RNC Minerals Advances Value Enhancement Initiatives for Dumont Nickel-Cobalt Project

Engages CRU to Confirm Value-in-Use Analysis of RNC's Concentrate Roasting Approach for Dumont High Grade Nickel-Cobalt Concentrate

TORONTO , March 1, 2018 /CNW/ - RNC Minerals ("RNC") (RNX.TO) is pleased to provide an update on value enhancement initiatives related to the Dumont Nickel-Cobalt Project. CRU has been engaged to complete a value-in-use and market value analysis of the nickel-cobalt concentrate expected to be produced by the Dumont Nickel-Cobalt Project.

"RNC is in the enviable position that, in addition to being the largest undeveloped nickel and cobalt reserve in the world, the Dumont Nickel-Cobalt Project is expected to produce the highest-grade nickel and cobalt sulphide concentrate in the world,¹ providing maximum flexibility for potential partners and offtake parties from a wide range of nickel consuming sectors, including the battery and stainless steel markets. As highlighted by Cobalt 27 in its recent announcement, Dumont concentrate is 'ideal for producing nickel and cobalt material feed to be sold directly into the battery industry,"² said Mark Selby , President and CEO of RNC Minerals.

Selby continued, "It is RNC's roasting approach that allows nickel concentrate to be utilized by a wide range of nickel consumers, including very large scale integrated NPI/stainless plants that convert feed into finished product at higher recoveries and at significantly lower processing costs, resulting in expected payabilities much higher than the 70-75% payability recently available in the nickel concentrate market. We look forward to the value-in-use analysis from CRU to confirm the market value of Dumont's nickel-cobalt concentrate."

Alternate Roasting Process RNC successfully completed a bulk concentrate test in early 2016 and, in co-operation with one of the leading Japanese trading houses, successfully delivered roasted concentrate samples to multiple potential end users across Asia and Europe utilizing RNC's alternate roasting approach.

RNC believes that market prices over the last several years from traditional nickel smelters and refiners results in the concentrate producer receiving approximately 70-75% of the contained value of the nickel in the concentrate, allowing the smelter/refiner to capture 25-30% of the concentrate value less their operating costs and recovery. 

After successfully demonstrating the potential of roasted nickel concentrate as a more valuable alternative to traditional smelting and refining in 2011, RNC worked with the Tsingshan Group ("Tsingshan"), beginning in 2012, to validate the concept. In 2014, Tsingshan began construction of the first plant to directly utilize nickel sulphide concentrate as part of the stainless steel making process and has since built an additional plant utilizing the roasted nickel concentrate process. Additionally, Tsingshan signed an offtake deal with Western Areas Ltd. in late 2016. RNC believes Tsingshan's successful use of roasted nickel concentrate in their production facilities in China is an important development for the nickel market.

RNC's work with one of the large Japanese trading houses indicates that roasters in Asia are able to process feed at an approximate cost of $30 /tonne. When combined with the average integrated NPI/stainless conversion cost of approximately $80 - $90 /tonne (according to Wood Mackenzie), the implied conversion cost is approximately $110 - $120 /tonne of concentrate (equivalent to approximately $400 per tonne of contained nickel for a 29% concentrate or approximately 3% of the current LME price of $13,800 per tonne). This compares very favourably to the 25-30% of the concentrate value believed to be currently captured by traditional smelters/refiners. The CRU value-in-use study will be used to estimate the terms that roasting market participants would require to be willing to process the nickel-cobalt concentrate expected to be produced by Dumont as compared to these current market benchmarks. 

Note: dollar amounts referred to above are US$.

Table 1: 2016 Concentrate Grade (% Ni) for Global Nickel Sulphide Operations Compared to Dumont Nickel-Cobalt Project¹(*Denotes Development Stage Project)

Table 2:   2016 Concentrate Grade (% Co) for Global Nickel Sulphide Operations Compared to Dumont Nickel-Cobalt Project¹
(* Denotes Development Stage Project)

Rank	Operation / Project	Concentrate Grade (Co %)	Ownership (main)	Location
1	Dumont*	1%	RNC / Waterton	Canada
2	Voisey's Bay	0.8%	Vale	Canada
3	Vale Sudbury	0.6%	Vale	Canada
4	Savannah Nickel	0.6%	Panoramic Resources	Australia
5	Mount Keith	0.4%	BHP	Australia
6	Vale Manitoba	0.4%	Vale	Canada
7	Kevitsa	0.4%	Boliden	Finland
8	Nkomati	0.4%	ARM	South Africa
9	Jinchuan	0.4%	Jinchuan	China
10	Other (10 operations)	0.1 – 0.3%

1.	Source: Wood Mackenzie and, with respect to Dumont, Technical Report on the Dumont Ni Project, dated July 25, 2013, available at www.rncminerals.com and under Royal Nickel Corporation's profile on www.sedar.com

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