unlocking the value of low grade ultramafic nickel...

Unlocking the value of low grade

ultramafic nickel deposits November 19, 2014

Johnna Muinonen

1

Disclaimer

Cautionary Statements Concerning Forward-Looking Statements This presentation contains "forward-looking information" including without limitation statements relating to mineral reserve estimates, mineral resource estimates, realization of mineral reserve and resource estimates, capital and operating cost estimates, project and life of mine estimates, construction of the mine and related infrastructure, the timing and amount of future production, costs of production, success of mining operations, ability to obtain permitting by the time targeted, size and ranking of project upon achieving production, economic return estimates and potential upside and alternatives. 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 RNC to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The feasibility study results are estimates only and are based on a number of assumptions, any of which, if incorrect, could materially change the projected outcome. Even with the completion of the feasibility study, there are no assurances that Dumont will be placed into production. Factors that could affect the outcome include, among others: the actual results of development activities; project delays; inability to raise the funds necessary to complete development; general business, economic, competitive, political and social uncertainties; future prices of metals; availability of alternative nickel sources or substitutes; actual nickel recovery; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; 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. The MOU with Tsingshan is non-binding and there is therefore no assurance that the strategic alliance with Tsingshan will result in any transaction or venture with Tsingshan. For a more detailed discussion of such risks and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, refer to RNC's filings with Canadian securities regulators available on SEDAR at www.sedar.com. Although RNC has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking 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 presentation and RNC 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 NI 43-101 Compliance The technical information pertaining to the Dumont project feasibility study in this presentation is based on RNC’s technical report dated July 25, 2013 that describes the results of the Dumont project feasibility study and was prepared in accordance with Canadian regulatory requirements by, or under the supervision of, Paul Staples, P. Eng. of Ausenco Limited, Sébastien Bernier, P.Geo. of SRK Consulting (Canada) Inc. and David A. Warren, Eng. of Snowden Mining Industry Consultants, all of whom are independent Qualified Persons as set out in National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"). The Mineral Resource estimate set out in this presentation was classified according to the CIM Definition Standards for Mineral Resources and Mineral Reserves (November 2010) by Sébastien Bernier, P. Geo (OGQ#1034, APGO#1847), Principal Consultant – Resource Geology at SRK. The Mineral Reserve estimate set out in this presentation was classified according to the CIM Definition Standards for Mineral Resources and Mineral Reserves (November 2010) by David A. Warren (OIQ 121481), Principal Consultant – Mining at Snowden. All other technical information in this presentation has been prepared by or under the supervision of Alger St-Jean, P. Geo., Vice President, Exploration of RNC and Johnna Muinonen P. Eng., Vice President, Operations of RNC, each a Qualified Person as defined in NI 43-101. The full Dumont feasibility study, prepared as an NI 43-101 compliant technical report, is available under RNC’s profile on SEDAR at www.sedar.com.

All currency references in U.S. dollars, unless otherwise stated.

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Dumont Project Summary

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Simple flowsheet

Low strip ratio 1.1:1

Competitive electricity costs C$ 4.5 cents/kWh

High grade concentrate – 29% nickel

Non-acid generating waste rock and tailings

All major support infrastructure in place (road, rail, power, water)

Significant communities nearby with long history of resource development

$US 1.1 billion NPV8% at $9.00/lb nickel

1.1 billion tonne reserve at 0.27% nickel

33 year project life

$1.2 billion initial capital investment for 52.5 ktpd mine/mill operation

Dumont Project Location Structural Advantages

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Dumont Site Layout

3

TSF 1

TSF 2

Waste

Overburden

Open

Pit

Low Grade

Ore

LGO

OB

LGO

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Dumont Mineralogy Summary

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Recovered nickel minerals

Pentlandite (Fe, Ni)9S8 25-33% Ni

Heazlewoodite Ni3S2 70% Ni

Awaruite Ni3Fe 70% Ni

Other Components

Serpentine (incl. Chrysotile)

Brucite

Magnetite

+/- Olivine

Pyrrhotite - Pyrite

Yields high-grade concentrate

1 cm

Source : 2013 Feasibility: Technical Report on the Dumont Ni Project dated July 25, 2013.

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Challenge 1: Nickel is contained in recoverable and non-recoverable forms

Challenge 2: Presence of Mg-silicate slimes increase slurry viscosity

Challenge 3: Produce a low cost, robust flowsheet

How do mineral processors address these challenges to reduce risk and understand value?

Characteristics of Low Grade Nickel Ultramafic Deposits

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Challenge 1: Understanding nickel in silicates

Initially in 2008 it was assumed Dumont had fixed nickel in silicates

By late 2010, early 2011 mounting evidence suggested that the fixed nickel assumption was incorrect

Unreconciled assays from mineralogy could not account for nickel head grade in variability samples

Ni flotation recovery was lower than expected in various areas

Realization that RNC needed to understand nickel in silicate variability in the deposit

QEMSCANTM (Quantative Mineralogy)

Electron Microprobe

Metallurgical tests

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Non-domained Rougher Recovery – All Samples

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R² = 0.168

0

25

50

75

100

0 0.2 0.4 0.6 0.8

% N

i R

ou

gh

er

Re

co

ve

ry (

ST

P)

% Ni in STP Sample

R² = 0.2704

0

25

50

75

100

0 0.1 0.2 0.3 0.4 0.5

% N

i R

ou

gh

er

Re

co

ve

ry (

ST

P)

% S in STP Sample

Traditional grade-recovery plots or sulfur-recovery plots cannot indicate recovery

Challenge 1: Nickel in silicates


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QEMSCAN Results: Variability of Sulphide Mineralogy

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*Defined by EXPLOMINTM Mineralogy

Challenge 1: Nickel in silicates Source : 2013 Feasibility: Technical Report on the Dumont Ni Project dated July 25, 2013.

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Predicted Recovery by Sulphide Domain

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R² = 0.7135

0

25

50

75

100

0 25 50 75 100% N

i R

ou

gh

er

Re

co

ve

ry (

ST

P)

% Ni Predicted Rougher Recovery

Heazlewoodite Dominant

R² = 0.8024

0

25

50

75

0 20 40 60 80

% N

i R

ou

gh

er R

ec

ove

ry (

ST

P)

% Ni Predicted Rougher Recovery

Mixed Sulphide

Heazlewoodite Dominant Recovery

=18.11+(0.0211*S)+(0.00039*Fe) Mixed Sulphide Predicted Recovery

=9.73+(0.0222*S)+(0.00055*Fe)

Pentlandite dominant group could not be regressed with high R2

Challenge 1: Nickel in silicates Source : 2013 Feasibility: Technical Report on the Dumont Ni Project dated July 25, 2013.

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Pn Dominant Domain – Performance Differences?

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Why do high Fe-serpentine samples result in lower recoveries?

Presence of Fe-serpentine indicates increased nickel in silicates

Presence of Fe-serpentine indicates low tenor pentlandite



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Frequency distribution for % Ni in Serpentine

Dumont – Electron Microprobe Summary



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Metamorphism - Serpentinisation Nickel enrichment of metallic minerals and domaining

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Olivine

Nickel sulphides

Serpentine

Magnetite

Nickel sulphides

Fe-Ni alloy(awaruite)

Dunite Serpentinite

Ni



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Ni in Silicates by Domain Type

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Low recovery performance in some Pentlandite samples linked

to presence of Fe-Serp, which tends to contains more nickel in

Serpentine than Mg-Serpentine (lower degree of

serpentinization)


Metallurgical Domain Average % Ni in Silicates

Haezlewoodite Dominant 37.3

Mixed Sulphide 34.1

Pn Dominant 31.1

Fe Serp Dominant 55.8


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Feasibility Study Domaining

14 Challenge 1: Nickel in silicates Source : 2013 Feasibility: Technical Report on the Dumont Ni Project dated July 25, 2013.

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Challenge 2: Viscosity

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STUCK IN THE

MILL!


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Rheology of Dumont Deposit

Tests were performed on 102 variability samples

All samples showed varying levels of “rheopexy” at higher percent solids

Rheopexy = Non Newtonian fluid behaviour where the slurry gets thicker the longer it experiences shear force

Grouped in 3 main groups

High but measurable rheopexic response (70%)

Extremely rheopexy (25%)

Thixotropic (5%)

Cause: Mg-silicate slimes generated during grinding (brucite and serpentine)

Potential Solutions

Reagents – expensive (operating costs)!

Dilution – expensive (capital costs)!

Desliming (physical separation)

Used in existing nickel ultramafic operations

Mt. Keith

Santa Rita

16 Challenge 2: Viscosity

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Desliming of Dumont Ore

Desliming was tested initially in 2008

Used a decanting method which did not provide enough energy to remove the slimes from the slurry

Wet desliming tested again in 2009 at CTMP in Thetford Mines

2” cyclone fed by a centrifugal pump

Tried various desliming mass removals

7%, 10%, 15%, 20%

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RNC Desliming Rig Set Up


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Impact of Desliming on Metallurgical Performance

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Overall recovery is unchanged

Concentrate grade is

significantly higher

Improves cleaner performance

and reduces equipment size

STP = 7% Wt to

Slimes

KIN = 20% Wt to

Slimes



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Challenge 3: Flowsheet Development

Goals

Low cost

Operating and Capital

Operable

Understand ore variability

Simplify circuit where possible

Use existing technology that currently operates at similar scale

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Comminution Variability Testing

20 Challenge 3: Flowsheet Development


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2010 Scoping Study Flowsheet


Source: 2010 Preliminary Assessement: Technical Report on the Dumont Ni Project dated September 30, 2010

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Dumont 2013 Feasibility Study Mill Flowsheet

Challenge 3: Flowsheet Development


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Reagent Suite Development for Dumont

Reagent (g/tonne) 2009 Estimate

2010 Preliminary

Assessment

2012 Prefeasibility

2013 Feasibility

Xanthate 550 324 140 80

CMC 1400 704 25 6

Frother 110 86 26 91

Calgon 1000 250 50 254

Acid 0 20 8000 3900

Fuel Oil 0 1.58L/t 0 0

$CDN/tonne $7.71/t $4.70/t $1.98/t $1.78/t


2009 Estimate: based on initial testwork 2010 Preliminary Assessement: Technical Report on the Dumont Ni Project dated September 30, 2010 2012 Prefeasibility: Technical Report on the Dumont Ni Project dated June 22, 2012 2013 Feasibility: Technical Report on the Dumont Ni Project dated July 25, 2013.

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Confirmation Testing with Locked Cycle Tests



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3D Plant Illustration - 52,500 tpd

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Conclusions

Dumont flowsheet: solutions to metallurgical challenges

Ni in Silicates

Slurry Viscosity

Focussing on the correct work during the study and flowsheet development stage reduces the risk

Understanding the deposit variability

Both in mineralogy and metallurgical response

Developing a flowsheet that is robust and able to process a range of ore characteristics in a low cost structure

Desliming

Simple reagent suite

Variability tests for key characteristics (recovery, comminution, viscosity)

Existing technology

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Acknowledgements

Royal Nickel Technical Team

Michelle Sciortino

John Korczak

Alger St. Jean

Centre de Technologie Minéral et de Plasturgie

Jovette Marois – Cégep de Thetford

SGS Minerals Lakefield

Khalil Nasrallah

Ausenco Solutions

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unlocking the value of low grade ultramafic nickel...

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