Giga Metals (TSXV: GIGA) and global trading and investment firm Mitsubishi Corporation agreed on Monday to form a joint venture company, Hard Creek Nickel Corp, to develop the Turnagain nickel-cobalt deposit in northern British Columbia, Canada.
As part of the deal, Mitsubishi will acquire a 15% equity interest in the joint venture firm for $8 million cash. Giga will receive an 85% equity interest in Hard Creek in exchange for contributing all related assets for the Turnagain project, its core asset. It will also be the project administrator.
Giga Metals will work on a pre-feasibility study (PFS) for the project with completion expected in the first half of 2023.
The deposit is described as one of the world’s largest undeveloped sulphide nickel and cobalt resources. The company is focused on metals critical to modern batteries, especially those used in electric vehicles and energy storage.
Giga and Mitsubishi said they intend to make of Turnagain one of the greenest and most environmentally friendly nickel projects globally. Hard Creek will continue the work of the Canadian company to explore the viability of the tailings to sequester CO2 from the atmosphere to achieve a carbon neutral project.
The sequestration technique converts silicate tailings minerals to carbonate minerals and the company has been testing it for almost a year.
A preliminary economic assessment (PEA) in 2020 for Turnagain estimated a surface mining operation with a carbon footprint of 2.24 tonnes of CO2-equivalent per tonne of nickel produced in concentrate, which, Jarvis noted, is an order of magnitude lower than the global average of 25.6 tonnes of CO2-equivalent per tonne of nickel.
The PEA envisaged an open-pit mine producing an average of 33,000 tonnes of nickel in concentrate and 1,962 tonnes of cobalt in concentrate every year for a total output of 1.23 million tonnes of nickel in concentrate and 72,592 tonnes of cobalt in concentrate over a 37-year mine life.
Initial capital costs were pegged at US$1.4 billion, with US$2 billion budgeted for sustaining capital over the life of the mine. Based on prices of US$7.50 per lb nickel and US$22.30 per pound of cobalt, the study outlined an after-tax internal rate of return of 4.9%. Initial capex could be paid back in just under 15 years.
This article originally appeared on www.Mining.com.