will then report to their own processing train. The unit operations
for both are the same to produce a PGM concentrate; two-stage
grinding followed by flotation.
The Reef flow sheet will also include a Resin-in-Leach leaching
circuit to produce a high-grade PGM product for direct sale to
refiners or for blending with the PGM concentrate produced from
flotation. The Reef flow sheet also includes a flotation circuit to
produce a chromite concentrate.
Figure Seven shows the summary flowsheet for the Panton
Project.
Figure Seven | Panton Scoping Study Flowsheet (summarised)
Power will be supplied from a gas-fired power plant on site
utilising trucked liquefied natural gas with variable renewable
energy from a solar panel installation.
Water will be supplied from a borefield located within the
existing Mining License area.
The Project is located 1km from a sealed highway which runs to
the deep-water port at Wyndham approximately 300km to the north.
Multiple third party operations export their products out of the
port. A sealed airstrip is located at Halls Creek, 70km to the
south of the Project along a sealed highway.
It is envisaged that the proposed workforce at Panton would be
predominantly fly-in, fly-out and would travel to and from Halls
Creek via Broome and onto Perth (or elsewhere).
Upside Opportunities
The Study underpins a compelling investment case for progressing
the Project, and the Company sees significant further upside
opportunities as set out below:
-- Improved geological confidence of existing Resource: The
Study only includes 26% of the Reef and High Grade Dunite MRE due
to reporting constraints in including Inferred resources. Average
annual free cash flows of A$72m in the Study demonstrate the
significant upside in increasing mine life through the inclusion of
existing Resources.
-- Resource growth: The Panton orebody is open at depth and
interpreted to have improving thicknesses and grades; further
drilling may support mine life extensions beyond the currently
modelled life of mine.
-- Additional payable metals: The Panton deposit contains metals
either not included in the MRE or not assumed to be payable.
Additional work in the PFS stage may support the inclusion of other
payable metals including rhodium, iridium, copper and cobalt.
-- Expansion potential: The Study does not include the
near-surface Bulk Dunite mineralisation. This component of the MRE
comprises 55.7Mt @ 1.2g/t PdEq(4) , with future metallurgical
studies may support a significantly expanded operation.
-- Regional discoveries: The Company has recently expanded its
exploration position around the Panton Project. Additional nearby
discoveries will potentially further enhance the Project's
economics through shared surface and processing infrastructure.
Future Metals' Eileen Bore Project is located 15km to the east of
Panton and historic drilling indicates the potential to quickly
establish a resource estimate, progress metallurgical understanding
and include it in the overall project development plan.
-- Western price premiums: Pricing upside associated with being
one of the few western PGM & chromite projects outside of
China, Russia and South Africa. The Company will establish the
Project's competitiveness on a carbon intensity basis during the
planned PFS, however given the grade, and intended power source the
Company is currently of the view that the Project will be
substantially less carbon intensive than many existing
projects.
(4) MRE PdEq calculation details provided in Appendix One of the
Study
Funding Strategy
Estimated pre-production funding of A$267m is required to
achieve the range of outcomes indicated in the Study. The Company
is of the view that there is a reasonable basis to believe that the
requisite funding amount for the Project will be available when
required. The grounds on which this reasonable basis is established
include:
-- The Project has strong technical and economic fundamentals
which provide an attractive return on capital and generate robust
cashflows under a range of commodity price assumptions, even at
currently depressed spot prices. This provides a strong platform
for attracting potential equity, debt and offtake funding.
-- The Project is located in Western Australia, a top tier
mining and investment jurisdiction with a stable political and
regulatory environment. This increases attractiveness for potential
financiers given the reduced level of sovereign, legal, operational
and financial risks.
-- The Project is the highest grade PGM & chromite deposit
in Australia, and one of the highest grade undeveloped PGM projects
in the world. PGM supply is currently heavily concentrated in
Russia and South Africa. The criticality of PGMs to multiple
decarbonisation technologies, the significant risk of negative
supply shocks, and the Project's location in a top tier western
mining jurisdiction are expected to drive significant interest from
a range of potential pools of capital. This includes potential
non-dilutive government funding sources available for critical
minerals projects in Western jurisdictions.
-- The Company continues to engage with potential strategic
partners who are interested in the Project in light of the reasons
stated above. The Company will progress these discussions which may
ultimately lead to a partnership with a larger company with
improved access to capital.
-- Future Metals' board and management team have a strong track
record of raising equity and debt funds for development and
operating projects.
There can be no certainty that the Company will be able to
source funding as and when required. Typical project development
financing would involve a combination of debt and equity. It is
possible that such funding may only be available on terms that may
be dilutive to or otherwise affect the value of the Company's
existing shares.
External Relations and Regional Benefits
The Study shows that Panton will be a significant operation in
the East Kimberley region of Western Australia, stemming from which
there will be substantial social and economic benefits.
The Company has had positive engagement with the Traditional
Owners of the Project area and will continue to engage with them,
and the broader East Kimberley community to ensure that the future
development of the Project provides a positive contribution to the
region.
During construction the Project would provide approximately 150
jobs, with steady-state operations requiring 215 jobs for 9 years.
The Company is committed to prioritising indigenous employment and
contracting services to support its operations.
The Study sets out a high-grade, predominantly underground
project with a relatively small surface footprint. The Company's
current exploration practices involve minimising land disturbance
where possible and it will continue to do so as it advances the
Project. The Company is committed to being a strong environmental
steward in the areas in which it operates and will continue to
engage positively with stakeholders to ensure that the
environmental impact of its activities and operations are
minimised.
Forward Plan
The Study provides support that Panton is a commercially viable
project and accordingly, the Company now plans to commence a
Pre-Feasibility Study ("PFS") to further de-risk the Project and
finalise a go-forward development case.
The Company will, in particular, seek to further optimise the
processing flowsheet, undertake metallurgical variability testing,
progress offtake discussions and improve the geological confidence
of the MRE. Additionally, the Company will begin preparing the
Project for regulatory approvals processes.
The Company is currently targeting completion of a PFS in Q4
2024.
Figure Eight | Panton Forward Plan and Development Timeline
Study Consultants
The Company completed the Panton Scoping Study with an internal
team, with support from several specialist consultants. The
following list of consultants have contributed to the Study.
Contributor Workstream
Independent Metallurgical Metallurgical test-work, flowsheet, process
Operations (IMO) Pty Ltd design, process capital and operating cost
estimates
---------------------------- ------------------------------------------------
ABGM Pty Ltd Pit optimisation and underground mine design,
scheduling, cost estimation.
---------------------------- ------------------------------------------------
Anandarasa Advisory Economic evaluation modelling
---------------------------- ------------------------------------------------
International Resource Mineral resource estimation
Solutions Pty Ltd
---------------------------- ------------------------------------------------
Steinert Ore sorting testwork
---------------------------- ------------------------------------------------
Biologic Preliminary environmental assessment
---------------------------- ------------------------------------------------
RPM Global Permitting scoping study
---------------------------- ------------------------------------------------
Mainsheet Electricity scoping study
---------------------------- ------------------------------------------------
Competent Person's Statement
Mineral Resources
The information in this document that relates to Mineral
Resources has been extracted from the ASX announcement titled:
"Resource Upgrade Defines Panton Impressive Grade & Scale", 26
October 2023. This announcement is available to view on the
Company's website at future-metals.com.au. The Company confirms
that it is not aware of any new information or data that materially
affects the information included in the original announcement and
that all material assumptions and technical parameters underpinning
the estimates in the original release continue to apply and have
not materially changed. The Company confirms that the form and
context in which the Competent Person's findings are presented have
not been materially modified from the relevant original market
announcement.
Metallurgy
The information in this announcement that relates to
metallurgical test work managed by Independent Metallurgical
Operations Pty Ltd ("IMO") is based on, and fairly represents,
information and supporting documentation reviewed by Mr Peter
Adamini, BSc (Mineral Science and Chemistry), who is a Member of
The Australasian Institute of Mining and Metallurgy (AusIMM). Mr
Adamini is a full-time employee of IMO, who has been engaged by
Future Metals NL to provide metallurgical consulting services. Mr
Adamini has approved and consented to the inclusion in this
announcement of the matters based on his information in the form
and context in which it appears.
Mining
The information in this document that relates to mine planning,
design and scheduling managed by ABGM Pty Ltd ("ABGM") is based on,
and fairly represents, information and supporting documentation
reviewed by Mr Anton von Wielligh, B.Sc. (Hons) in Engineering
(Mining), who is a Fellow of AusIMM. Mr von Wielligh is a full-time
employee of ABGM, who has been engaged by Future Metals NL to
provide mining consulting services. Mr von Wielligh has approved
and consented to the inclusion in this announcement of the matters
based on his information in the form and context in which it
appears.
Exploration and Metallurgical Results
The Information in this announcement that relates to previous
exploration and metallurgical results for the Project is extracted
from the following ASX announcements:
-- 27 July 2022 | High Grade Ni-Cu-PGE sulphides confirmed at
Panton
-- 13 February 2023 | Mining and Processing Breakthrough at
Panton
-- 21 March 2023 | High Grade PGM Mineralisation from 350m Step
Out Drilling
-- 4 May 2023 | Drilling to commence at Nickel Sulphide
Targets
-- 24 May 2023 | RC drilling commences at Panton Ni-Cu-PGM
Targets
-- 11 July 2023 | Step Change in PGM Recovery - Improved to
86%
-- 5 October 2023 | FME Doubles Strategic Exploration Position
Near Panton
-- 26 October 2023 | Resource Upgrade Defines Panton Impressive
Grade & Scale
The above announcements are available to view on the Company's
website at future-metals.com.au. The Company confirms that it is
not aware of any new information or data that materially affects
the information included in the relevant original market
announcements. The Company confirms that the information and
context in which the relevant Competent Person's findings are
presented have not been materially modified from the original
market announcements.
Forward Looking Statements
Certain statements in this announcement relate to the future,
including forward-looking statements relating to the Company's
financial position, strategy and expected operating results. These
forward-looking statements involve known and unknown risks,
uncertainties, assumptions, and other important factors that could
cause the actual results, performance or achievements of the
Company to be materially different from future results, performance
or achievements expressed or implied by such statements. Actual
events or results may differ materially from the events or results
expressed or implied in any forward-looking statement and
deviations are both normal and to be expected. Other than required
by law, neither the Company, its officers nor any other person
gives any representation, assurance or guarantee that the
occurrence of the events expressed or implied in any
forward-looking statements will actually occur. You are cautioned
not to place undue reliance on those statements.
Appendix One | Peer Benchmarking References - Study-Stage PGM
Projects
Project Company Study Stage Release Date Source
=========== ================== ============ =============== ====================================================
Gonneville Chalice Scoping 29 August 2023 G onneville Nickel-Copper-PGE Project Scoping Study
=========== ================== ============ =============== ====================================================
Marathon Generation Mining Feasibility 31 March 2023 M arathon 2023 Feasibility Study Update
=========== ================== ============ =============== ====================================================
Glossary
Term Definition
AISC all-in sustaining costs
=================== =======================================================
Au gold
=================== =======================================================
Avg average
=================== =======================================================
Cr(2) O(3) or an oxide mineral and principal ore of chromium
Chromite
=================== =======================================================
Competent Person the competent person responsible for the relevant
or CP stated information contained within this announcement
=================== =======================================================
Cr chromium
=================== =======================================================
Cu copper
=================== =======================================================
Dunite an intrusive igneous rock of ultramafic composition
and with phaneritic (coarse-grained) texture
=================== =======================================================
FCF free cash flow
=================== =======================================================
FS feasibility study
=================== =======================================================
FEED front-end engineering and design
=================== =======================================================
FID final investment decision
=================== =======================================================
g/t grams per tonne
=================== =======================================================
Indicated that part of a Mineral Resource for which quantity,
grade and physical characteristics are estimated
with sufficient confidence to allow the application
of modifying factors in sufficient detail to
support mine planning and evaluation of the
economic viability of the deposit
=================== =======================================================
Inferred that part of a Mineral Resource for which quantity
and grade are estimated on the basis of limited
geological evidence and sampling
=================== =======================================================
Ir iridium, one of the platinum group elements
=================== =======================================================
IRR internal rate of return
=================== =======================================================
JORC Code (2012) Australasian Code for Reporting of Mineral
Resources and Ore Reserves 2012, published
by the Joint Ore Reserves Committee
=================== =======================================================
km kilometres
=================== =======================================================
kt thousands of tonnes
=================== =======================================================
ktpa thousands of tonnes per annum
=================== =======================================================
LOM Life-of-mine
=================== =======================================================
m metres
=================== =======================================================
Mafic igneous rocks that are low in silicon and high
in iron and magnesium
=================== =======================================================
Measured the part of a Mineral Reserve that has been
sampled extensively by closely spaced drill
holes and/or developed by underground workings
in sufficient detail to render an accurate
estimation of grade and tonnage
=================== =======================================================
Mineral Resource a concentration or occurrence of solid material
of economic interest for which there is a reasonable
prospect of eventual economic extraction
=================== =======================================================
Moz million ounces
=================== =======================================================
MRE mineral resource estimate
=================== =======================================================
mRL metres relative level, i.e. metres above sea
level
=================== =======================================================
Mt million tonnes
=================== =======================================================
Ni nickel
=================== =======================================================
NPV net present value
=================== =======================================================
O oxygen
=================== =======================================================
Ore Reserve the economically mineable part of a Measured
and/or Indicated Mineral Resource. It includes
diluting materials and allowances for losses,
which may occur when the material is mined
or extracted
=================== =======================================================
Os osmium, one of the platinum group elements
=================== =======================================================
oz ounces
=================== =======================================================
pa per annum
=================== =======================================================
Panton PGM-Ni-Cr the Panton PGM-Nickel-Chromium (or Chromite)
Project or Panton Project
=================== =======================================================
Pd palladium, one of the platinum group elements
=================== =======================================================
PdEq palladium equivalent
=================== =======================================================
PFS Pre-Feasibility Study
=================== =======================================================
PGE or PGM platinum group elements or metals. The collective
term for platinum, palladium, rhodium, ruthenium,
osmium and iridium
=================== =======================================================
PGM(2E) platinum group metals, Pt and Pd
=================== =======================================================
PGM(3E) platinum group metals, Pt, Pd and Au
=================== =======================================================
PGM(4E) platinum group metals, Pt, Pd, Au and Rh
=================== =======================================================
Tpa tonnes per annum
=================== =======================================================
W:O waste:ore ratio
=================== =======================================================
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END
MSCBRBDDDSGDGXL
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December 07, 2023 02:00 ET (07:00 GMT)
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