Baptiste Nickel Project

Low-Carbon Nickel. Made in Canada.

The Baptiste Nickel Project is located in central British Columbia and has the potential to be a high-margin, long-life, large-scale, and low-carbon mine with unparalleled flexibility to produce either a high-grade concentrate (60% nickel) for direct feed into the stainless steel industry or further refining into battery-grade nickel sulphate, cobalt precipitate, and copper concentrate products for the battery material supply chain.

Project Highlights

• After-tax NPV_8% of $2.01 Billion and IRR of 18.6% at $8.75/lb Ni
• 29-year mine operating life producing an average 59,100 tonnes per year of nickel
• Phased development approach, with expansion following the 3.7-year after-tax payback period
• Life-of-mine average C1 operating cost of $3.70/lb Ni ($8,150/t), assuming no byproduct credits
• Life-of-mine average annual pre-tax free cash flow of $578 million during operating years
• Strategic product flexibility, with a Base Case high-grade nickel concentrate (60% nickel) for direct feed to the stainless-steel industry, plus a Refinery Option to produce battery-grade nickel sulphate

Our Commitment to Collaborative Project Design

The Baptiste Nickel Project is in the early stages of development, with various options being considered for its design. The mine layout and tailings management plan outlined in the 2023 Preliminary Feasibility Study (PFS) represent just one of these potential options. Environmental studies began in 2022 to better understand the project area, and while they have helped shape the mine design presented in the PFS, we know that gaps in our knowledge remain. We are committed to refining our plans as we learn more.

We are currently exploring all potential tailings management options and aim to choose the most suitable option through a collaborative decision-making process. We greatly value the opportunity for collaboration with local communities and understand the significance of integrating Indigenous knowledge and perspectives into early project design and decision-making processes. To advance this goal, we initiated a series of collaborative mine design workshops in 2023. Initial discussions have emphasized the importance of respect and protection of land, including protection of water and designing for climate change resiliency.

In 2024, we plan to initiate a collaborative decision-making process with First Nations to evaluate key aspects of the mine design, including the location of the tailings facility and the routing of transmission lines.

2023 PFS Overview

The 2023 PFS Base Case outlines an open-pit mining project which will produce an average of 59,100 tonnes of nickel per year in concentrate over a 29-year mine life.  A phased development approach is considered in the PFS, with an initial mill throughput rate of 108,000 tonnes per day (Phase 1), followed by an expansion to 162,000 tonnes per day (Phase 2).  The expansion would be funded from free cash flow well after the initial after-tax payback period of 3.7 years.  The mining strip ratio averages 0.41 in the Phase 1, and 0.56 overall for life-of-mine (excluding capitalized pre-stripping).

Baptiste will utilize a conventional processing flowsheet with SAG-mill based grinding followed by magnetic separation, froth flotation, and a flotation tailings leach circuit.  Overall, Davis Tube Recoverable (“DTR”) nickel recovery is estimated to average 88.7% for the life-of-mine, with 93% of the nickel produced contained in a high-grade flotation concentrate (60% nickel) and the balance (7% of nickel produced) contained in a mixed hydroxide precipitate (“MHP”) produced from a tailings leach circuit.

Baptiste will be supplied with low-carbon power from the BC Hydro provincial electricity transmission grid, resulting in an estimated Scope 1 and 2 carbon intensity of 2.4 t CO₂/t nickel produced, placing Baptiste within the lowest decile of global nickel production.  The Project will be accessed by a road system consisting of upgrades and expansions to an existing forest service road network.  All mine tailings and waste rock are proposed to be managed within a single integrated facility that will utilize open pit pre-stripping material and waste rock for embankment construction.

Base Case economics are presented in the following table and are based on a $8.75/lb nickel price (USD).

Notes:

1. Exclusive of any byproduct credits.
2. Inclusive of operating cost, sustaining capital, expansion capital, closure capital, and royalties.
3. For production years.

The Mineral Reserves for the project are estimated at 1,488 Mt at an average grade of 0.13% DTR nickel (0.21% total nickel), resulting in 1,933 kt of contained DTR nickel metal (3,125 kt of total nickel metal) over the 29-year mine life.  Included in waste material for the PFS are 44 Mt of inferred material at an average grade of 0.113% DTR nickel.

Notes:

1. Mineral Reserves are reported effective September 6, 2023.
2. The Qualified Person for the estimate is Mr. Cristian Hernan Garcia Jimenez, P.Eng, an independent consultant.
3. Mineral Reserves were developed in accordance with CIM Definition Standards (2014).
4. Mineral Reserves are reported using a fixed 0.06% DTR Ni cut-off grade, which represent approximately US$9/t NSR value, which is above the economic cut-off grade of US$5.5/t.
5. The Mineral Reserves are supported by a mine plan, based on a pit design, guided by a Lerchs Grossmann (LG) pit shell. Inputs include $8.75/lb Ni, $1.98/t mining opex, $3.72/t process opex, $1.10 /t G&A opex, pit slopes varying from 42-44 degrees, and 85% process recovery
6. Life-of-mine strip ratio is 0.56 (W:O), excluding capitalized pre-stripping.
7. Ore and contained nickel tonnes are reported in metric units and grades are reported as percentages.
8. All figures are rounded to reflect the relative accuracy of the estimate. Totals may not sum due to rounding as required by reporting guidelines.

The critical path for project development runs through the environmental assessment (“EA”) and permitting process, with an anticipated EA decision in the first quarter of 2027.  Engineering studies are approximately 9-12 months off the critical path, with key events including the feasibility study and front-end engineering and design (“FEED”) ahead of the final investment decision (“FID”).  Based on current estimates, following a successful EA decision and permitting the project through 2027, the FID will approve the project to proceed with construction early works commencing in early 2028, followed by full construction and subsequent production of first nickel in the fourth quarter of 2030.

2023 PFS Refinery Option

The Refinery Option outlines an off-site refinery to upgrade a portion of nickel-in-concentrate to produce 40,000 tpa of battery-grade nickel sulphate for the electric vehicle battery supply chain, with the balance of concentrate continuing to be directly supplied to the stainless steel industry.  Along with battery-grade nickel sulphate, this option also supports the valorization of cobalt and copper as refinery byproducts.  The Refinery Option presents incremental capital expenditure of $448 million with an incremental operating cost of $1.02 per pound of nickel (C1 cost of $0.79/lb Ni, including credits for cobalt and copper byproducts), resulting in total NPV_8% of $2,127 million.

The refinery flowsheet has been optimized based on the results of FPX’s hydrometallurgical testwork program (see FPX’s May 17, 2023 news release).  The relative simplicity of the refinery flowsheet is centred in the optimization of the leaching circuit and the resultant simplification of downstream purification requirements.

In addition to the 40,000 tpa of battery-grade nickel sulphate, the refinery would also produce approximately 700 tpa of cobalt in MHP and 300 tpa of copper in concentrate.  For the Refinery Option, the balance of nickel produced at the Baptiste mine (over and above the 40,000 tonnes in nickel sulphate) would continue to be marketed to the stainless-steel industry.

For further information on Baptiste, see FPX’s September 6, 2023 news release or the NI 43-101 compliant PFS Report.

Download the 2023 PFS NI 43-101 Technical Report

Andrew Osterloh, P.Eng., Senior Vice President, Projects and Operations for FPX, is a qualified person as defined by NI 43-101. Mr. Osterloh has reviewed and approved the technical content of this summary.