Nova Operation

Ownership

IGO 100%

Location

The Nova Operation is located in the Fraser Range, approximately 140km east-north-east of Norseman and 220km south east of Kalgoorlie, with the project 38km north of the Eyre Highway.

The Ngadju People are the traditional owners of the land.

Background and History

The Nova discovery hole was drilled in July 2012.  A maiden resource was released some 12 months later in May 2013. In February 2013, the nearby Bollinger Deposit was discovered.
 
In August 2014, the Nova Mining Agreement was entered into with the Ngadju People, designed to deliver a variety of economic, education, vocational and cultural initiatives.  Shortly thereafter the Nova Mining Lease was granted by the Western Australian Department of Minerals and Petroleum.
 
Development at Nova commenced on 26 January 2015 and IGO acquired the Nova Project in September 2015 through the acquisition of Sirius Resources NL. In December 2015, the Nova Project Optimisation Study was released advising of a significant value up-lift for the Nova Project.

 

Commercial production commenced in July 2017 with the operation expected to reach nameplate production in the September 2017 quarter.

Geology

The Nova – Bollinger magmatic nickel-copper deposits are hosted within the lower granulite facies mafic rocks of the Fraser Zone of the Albany-Fraser Orogen.  The Fraser Zone is dominated by metamorphosed mafic rocks but also includes metamorphosed granitic and sedimentary rocks termed the Fraser Range Domain.  Much of the northern part of the Fraser Range Domain is obscured by younger rocks of the Eucla Basin, however it is interpreted that this domain is approximately 425km long, northeast trending, fault-bounded domain that is up to 50km wide. 

The host rocks of the Nova-Bollinger deposit consist of a suite of meta-gabbroic to meta-picrite cumulates which have been metamorphosed to a high metamorphic grade. These units are interpreted to have been emplaced as a layered sill in an extensional sedimentary basis. The deposit is situated on the north-western side of an eye-like structural feature which is best seen in regional and ground magnetics.
 
The nickel-copper mineralisation is interpreted to have formed initially as a typical magmatic segregation Ni-Cu deposit.  The sulphide assemblage of the ore mineralogy consists of pyrrhotite (~80-85%), pentlandite (~10-15%) and chalcopyrite (5-10%). This style of deposit has many features in common with various aspects of Canadian deposits such as Thompson, Raglan  and Voisey’s Bay.

 

Nova Project orebody
Nova Project orebody
 

Project Development

Since the commencement of the Nova decline, our contractor, Barminco, has completed, 15.9km of underground development and during this year, commenced stoping operations. The construction of the process plant and associated infrastructure, including the tailings storage facility, village, access road and aerodrome were all completed on time and on budget resulting in the first delivery of concentrate being achieved by December 2016.

During FY17, ramp up of the underground operation has continued successfully with life of mine ventilation systems and mine dewatering systems complete. Service installations including high voltage power water and telecommunications were also installed to serve as the life of the mine.

Ore Mining and Processing

By the end of FY17, the paste fill plant had been commissioned and ore production is now taking place over three levels to enable consistent ore feed to the processing plant. Development is continuing both at Nova and Bollinger.

Grade control drilling at Nova and Bollinger is well advanced and due to be completed by the end of the December 2017 quarter.

The process plant has transitioned to a continuous operation as the delivery of stope ore has become more consistent. Continuous operation of the plant has enabled ore recoveries and concentrate quality to approach design levels.

As part of the original design, the tailings storage facility is used as a water storage dam to store water pumped from an aquifer above the underground mine. Dewatering of this aquifer was successfully completed during FY17 to provide a process water source from the tailings dam.

Electric Power for the Nova operation is provided by Zenith Pacific’s 20MW power station under a build, own and operate contract. This power station has proved to be reliable and efficient. As part of the design, a concept was developed to construct a 6.7 MW solar power station. This project has taken longer than planned to reach construction stage due to the changing economic situation resulting from lower oil prices. Zenith Pacific and IGO are currently negotiating with ARENA to assist in funding of this project.

FY18 Guidance

Full year guidance ranges reflect an average of the expected outcome for the year, and half yearly results can vary significantly from annual guidance. For example, reference has been made to Nova progressing the ramp up to nameplate production during 1Q18. Consequently, marginally lower tonnes mined and processed are expected in 1Q18. This together with lower average grades in 1H18 versus higher average grades in 2H18, results in lower than pro-rata annual guidance in the first two quarters and higher than pro-rata annual guidance in the last two quarters. This is illustrated in the following table:

Nova Operation

UOM

1H18 Guidance Range

2H18 Guidance Range

FY18 Guidance Range

Nickel (contained metal)

tonnes

7,500 to 9,000

15,500 to 18,000

23,000 to 27,000

Copper (contained metal)

tonnes

4,000 to 4,500

6,000 to 7,500

10,000 to 12,000

Cobalt (contained metal)

tonnes

250 to 350

550 to 700

800 to 1,050

Cash cost (payable)

A$/Ib Ni

3.70 to 4.50

1.00 to 1.50

1.90 to 2.50

Capital Build capex (net) (1)

A$M

0 to 2

-

0 to 2

Sustaining capex

A$M

3 to 5

6 to 8

9 to 13

Development capex

A$M

30 to 32

10 to 12

40 to 44

Exploration expenditure

A$M

5 to 6

3 to 4

8 to 10

  1. Net refers to project creditors and trade receivables that will be capitalised to the project on a cash basis

Near-Mine Exploration

The focus for FY17 has been on the underground grade-control drilling, with up to five underground diamond drill rigs executing this work program. The grade-control drilling is scheduled for completion towards the end of CY17, at which point, the underground drilling focus will shift to exploration for resource extensions. Surface exploration activities include diamond drill testing of a number of electromagnetic plates along with the completion of a 2D seismic traverse.