Royal Nickel is advancing its Dumont nickel project in western Quebec, about 60 km northeast of Rouyn-Noranda, based on the results of a positive prefeasibility study that demonstrates a robust project with a large, world-class resource and excellent project economics. The prefeasibility study was completed by Ausenco Ltd. and is based on staged project development, with initial production of 50,000 mt/d of ore and 29,000 mt/y of nickel in concentrates at an initial capital expenditure of $1.1 billion.

By year five of operations, production would be expanded to 100,000 mt/d and 49,000 mt/y of nickel in concentrates at an additional capital expenditure of $700,000. At that production rate, Dumont would be among the world’s five largest sulphide nickel mines.

The Dumont project has 1.1 billion mt of probable reserves grading 0.27% nickel, a life-of-mine open-pit strip ratio of 1.2:1, and a project life of 31 years. All major support infrastructure is already in place, including rail line, roads and water. Potential project upsides include production of a final ferronickel product, production of a magnetite iron ore concentrate by-product, additional recovery optimization, and use of in-pit crushing or trolley assist to reduce mining costs.

The Dumont project will be an open-pit mine and milling operation, with conventional drilling, blasting and loading using electric shovels and truck haulage. The processing plant will initially incorporate a single SAG mill and twin ball mills for grinding, desliming using cyclones, and conventional flotation and magnetic separation to produce a nickel concentrate that will also contain cobalt and platinum group metal by-products. The plant has been designed to be expanded by the fifth year of operation to 100,000 mt/d by effectively duplicating most of the first mill. Additional mine equipment will be purchased to provide the increased plant throughput.

Royal Nickel intends to advance the Dumont project on multiple fronts, with a view to obtaining permits by the end of 2013 and beginning production by the end of 2015.

“Royal Nickel’s prefeasibility study provides strong validation of the confidence we have maintained in the company since its founding,” Scott Hand, executive chairman of Royal Nickel, said. “We have a tremendous base metal project in Dumont and an outstanding management team to advance it. I continue to have every confidence that Dumont is poised to become a world-class nickel producer.”