Dumont Project Site & Pilot Plant Visit. 19 January 2011

Transcription

1 Dumont Project Site & Pilot Plant Visit 19 January 2011

2 Disclaimer Cautionary Statements Concerning Forward-Looking Statements This presentation contains forward-looking information which may include, but is not limited to, statements with respect to the future financial or operating performance of the Company and its projects, the future price of metals, the estimation of mineral reserves and mineral resources, the conversion of mineral resource estimates to mineral reserve estimates, the realization of mineral reserve and mineral resources estimates, the timing and amount of estimated future production, costs of production, capital, operating and exploration expenditures, costs and timing of the development of new deposits, costs and timing of future exploration, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation expenses, title disputes or claims, limitations of insurance coverage and the timing and possible outcomes of pending litigation and/or regulatory matters. Often, but not always, forward-looking statements can be identified by the use of words such as plans, expects, is expected, budget, scheduled, estimates, forecasts, intends, anticipates, or does not anticipate or believes or variations (including negative variations) of such words and phrases, or state that certain actions, events or results may, could, would, might or will be taken, occur or be achieved. Accordingly, readers should not place undue reliance on forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company and/or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others: the actual results of current exploration and development activities; project delays; funding needs; general business, economic, competitive, political and social uncertainties; future prices of metals; availability of alternative nickel sources or substitutions; actual results of reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; the future cost of capital to the Company; possible variations of ore grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; political instability, terrorism, insurrection or war; delays in obtaining governmental approvals, necessary permitting or in the completion of development or construction activities, as well as those factors discussed in the section entitled Risk Factors in the prospectus of the Company dated December 9, 2010 (the "Prospectus") and available at Such forward-looking statements are based on a number of material factors and assumptions identified in the Prospectus. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forwardlooking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this prospectus and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Statement of Qualified Person Preparation of this presentation has been supervised by Alger St. Jean, P.Geo., Vice-President, Exploration of Royal Nickel and a Qualified Person as defined in NI For more information on the Dumont Nickel Project, please refer to Royal Nickel s NI compliant technical report Preliminary Assessment of the Dumont Property Launay and Trecesson Township, Quebec, Canada dated as of September 30,2010 and available on Royal Nickel s website and on SEDAR at 1

3 Presentation Overview Location & Infrastructure Property Deposit Overview Development of Geometallurgical Modeling Pre-Feasibility Study Work to be Completed Community 2

4 Location One of World s Best Mining Jurisdictions (1) Dumont Nickel Project Location Malartic Québec a miningfriendly province Established mining district and proximity to local communities minimizes infrastructure costs Rail / road links facilitate access Grid power available at Quebec rate of C$0.05/kWh Well-defined permitting process Source: Technical Report (1) According to the Fraser Institute s Survey of Mining Companies mid-year report 3

5 Regional Rail Network

6 Regional Natural Gas Network 5

7 Local Situation Royal Nickel Dumont Project HWY 109 Dumont Project located 25 km west of Amos. Launay HWY 111 Villemontel Amos Road, rail on site. Municipal Airport HWY109 RNC Office Power and Natural gas in Amos. Strong Local Support

8 Dumont Mineral Rights Residual Interests Marbaw 3% NSR reducible to 1.5% for $10M Sheridan-Ferderber & Frigon 2% NSR reducible to 1% for $1M Griffis & RNC No residual interest

9 Large Resource Large Option Value Resource open at depth over entire strike length. Current drilling (4 holes) confirms extension of mineralization below current resource extent. 1.2 km Dumont Resource Estimate Resources (k tonnes) Grade (%) Contained Metals (mm lbs) Contained Metals (k tonnes) Measured 155, % Indicated 1,003, % 5,967 2,707 Measured + Indicated 1,159, % 6,952 3,154 Inferred 581, % 3,198 1,451 Source: Technical Report 3.75km 8

10 Dumont Geology Zoned / Layered Mafic- Ultramafic Intrusion Ni Mineralization Hosted in Dunite Orebody drilled at 100 X100 m centers with 50 X 50 m drilling locally proving continuity Claim area provides space for mining & processing infrastructure.

11 Mineralogy Drives Low Strip & Bulk Mining Mineralization extending hundreds of metres in width Low strip ratio 1.24 High tenor nickel minerals yield high grade concentrates Sulphide: Pentlandite (33% Ni), Heazlewoodite (73% Ni) Alloy: Awaruite (72% Ni)+Fe Detailed mineralogical testing to fully define ore characteristics Waste rock and tailings non-acid generating due to absence of pyrrhotite and pyrite Additional exploration potential at depth >0.2% outline resource Dumont Cross Section 8100E: Surface 310m el Source: Technical Report Scoping Study Pit Shell Deposit Remains Open at Depth 10

12 Dumont Ore Mineralogy Core Photo Serpentinized Dunite 195 Qemscan (Explomin) Samples Mineral Mean Max Min Std dev Serpentine* 89 % Magnetite 4 % Brucite 3 % Olivine 2 % Pentlandite 0.3 % Heazlewoodite 0.1% Awaruite 0.1% * Includes chrysotile Olivine Histogram Qemscan Image

13 Work Supporting Scoping Study Geology and Deposit Modeling Drilling : Resource Defintion (>90,000m), Geotechnical Surface Mapping, geophysics Structural Modeling Resource Estimation Geometallurgical modeling Metallurgical Process Development Identification of critical metallurgical parameters Development of standard process flowsheet Domain Composite drilling & variability testing Sampling for Pilot Plant Mine Engineering Preliminary Geotechnical Studies» Rock Mechanics Slope determination» Overburden Characterization» Hydrogeology

14 Exploration and Development Work Environmental Baseline study. Water, fauna, flora, archeology. No major issues Laying groundwork for environmental impact study. Preliminary Environmental geochemistry study Acid Rock Drainage potential Leaching potential Tailings and Waste rock will be non acid-generating Simplifies tailings and waste management. Surface Rights acquisition Purchase and options to purchase critical private surface rights

15 Exploration Data Collection Drilling Logging Secure DATABASE Sample Analysis Sample Preparation

16 Geometallurgical Modeling Key to predicting recovery in any given portion of the deposit is knowing the nickel mineralogy (Nickel in Sulphide vs Awaruite vs Silicates). Use correlation between Mineralogy Data (restricted) and Assay Data(distributed) to develop a predictive model for nickel mineralogy over the entire deposit. Function (ASSAY DATA) = MINERALOGY Recovery equations derived from metallurgical variability testing (Domain Composites) used to calculate recovery for each block. Recovery is a function of mineralogy. Recovery,TCs applied to each block to yield an NSR model.

17 Assay Data (in all drill holes) Distributed Dataset 51,974 samples in 213 holes Factor Analysis Au Pt PdAg Al As B Ba Be Bi Ca Cd Co Cr Cu Fe Ga Hg K La Mg Mn Mo Na Ni P Pb S Sb Sc Sr Th Ti Tl U V W Zn SG MS

18 Mineralogical Data (Explomin) Restricted Dataset 195 samples (now 588) Abundance of Awaruite, Pentlandite, Heazlewoodite, Magnetite, Olivine, etc. Establish correlation between factors from assay data and mineral abundances. Develop Regression.

19 Geometallurgical Model (Mineralization Type by mineral abundance) Sulphide Alloy Mixed Sulphide: (Pn+Hz)/AW>5.5 Mixed: (Pn+Hz)/AW in between 5.5 and 0.85 Alloy: (Pn+Hz)/AW<0.85 Fields in Model: SG, NI, CU, CO, PT, PD, AU, AWA, PEN, HZL, MAG, SUL_AW

20 Metallurgical Data (Domain Variability Composites) 32 tests from 5 holes (70 from 9 holes planned) 2008 Used to develop recovery functions based on mineral abundances predicted in geomet model Developed independently for Domain 4+5 Domain 3

21 Domain Variability Composites

22 Recovery Model D5 D4 D3

23 NSR Model

24 Scoping Study Layout at end of mine life (yr20)

25 Proposed PFS Work Program Resource Definition Increase confidence of resource in pit-shell Add tonnage within pit-shell (convert waste to mill-feed) 46 holes; 17,500 metres; Collect comminution data Augment, Refine and Audit Geomet Model Geotechnical Rock Mechanics / Slope Stability 10 holes; 5200metres; Overburden Characterization -Pit & Infrastructure 64 sonic holes (27 monitored); 30 CPT Hydrogeology / Hydrology Environmental Geochemistry Tailings and Waste Characterization 90 samples across all rock types and entire deposit Begin in-situ characterization cells for waste & tailings Community Relations Define Communications Strategy Begin formal consultation 24

26 Proposed PFS Work Program Current Data Points Existing Holes Outcrop Planned Data Points Resource Rock Mech. Overburden 25

27 Proposed PFS Work Program Current Data Points Existing Holes Outcrop Planned Data Points Resource Rock Mech. Overburden 26

28 Addressing Community Issues Community relations Stakeholders matrix and risk analysis social acceptance strategy. Working with Transfert Environnement. Discussing the basis of an eventual IBA (employment opportunities, job training, business opportunities) with Abitibiwinni First Nation (ongoing). Environmental Geochemistry: Initiating Phase 2 of tailings and waste rock characterization program ABA, ARD, Leaching; Designing on-site experimental cells using Pilot Plant tailings to study: Neutral contaminated drainage potential Long term carbon sequestration (offsetting GHG footprint) Chrysotile management Hydrogeology / Hydrology Geochemical characterization of groundwater (with UQAT); Modelling of the open pit impact on local water table (planning stage); Characterization of the Launay water-bearing esker and modelling of the potential impact of the Dumont infrastructure on the water quality/quantity (propose joint-venture with UQAT, planning stage). 27

29 Carbon Sequestration Mineral Carbonation A Spontaneous reaction between carbon dioxide (CO 2 ) and silicate rocks containing magnesium (serpentine) leading to the formation of carbonate minerals that are geologically stable and harmless to the environment (magnesite), thereby permitting the storage of CO 2 in a stable, inert and solid form. Serpentine + Atmospheric CO 2 Magnesite Spontaneous mineral carbonation of Dumont tailings may offset the carbon footprint of the Dumont mining and processing operations. This rapid reaction also converts chrysotile to magnesite thereby reducing the risk of airborne chrysotile.

30 Proposed Social Integration Strategy - PFS 29

31 Timeline Scoping/ Pilot Plant Testing Pre-Feasibility Feasibility Permitting Long Lead Items Construction Commissioning & Ramp Up The following milestones provide material additional information which further de-risks and increases the value of the project: Completion of 1 st run pilot plant testing Q Completing of Pre-feasibility Study Q Feasibility study Mid

32 Metallurgical Overview January 19 th, 2011

33 Presentation Overview Rougher Recovery Testing Miniplant Operation Optimization Opportunities Reagents Grind size Primary Grinding Circuit 2011 Prefeasibility Study Plan

34 Actual Rougher Recovery Rougher Recovery Equations Rougher recovery basis for scoping study was 32 lab scale tests from 5 drill holes An additional 38 tests have been completed (total 70) Predicted Recovery Vs. Actual for Additional Domain Samples y = x R² = Results show that the scoping study equations continue to adequately predict performance Equations are being updated for the PFS to include Ni in silicates and other factors that effect recovery Predicted Rougher Recovery

35 Miniplant Operation Miniplant circuit defibering, wet ball milling, desliming, rougher flotation (40 min residence time), magnetic separation Goals Confirm STP laboratory rougher results achieved in scoping study Done, analysis in progress Optimize flowsheet (in progress) Reagents, grind size Cleaning circuits Define concentrate grade/recovery curve Provide engineering design criteria for PFS

36 Grind Size Optimization Scoping Standard Test Procedure Initial grind 100 Mesh (150 microns) Secondary Grind 200 Mesh (74 microns) Current laboratory work is investigating the optimum grind size Testing 48 Mesh (297 microns) and 65 Mesh (210 microns) If results are positive, potential for: operating savings from energy reduction reduction in sliming and viscosity issues

37 Reagent Optimization In the scoping study, reagent cost was 70% of the consumables operating budget and 50% of the total mill budget The largest single cost to the mill opex is CMC which acts as a dispersant and MgO depressant at a cost of $US1.78/tonne Preliminary results show that a significant reduction in this use may be possible with a slightly coarser grind In addition, other reagents are being tested that may provide metallurgical benefit

38 Grinding Circuit Optimization The scoping study used a 2 step wet & dry crushing process using Vertical Shaft impact crushers for fine crushing to allow dry size reduction and fiber removal PFS is looking at utilizing either a dry or wet SAG options in a single crushing stage Potential for significant capex, opex, and sustaining capex reductions Ausenco Minerals and Metals has been awarded an engineering contract to assess the various primary comminution alternatives This study will provide capital and operating costs for each option along with an analysis of technical risk The results from this study will be used to choose the best comminution circuit for the PFS concentrator design.

39 2011 Work Plan Identify flowsheet and reagent regime Primary grind circuit Primary grind size, desliming/defibering, fines recovery, cleaning circuits and regrind Reagent optimization Establish recovery figures and concentrate quality with higher degree of confidence Pilot plant Study variability of metallurgical performance across orebody Additional STP testing, grindability tests Establish preliminary concentrator design factors Lab Pilot plant Complete PFS concentrator design