Royal Nickel has awarded Ausenco and SRK Consulting a contract for the preparation of a feasibility study for its Dumont nickel project in Quebec. Ausenco and SRK collaborated in preparing both the prefeasibility and revised prefeasibility studies for Dumont, released November 1, 2011, and May 14, 2012, respectively. With the leverage provided by work already under way or completed during the prefeasibility stage, the company expects to announce the results of the feasibility study by mid-2013.

The Dumont project is located in western Quebec, approximately 25 km west of the city of Amos, 60 km northeast of Rouyn-Noranda, and 70 km northwest of Val-d’Or. The project, as described in the revised prefeasibility study, will be a conventional open-pit mine/mill operation, using conventional drilling, blasting, and loading, with electric shovels and truck haulage. Production of nickel in concentrates is estimated to average 49,000 mt/y over an active mine life of 19 years. Processing of stockpiled lower-grade ore for an additional 12 years is expected to yield 29,000 mt/y of nickel in concentrates.

The processing plant will have an initial average throughput of 50,000 mt/d using a single SAG mill and two ball mills for grinding, desliming using cyclones, conventional flotation, and magnetic separation to produce a nickel concentrate also containing cobalt. The plant has been designed to be expanded to 100,000 mt/d by the fifth year of operation by effectively duplicating most of the first mill. Additional mine equipment will also be purchased to allow the corresponding increase in mine production and the potential to implement trolley assist.

Approximately 56 million mt of material will be pre-stripped prior to start-up of operations. The life-of-mine plan calls for mining of 2.3 billion mt of material, consisting of 1.2 billion mt of waste rock and overburden and 1.1 billion mt of ore over a 19-year mine life. The overall strip ratio for the project is 1.2:1.

Approximately 500 million mt of stockpiled lower-grade ore is expected to remain at the end of mine life, which will be processed for an additional 12 years, utilizing the mine pit for tailings disposal.

Nickel concentrate will be thickened and filtered on site and loaded for either truck or rail shipment to third-party smelters. Cash costs of production are estimated at $4.07/lb of nickel, net of byproduct credits.

A tailings storage facility (TSF) will be located immediately north of the mine/mill complex. The TSF is designed to store 610 million mt of thickened tailings—enough for the first 19 years that the pit will be active. After that, when mining has ceased in the open-pit, the mill tailings will be pumped directly into the open-pit. Process water will be stored in lined ponds near the plant site. Process water will be a combination of water pumped from the mine, recycle from the TSF, surface water capture, and some extraction of water from the Villemontel river.

The Dumont project is located adjacent to a rail line, a highway and a power line that has sufficient capacity for the construction period. An 8-km rail spur will be built off the rail line to provide access into the mine property, and a 40-km power line from an existing sub-station will be constructed to provide sufficient power once operations begin.