Agata Nickel Processing Project

The Agata nickel processing project is held by API, a joint venture company in which TVIRD has the right to earn a 60% interest upon the delivery of a definitive feasibility study, subject to TVIRD having expended a minimum of $2 million and completing the definitive feasibility study. As of September 30, 2014, TVIRD has completed its requirement to spend a minimum of $2 million and has earned 45% of shares in API, which remain in escrow until satisfaction of other requirements. TVIRD spearheads development and eventual operations, the project is a joint venture with Minimax Mineral Exploration Corporation and MRL Nickel Philippines Inc.

While the current Agata DSO operation (See: Agata Nickel Laterite DSO Project) is focused on the upper limonite zones and the lower saprolite zones of the Agata laterite orebody, which consist mostly of high-iron/low-nickel ore, the Agata Nickel Processing Project will be focused on the lower limonite and saprolite zones in order to produce a mixed hydroxide product (MHP) with approximately 40% nickel content – a processed product in great demand in the global stainless steel market.

Once established, the proposed plant will be the first of its kind in the province of Agusan del Norte and will further expand the Philippines’ current ranking among the world’s largest producers of nickel.

The Agata Nickel Processing Project site is located in a 4,995-hectare Mineral Processing Sharing Agreement (MPSA) area located in the adjacent municipalities of Tubay, Jabonga and Santiago in Agusan del Norte province. It is accessible by land (approximately 1.5-hours driving time) from the provincial capital of Butuan.

The project site is located inside the contract area of the Agata DSO, which comprises a network of access roads, admin facilities and mining areas within 3.5 km from AMVI’s private port. DSO operations at the Agata project are strategically located within proximity to main markets in Asia and bear the opportunity for shipping all year round.

Site infrastructure is excellent with local sources of labour, fresh water and power (supplemented by back-up generators). The processing plant will be located within two kilometres of the port, thereby simplifying acid transport and other logistics, as well as keeping operating costs down. Deep water for ships up to 50,000 tonne capacity occurs within 250 metres of the coastline.

TVIRD has engineered an innovative and cost-effective two-stage method that will revolutionize the way nickel laterites are processed. Currently, the most common technology used is high pressure acid leach (“HPAL”), a process which generally requires intense upfront capital expenditures (“capex”) of over $1 billion. To avoid such high capex, TVIRD has engineered a two-stage process involving an initial Atmospheric Tank Leach (“ATL”) process and a secondary Low Pressure Acid Leach (“LPAL”) process. Combined, the CAPEX for this two-stage process in a modular plant that is capable of producing 7,000 tonnes of nickel equivalent product per year is expected to range between $150 million to $200 million, a substantially a substantially lower cost, while having the same anticipated low operating costs as HPAL.
While both the ATL and LPAL processes on their own are proven technologies – ATL is used as a standalone process for nickel laterite and copper oxide operations while LPAL is commonly used in zinc processing – TVIRD pioneers the interfacing of both technologies for optimized production and operational cost efficiency. This is the first time the two processes are combined for processing nickel limonite and saprolite ore.

Detailed plant design and construction will commence in 2015 as well as plans for plant construction, engineering, site development and procurement. TVIRD expects actual plant construction and commissioning to proceed the following year.

The laterite feed to the processing plant comprising limonite material and saprolite material would be mixed with sulphuric acid and undergo numerous steps to ultimately produce a nickel hydroxide product. This intermediate nickel product could either be sold as is or further processed to produce metallic nickel. The estimated capital cost for the nickel processing plant plus associated infrastructure (port, water, power, etc.) is expected to be less than US$100 million. The cash operating costs are estimated to be approximately US$4 per lb Ni (approximately US$9,000/t Ni), assuming the use of imported sulphuric acid.

On June 5, 2013, TVIRD, as a result of positive bench-scale test work carried out at the Agata Nickel Processing Project, commissioned and commenced operation of pilot-plant testing which will further define the technological parametres to be used in producing a Bankable Feasibility Study with the goal of building a commercial processing plant.

The positive test work on nickel (Ni) laterite ore, from the Agata nickel laterite deposit, confirms the Agata ore is highly amenable to acid leaching with a high rate of nickel extraction achieved at a low acid consumption rate. The process technology TVIRD is developing, and which has produced these results, aims to achieve maximum nickel recovery and low acid consumption which translates into increased metal production and lower operating costs.

Approximately one tonne of ore was sent to the Beijing General Research Institute of Mining & Metallurgy (“BGRIMM”) for the purposes of conducting bench-scale crushing, scrubbing, screening and leaching tests to confirm the optimal circuit configuration and to validate the process identified by TVIRD.

A team of three TVIRD metallurgists was seconded to the BGRIMM team for the duration of the test work campaign. TVIRD also setup a bench-scale laboratory in Manila. All optimum conditions as identified in the BGRIMM tests have been validated, with excellent reproducibility of results between the TVIRD and BGRIMM tests.

More than 70 leach tests have been conducted. These tests conclusively illustrate that the Agata ore is highly amenable to acid leaching. Overall extractions of 94% Ni has been obtained at a relatively low acid consumption rate of 650 kg/t ore. This translates to approximately 49 t acid/t Ni produced for ore grades of 1.5% Ni. The acid utilization efficiency is encouraging when compared to other atmospheric acid leach processes.

Approximately 12 tonnes of ore were sent to BGRIMM in order to continuously operate a pilot plant that consists of, amongst others, primary leaching (atmospheric) and secondary leaching (low pressure autoclave). To date, all ore has been blended, crushed, screened and milled. Leaching commenced on May 13, 2013 to test a high grade (1.5% Ni) and a medium grade (1.3% Ni) ore. Pregnant leach solution (“PLS”) from the BGRIMM pilot plant was then shipped to the Philippines and processed in the TVI downstream Ni recovery pilot plant.

The process involves the treatment of higher Ni grade ore (>1.3% Ni). Much of the high iron (Fe) grade limonite will be directly shipped as part of a DSO operation. Therefore, the ore feed to the process plant is depleted of limonite. In addition, the higher grade Ni is associated mainly with the saprolite ore (which occurs beneath the limonite in the ore profile) – therefore, once the higher grade ore is considered, the ratio of limonite:saprolite that will be fed to the process plant is approximately 8% limonite:92% saprolite.

The process consists of separating the ore into a high iron (Fe), low magnesium (Mg) fraction to feed the primary leaching stage and a low Fe, high Mg fraction, to feed the secondary leaching stage. Leaching is conducted in two stages to minimize acid consumption, as well as to clean the PLS of Fe.

PLS is recovered by a counter current decantation (“CCD”) circuit and then further refined using ion exchange (IX), and finally precipitated and filtered to produce a nickel hydroxide product (“NHP”) of 53% Ni content. This NHP is a versatile product since it is a refined intermediate product, and therefore, due to its purity, it is easily refined into Ni metal by potential off-takers.

Approximately 30 tonnes of ore were mined from a variety of test pits that cover the Agata ore body to provide the samples. Test pits were carefully selected from the available drill hole data to accurately reflect the ore that is expected to feed the process plant. Limonite and saprolite ore was separately mined, blended and loaded into sealed drums to preserve ore moisture.

On October 17, 2013, TVIRD provided an update on the positive test work results for its Agata Nickel Laterite Ore project. The BGRIMM pilot plant operation was conducted from May to July 2013 and the results are encouraging and in line with expectations as obtained from positive bench-scale test work.

The key outcomes of the BGRIMM pilot plant were as follows:

• An overall nickel extraction of 93.5 – 94.5% may be consistently achieved at an acid consumption of 48-50 t acid/t Ni leached. This has been shown as a result of an extensive BGRIMM pilot plant campaign, in which 4,300 kg of feed ore was leached.

• Leaching performance achieved is near identical to that obtained during the bench-scale test campaigns conducted at BGRIMM and the in-house facility in Manila.

• The 2-stage leaching process proposed is robust and yielded similar results for the variety of ore types tested.

• The leaching pilot plant operation allowed determination of other circuit design data such as residence time, operating temperature, feed slurry density, etc.

• Vendor settling tests confirmed fast settling nature of the feed ore, and leach residue. Acceptable underflow density obtained means that the leach circuit can be operated at 35-40% solids and the CCD circuit can be designed to achieve 98-99% recovery of soluble Ni over 7 CCD stages. All design data for pre-leach and CCD thickener design has been obtained.

• Limestone and lime consumption were determined from the continuously operating pilot plant for the neutralization of the washed leach residue. Additionally, residence time and other design parametres were obtained.

• Vendor settling tests have confirmed the expectation that the filtration rate of the washed and neutralized leach residue is slow, but feasible to incorporate this unit operation in the full scale plant flowsheet. All data to allow the design of the residue filtration has been obtained.

• A Mixed Hydroxide Product (“MHP”) containing an average of 36% nickel was produced by treating the PLS with soda ash/caustic soda. It was shown that it is possible to produce an MHP containing >40% Ni, if a 2-stage precipitation circuit is used.

Approximately 8,000L of the nickel-rich liquor from the BGRIMM pilot leaching plant was shipped to the Philippines for use as the feed stock to the TVI nickel purification and recovery pilot plant, established to produce a Nickel Hydroxide Product (NHP, containing about 50-53% Ni). The PLS was then processed in the TVIRD pilot plant as follows:

• All 8,000L of PLS was purified and the Ni concentration was increased by using the continuous counter-current ion exchange (“IX”) process developed by TVIRD. Ni recovery to eluate was 99.3%.

• The acid content of the IX eluate was then neutralized and the acid free eluate separated from the solid gypsum through a thickening stage and Ni then precipitated from this. After a 2nd precipitation stage, >99% of Ni in solution was precipitated.

• To ensure high product purity, the Ni product was harvested from the 1st Ni precipitation stage. Ni rich slurry from the 1st Ni precipitation stage was thickened and a portion of the thickener underflow stream recycled as seed to the feed of the 1st stage Ni precipitation, while the remainder was washed and filtered, thereby constituting the final NHP product.

• NHP filter cake was successfully produced February 7th, 2014 with a 52% to 54% Ni grade at the TVIRD pilot plant. Impurities such as Fe, Ca and Mg are low enough for the NHP to be considered a refined intermediate product. This implies that NHP may be converted to nickel oxide and nickel metal without the need for additional refining, thereby offering possible offtakers with a versatile product alternative.

The successful testing now at the TVIRD pilot plant and the production of NHP will allow a comparison of processes and products to enable the selection of a final process route as part of the Bankable Feasibility Study that is currently underway.

The TVIRD pilot plant has already processed all of the 8,000L of PLS received from BGRIMM. NHP produced will be characterised by a 3rd party facility, and a NHP specification sheet will be developed. NHP, together with the specification sheet, will be sent to potential offtakers for evaluation.
The final stage of pilot plant operation will comprise of treatment of the barren solution from the IX plant to produce an effluent that is acceptable for disposal as well as ecological tests for residues.

The DFS scope of work was separated into two components: (1) a Philippine in-country component for items such as port, infrastructure, mining, residue storage and water supply; and (2) a Process Plant and Acid Plant component.

The in-country component was conducted by Philippine-based engineering companies as well as the TVIRD project team to ensure that this part of the scope is integrated optimally with the DSO project to increase operational and cost efficiency. Work completed to date includes the design of: (i) a management plan that aims to integrate a staged backfill plan with proposed mining stages while enabling progressive rehabilitation of mining areas to take place; (ii) a leached ore storage facility for the containment of residue generated from the ATL processing facility; (iii) a brine management system which would treat brine solution from the processing plant for safe discharge into the ocean through a subsea diffuser according to the release requirements of the Department of Energy and Natural Resources; and (iv) a water conveyance system to provide a dedicated water supply to the operation.

The Process Plant and Acid Plant component was designed by the Beijing General Research Institute of Mining & Metallurgy (“BGRIMM”) and a prominent Chinese acid plant supplier, respectively. TVIRD selected BGRIMM to complete the process plant design due to its reputation as an international Chinese engineering company well experienced and recognized as a leader in nickel processing research with access to premium quality, cost-effective Chinese process equipment. The impact of this selection will be significant as approximately 80% of the project capital cost is related to the process and acid plants. The relationship with BGRIMM is further supported by its previous work on the project which involved extensive bench and pilot scale testing. As such, test work seamlessly flowed into flow sheet development, process design and engineering and cost estimation with the same technology partner.

To date, process and acid plant engineering has been completed. This design culminated in a 3-D model of the plant, with select static 3-D images available for viewing at www.tvipacific.com. Vendor quotations for all equipment have been received and integrated into the overall plant capital calculations. All raw materials and reagent requirements have been determined and vendor quotations obtained. This, together with other items such as labour costs, has been compiled to provide the process and acid plant operating cost. Both capital and operating costs are in line with previous indicative expectations.

It is expected that the DFS will be completed by the end of 2014.

The table below shows results of the resource estimate at a cut-off grade of 0.5% nickel for the limonite horizon and 0.8% nickel for the saprolite horizon. This resource estimate is exclusive of the other regional nickel laterite deposits Agata South, Bolo-bolo and Karihatag.

The mineral resource estimates were produced by Mark Gifford MSc (Hons), who is a Fellow of the Australian Institute of Mining and Metallurgy (FAusIMM) and an independent qualified person as defined by NI 43-101, in conjunction with Quantitative Group Pty Ltd (QG) in Perth, Australia. A total of 593 drill holes were completed at Agata North for 10,851 metres, and 11,100 core samples were used in the resource estimate. The resource estimation method applied was Ordinary Kriging. Cut-off grades applied to the resource were 0.5% nickel within the Limonite zone and 0.8% nickel within the Saprolite zone.

Sample preparation and assaying were performed by Intertek Testing Services, Phils., Inc. (“ITS”). The ITS Phils. facility is among Intertek’s global network of mineral testing laboratories. Each sample is analyzed for nickel (Ni), cobalt (Co), iron (Fe), magnesium (Mg), aluminum (Al), silica (SiO2), CaO, Cr2O3, K2O, MnO, Na2O, P2O5, and TiO2. Whole rock analyses are done using X-ray Fluorescence (XRF). The samples are fused using lithium metaborate. XRF analysis determines total element concentrations that are reported as oxides. ITF mineral testing laboratories implement quality protocols. Normal Quality Control and Quality Assurance procedures were carried out, using a system of repeat analyses plus split sample analyses and the use of standard reference materials and blanks. Assay verification was carried out using standard samples and re-assaying field and pulp duplicates.