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Early works to commence at the Odysseus Project

Western Areas Ltd has announced that an early capital works program for the Odysseus Project at Cosmos has been approved by the Board. 

Western Areas Managing Director, Dan Lougher, said that the Company is proud that the counter-cyclical decision to purchase Cosmos in late 2015 is now rapidly crystallising into a significant organic growth project, with Odysseus to be the catalyst for our second production hub in Western Australia.

“We are very excited by both the Odysseus Project and the regional exploration potential that the greater Cosmos Nickel Complex demonstrates in both base and precious metals. We have taken this decision to commence early works, prior to the release of the DFS, due to our confidence in the overall project and just as importantly, our confidence in the nickel sulphide market.”

“The demand for Class 1 nickel sulphides in the battery and electric vehicle (EV) market is forecast to grow substantially over coming years. We believe that Odysseus is one of a very few select nickel sulphide projects that will be coming into production in a timeframe that will enable it to deliver into that growing demand profile, which we are seeing validated by the strong inbound interest from potential offtake parties and project investors,” Mr Lougher added.

The early works program will comprise three major work groups staged over an eighteen‐month period, commencing late this month. 

The first work program will include the refurbishment of existing evaporations ponds, pipeline upgrades and continuation of pit de‐watering. The existing mine camp, with a 520-person capacity, will also be upgraded in readiness to cater for up to 100 contractors and employees. 

The second work program will involve the construction of two new evaporation ponds and dewatering of the decline. 

The final work program will encompass infrastructure required to support the rehabilitation of the decline from the portal to 500 metres below the surface. 

Once the work programs are complete, Odysseus will be development ready based on the Prefeasibility Study schedule. Importantly, the Company will maintain complete flexibility to suspend the program at any time should there be an unforeseen requirement to do so.

The cashflow spend over the eighteen‐month program is forecast to be split approximately 60:40 over two nine‐month periods. Given the last reported cash at bank balance was in excess of $130 million, the Company has significant headroom to self‐fund the staged expenditure profile.

The DFS is progressing well and as recently announced, the Company expects Odysseus to have a mine life beyond ten years with average production in excess of 12,000tpa of contained nickel in concentrate. It is important to note that the DFS will not include the 66,000-nickel tonne Mineral Resource contained in the adjacent AM5 and AM6 deposits, nor the potential upside revealed from the significant massive sulphide intersections beneath Odysseus. The mine life extensions or increased production optionality associated with these will be considered in optimisation studies post the DFS, which is scheduled for release in the September quarter.