New Strategy Separates Upstream And Downstream Businesses
Blackstone Minerals Limited (ASX:BSX) has confirmed that its ongoing Pre-Feasibility Study (PFS) for the Ta Khoa nickel project in Vietnam is now considering significantly expanded downstream refining capacity.
The company has elected to update its in light of recent Ta Khoa exploration success and driven by the strong indicative demand received for the company’s planned downstream products.
The planned additional downstream refining capacity is expected to be supplemented by third party concentrates and additional discoveries made at Ta Khoa.
The PFS is progressing designs for an expanded refinery which will enable the production of a range of Nickel:Cobalt:Manganese (NCM) precursor products, for example NCM811, which attract a strong premium to metal prices .
Separate Pre-Feasibility Studies (PFS) will now be delivered for its upstream and downstream business assets.
Key aspects the downstream PFS will consider include:
- Expanded planned refining capacity enabling the treatment of both third party concentrate and Blackstone’s potential orebodies within the Ta Khoa district in Northern Vietnam;
- Enhanced scale and shared infrastructure, which the Company anticipates will lead to a reduction in project capital intensity;
- Reduction in unit operating costs driven by economies of scale, as well as improved refinery performances due to the ability to blend concentrates;
- Flowsheet for the recovery of additional by-products. Preliminary testwork and desktop studies have identified an economic flowsheet for the recovery of by – products from the Ta Khoa DSS concentrate. Further studies will investigate the performance of Ta Khoa Massive Sulfide Vein (MSV) ores and provide PFS level capital and operating cost estimates; and
- Blackstone anticipates the downstream PFS to be completed by June / July 2021.
The upstream PFS will focus on the following items:
- Incorporating high-grade MSV deposits into the mine plan, to reflect ongoing exploration success at multiple prospects including Ban Chang, King Snake and Ta Cuong. The Company is aggressively drilling with a view to incorporate these deposits into the upstream PFS mining inventory;
- The restart and possible expansion of the existing 450ktpa concentrator, which will be supported by the inclusion of higher grade feed into the mine plan. This has the potential to improve project NPV through deferral of significant upfront capital, mine life extension, and lower technical risks;
- Drill out and appropriate mine sequencing of large, disseminated sulfide (DSS) orebodies including Ban Phuc and Ban Khoa; and
- Blackstone anticipates the upstream PFS to be delivered in Q3/Q4 2021, allowing for the sufficient completion of drilling to incorporate DSS and MSV prospects.
Managing Director, Scott Williamson, said to accurately reflect Blackstone’s activities and core businesses, the Company will complete future studies and communicate strategy in respect of two distinct divisions, being the Upstream Business Unit (UBU) and the Downstream Business Unit (DBU).
The UBU division will comprise 90% economic interest in the Ta Khoa Nickel-Copper-PGE mine in northern Vietnam and associated infrastructure, including the 450ktpa nickel concentrator. The UBU will produce a nickel concentrate with by-products. Future acquisition of mineral assets will be incorporated into the UBU.
“The decision to separate PFS’s for the upstream and downstream business unit will enable the Company to better deploy resources, unlock strategic partnerships, deliver funding solutions and increase the overall transparency in communicating business progress,” Mr Williamson said.
“The updated timing on the downstream PFS reflects the Company’s ambition to capture as much value in a rapidly growing lithium-ion battery industry. We believe we are at the forefront of a once in a generation opportunity and the Company is positioning by increasing the scale of its downstream refining capacity.
“The company is confident it will attract joint venture partnerships with leading organisations that have strong alignment to Blackstone’s strategy and best practices engrained in their business models.”
“For the upstream business, we are focussed on unlocking potential of the Ta Khoa district. With continued exploration success across our targets at Ta Khoa, the Company is confident that it can achieve a critical mass of MSV mining inventory to warrant the restart of the existing concentrator. To present the highest value proposition to shareholders and potential financiers, and to deliver an enhanced downstream strategy, it is important that each of Ban Chang, King Snake and Ta Cuong are incorporated into the upcoming upstream PFS study.”
