Blackstone Minerals mulls major downstream nickel refining capacity expansion at Ta Khoa with strong increase in demand

Blackstone Minerals Ltd (ASX:BSX) (OTCMKTS:BLSTF) (FRA:B9S) has intentions to expand downstream nickel refining capacity in light of recent Ta Khoa exploration success in Vietnam and strong indicative demand for the planned downstream products.

As part of the ongoing pre-feasibility study (PFS) and in-line with the company’s overarching corporate strategy, Blackstone has planned additional downstream refining capacity which is expected to be supplemented by third-party concentrates and additional discoveries at Ta Khoa.

Delivering on this expanded scale will see Blackstone become a globally significant class-I nickel producer in collaboration with tier-I partners to unlock the value of its expanded downstream refinery strategy.

To provide for these intentions, Blackstone has confirmed that separate pre-feasibility studies (PFS) will be delivered for upstream and downstream business assets.

“Once-in-a-generation” opportunity

Managing director Scott Williamson said: “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.

“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.

“Blackstone 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.”

Downstream focus

Key aspects of the downstream PFS will include:

• Expanded planned refining capacity enabling the treatment of both third-party concentrate and Blackstone’s potential ore bodies 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 test-work 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 Sulphide 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.

Upstream focus

The upstream PFS will focus on:

• 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 450,000 tonnes per annum 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) ore bodies 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.

Unlocking potential of district

Williamson continued: “For the upstream business, we are focused on unlocking the 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.”

Story by ProactiveInvestors