Tag Archives: engineering procurement and construction

Artemis Gold locks in Blackwater EPC processing plant price with Ausenco

After a competitive bidding process, Artemis Gold has executed a binding memorandum of understanding with Ausenco Engineering Canada Inc providing for a guaranteed maximum price (GMP) for a fixed-price engineering, procurement and construction (EPC) contract to construct a 5.5 Mt/y processing facility and associated infrastructure at the Blackwater gold project in British Columbia, Canada.

The selection of Ausenco as the successful bidder was based on a proposal to engineer and construct the facilities for a GMP of $236 million ($188 million), subject to any technical or commercial changes requested by Artemis.

The MoU outlines the terms under which Ausenco will undertake further detailed engineering, which will form the basis of a final fixed EPC price that will not exceed the GMP. This Ausenco GMP is consistent with capital estimates in the company’s 2020 prefeasibility study on Blackwater.

A fixed price EPC contract on the processing facility and associated infrastructure represents by far the largest single component of the capital cost of Blackwater at approximately 40% of the PFS estimate of C$592 million ($470 million), Artemis says.

Ausenco has already undertaken a significant amount of detailed engineering work on the plant and will be working towards a final fixed-price EPC contract for the facilities scheduled for completion in the September quarter.

Artemis is also conducting a competitive bidding process for a GMP proposal in connection with a fixed price EPC contract for the construction of the electricity transmission line and associated offsite infrastructure, with an expected GMP award in the June quarter, it said.

Steven Dean, Chairman and CEO, said: “The execution of this MoU represents a significant investment of time and effort from management and multiple GMP bidders over the past several months. The Ausenco GMP bid serves as further validation of the initial capital costs estimated in the 2020 PFS with respect to the process plant and associated facilities, further de-risking the development of the project.

“Following a rigorous adjudication process of a number of competitive proposals, we are very pleased to be working with a world-class engineering firm such as Ausenco. Ausenco was also involved in the successful development at Atlantic Gold and the award of the GMP should give investors and potential project debt lenders greater confidence in the proposed schedule and initial capital cost to develop Blackwater on time and on budget.”

The 2020 prefeasibility study on Blackwater envisaged a three-stage development starting at 5.5 Mt/y from years 1-5, shifting to 12 Mt/y in years 6-10 and rising to 20 Mt/y in years 11-23. This would see gold production go from 248,000 oz/y to 420,000 oz/y, to 316,000 oz/y, respectively.

Clean TeQ spells out battery raw materials potential of Sunrise project

Clean TeQ Holdings and Fluor Australia have come up with a Project Execution Plan (PEP) for the Sunrise Battery Materials project in New South Wales, Australia, that, Clean TeQ says, confirms the asset’s status as one of the world’s lowest cost, development-ready sources of critical battery raw materials.

This builds on a 2018 definitive feasibility study on Sunrise that modelled the first 25 years of production at the project.

In production, it will be a major supplier of nickel and cobalt to the lithium-ion battery market, and scandium to the aerospace, consumer electronics and automotive sectors, according to Clean TeQ.

The PEP scope of works included a range of studies which have optimised metal production rates while holding autoclave ore feed constant at the approved maximum 2.5 Mt/y, it said. This saw average annual (metal equivalent) production rates of 21,293 t of nickel and 4,366 t of cobalt in years two to 11; and 18,439 t of nickel and 3,179 t of cobalt from year two to 25.

On top of this, the PEP considered a scandium oxide refining capacity of up to 20 t/y installed from year three, which can readily be expanded to 80 t/y with around A$25 million ($18 million) capital expenditure on additional refining capacity.

“As the scandium market grows, future investment in a dedicated resin-in-pulp scandium extraction circuit and further refining capacity offers the potential to increase by-product scandium production to up to approximately 150 tonnes per annum,” Clean TeQ said.

The pre-production capital cost estimate of $1.658 billion (excluding $168 million estimated contingency) reflects a significantly de-risked capital cost, with approximately 79% of total equipment and materials costs covered by vendor quotations, Clean TeQ said. Submissions were also obtained from contractors to validate the labour costs included in the total direct cost.

On the operating expenditure side, C1 costs came in at $4.31/Ib ($9,503/t) of nickel before by-product credits in years 2-11 and $4.58/Ib before by-product credits over years 2-25.

Using weighted average forecast (metal equivalent) sulphate prices over the life of mine of $24,200/t (including sulphate premium) for nickel and $59,200/t of cobalt, the project would generate a post-tax net present value of $1.21 billion, the company said.

Future value optimisation studies to assess opportunities to reduce capital expenditure in areas of off-site pre-assembly, modularisation and low-cost offshore procurement could further improve this return, it said.

The PEP assumed the project execution on an engineering, procurement and construction management (EPCM) basis. Prior to making a final investment decision, Clean TeQ will select an EPCM contractor for the engineering, procurement and construction phase of the project, it said.

Clean TeQ Co-Chairman, Robert Friedland, said: “Auto supply chains are coming to realise they are playing a game of nickel and cobalt musical chairs. We are half-way through the second verse and the music will eventually stop.

“We have a clear vision for how to create a sustainable auto supply chain of the future. Our team is proud to present that vision today. Sunrise is a long-life, low-cost, development-ready asset which is a template for consistent, sustainable and auditable nickel and cobalt supply. We cannot anticipate how long it will take to have the project funded and in development, but we can be patient with such a strategically important asset, and we are fully committed to ensuring it is developed with partners who understand the value that responsible supply chain integration brings.”

Although the level of activity associated with the PEP study and engineering works will now significantly reduce, Clean TeQ said a range of work-streams will continue in order to progress a number of value-adding deliverables aimed at minimising project restart time once funding is secured:

  • Work will be progressed on the long-lead electrical transmission line (ETL) work scope. The ETL application to connect to the NSW electrical grid is currently in progress and will continue through the 2021 financial year;
  • Progressing ongoing commercial discussions with landowners, local councils, the New South Wales state government and other impacted parties required for land access agreements for key infrastructure including the water pipeline and the ETL;
  • Surveying and planning for autoclave and oversize equipment transport routes to site;
  • Preliminary investigations to be undertaken on exploration licences for limestone resources, a key process reagent for which the company currently has a supply contract in place with a third party;
  • Test work and engineering assessing opportunities for potential further downstream processing of sulphates into battery precursor materials;
  • Ongoing environmental work including monitoring and compliance reporting;
  • The Sunrise Community Consultative Committee will be maintained along with several local community engagement/support programs; and
  • A range of scandium alloy development programs will continue to be progressed, consistent with Clean TeQ’s long term strategy to work with, and assist, industry players to investigate and develop new applications for scandium-aluminium alloys.

SMS group assigned to FEED work at Cinovec lithium project

European Metals Holdings (EMH) has appointed SMS group Process Technologies as the lead engineer for minerals processing and lithium battery-grade chemicals production at the Cinovec project in the Czech Republic.

Cinovec, a joint venture between European Metals (49%) and ČEZ Group (51%, through its subsidiary Severočeské doly), is operated by Geomet. The project has recently received investment of around €29 million ($34 million) of funding from EIT InnoEnergy, the principal facilitator and organiser of the European Battery Alliance, for the project, seeing it through to a construction decision.

Under the agreement, SMS group, a leader in plant construction and mechanical engineering for the technology metals and materials sector, will provide a complete front-end engineering design (FEED) study as the major component of the ongoing definitive feasibility study (DFS) work at Cinovec.

Under the agreement, SMS will provide the following to the Cinovec project:

  • Full process integration from the point of delivery of ore to the underground crusher through to the delivery of finished battery-grade lithium chemicals for battery and cathode manufacturers;
  • The FEED will include all of the process steps – comminution, beneficiation, roasting, leaching and purification;
  • The FEED will encompass both the lithium process flowsheet and the tin/tungsten recovery circuit delivering metal concentrates to refineries; and
  • The FEED is intended to deliver a binding fixed price lump sum turnkey engineering procurement and construction (EPC) contract with associated process guarantee and product specification guarantees for battery-grade lithium chemicals. The combination of these will greatly assist to underwrite project financing from leading European and global financial institutions lending into this new energy electric vehicle-led industrial revolution, European Metals Holdings says.

The FEED study will commence immediately and SMS group is expected to deliver the EPC contract, as the final component part of the Cinovec DFS, by the end of 2021.

Herbert Weissenbaeck, Senior Vice President for Strategic Project Development at SMS group, said: “Having successfully completed thorough technical due diligence, we believe in the compelling value proposition of Geomet’s Cinovec lithium/tin/tungsten project, which is set to become a cornerstone of the e-mobility driven European battery metals landscape. SMS group is delighted to deploy its second-to-none technology metals and materials production know-how and EPC capabilities into this exciting project.”

EMH Executive Chairman, Keith Coughlan, added: “SMS is the ideal engineering partner for the Cinovec project as it is based in neighbouring Germany with a globally-respected process design capability. The appointment of SMS is the culmination of a negotiation and due diligence process that has lasted over a year.

“EMH, Geomet and ČEZ have all been consistently impressed by SMS group’s capabilities and insights into the development of efficient high recovery plants capable of producing very high quality end-products. Successful delivery of the FEED study will provide a gateway to financing institutions and offtakers of the highest quality. We believe that the intended product and process guarantees will greatly enhance the project finance either directly through commercial lenders or through the recently announced collaborative agreement with EIT InnoEnergy.”

A 2019 prefeasibility study on Cinovec outlined a 1.68 Mt/y operation producing 25,267 t of battery-grade lithium hydroxide over a mine life of 21 years. This came with a capital cost of $482.6 million.

EcoGraf and GR Engineering sign LOI for 20,000 t/y graphite facility

EcoGraf has signed a letter of intent with GR Engineering Services for an engineering, procurement and construction (EPC) contract for the development of a 20,000 t/y battery-grade graphite facility in Western Australia.

The two companies expect to enter into a formal contract for the new, state-of-the-art manufacturing facility.

EcoGraf said the parties have been working to complete pre-development activities for the project and the company is finalising its arrangements with the Western Australian Government’s land development agency over a proposed 6.7 ha site in Kwinana.

The proposed development has a pre-tax net present value of $141 million, generating an internal rate of return of 36.6% and annual EBITDA of $35 million based on an upfront capital cost of $22.8 million for an initial 5,000 t/y of graphite, followed by a further $49.2 million to expand production to 20,000 t/y of battery graphite, according to EcoGraf.

EcoGraf says the development of the project is subject to a final investment decision, expected in the first half of the year.

Primero gets the nod for process plant work at Core’s Finniss lithium project

Primero Group has been conditionally awarded a multi-year build-own operate (BOO) and operations and maintenance (O&M) contract with Core Lithium at the Finniss project, near Darwin in the Northern Territory of Australia.

In addition to this, Primero has also secured recent early contractor involvement (ECI) contract wins with Agrimin Ltd (Mackay sulphate of potash project) and Hazer Group (hydrogen commercial demo plant), both of which deliver strong follow-on potential for large-scale engineering procurement and construction (EPC) contract roles, the company says.

The agreement with Core, worth around A$100 million ($69.9 million) at Finniss, follows the company being named preferred EPC contractor status early this year. The contract also offers the opportunity for extension after the initial four-year term, Primero said.

Furthering Primero’s partnering contract model, the preferred contractor status has been extended to include conditional award of Primero’s first BOO contract for the crushing and screening circuit, the EPC and the complete O&M for the processing facility, Primero said.

Core’s development of Finniss is initially centred on production from the high-grade Grants deposit as an open-pit mining operation and construction of a 1 Mt/y dense media separation process plant to produce a 5% Li2O spodumene concentrate for export.

The prefeasibility study on the project envisaged a total capex of A$53.55 million and A$168 million in free cash generation over a period of 26 months based on a price of $649/t for its concentrate.

Primero Managing Director, Cameron Henry, said: “Primero is continuing to build a strong foundation and reputation for delivery. Current revenue run rates demonstrate our ability to concurrently manage growth and deliver on multiple projects, across various Australian and global jurisdictions. Our existing client relationships, and the repeat nature of large amounts of our business, provide a strong platform from which to drive and achieve our strategic goals.”

Argex Titanium and China’s ECEC sign engineering agreement

Argex Titanium says it has signed a long term strategic cooperation agreement with East China Engineering Science and Technology Co, located in Hefei, China, to provide access to engineering skills to address the rapidly expanding Chinese demand for titanium dioxide (TiO2).

ECEC is, according to Argex, one of the largest engineering procurement and construction (EPC) companies in China and has built over 2,000 plants across a range of chemical products. “It also specialises in bringing new innovation to market with its strong and very large engineering capabilities,” Argex said.

ECEC has built more than 30 TiO2 plants in China over the past decades and is an expert in the construction of commercial technology for the manufacture of TiO2, according to the Toronto-listed company. It has also built paint production plants in China for one of the world largest paint manufacturer from Japan, it said.

“ECEC has reviewed numerous novel TiO2 production technologies and, after studying Argex, has concluded that it is now at the stage of full commercial deployment at a large scale,” Argex said.

Argex, meanwhile, intends to become a low-cost producer of TiO2 and other valuable by-products through an advanced proprietary chemical process. High-grade purity TiO2 will be produced at its facilities, serving major markets in North America and abroad, it says.

The agreement terms include a 15-year time commitment, a division of responsibility between Argex and ECEC, and a commitment to use Argex technology in China as well as other countries in which ECEC is active.

“The partners will offer EPC services to clients wishing to expand existing facilities or to construct ‘greenfield’ new plants,” Argex said. ECEC will provide marketing services in China and in other Asia countries, in addition to providing the basic engineering design based on the ore selection of a specific client. ECEC will, meanwhile, provide detail engineering and EPC contract bidding.

“The partnership with ECEC also brings ECEC’s long standing, project financing relationships with both domestic and international financial institutions,” Argex said. “ECEC sees in Argex the right partner, both, to transform the domestic TiO2 production capacity in China into environmentally-friendly and lower-cost production and also a technology partner to allow it to expand rapidly into various international markets. ECEC has built various plants across different countries in offering a full spectrum solution, bringing EPC services and financing as one full package.”

ECEC will immediately start work on three projects in parallel, the design and bidding for Argex technology centre in Quebec (pictured), Canada; a 25,000 t/y plant in China and a project in Vietnam.

“This represents an immediate financial benefit to Argex as ECEC will work on detailed engineering for all three projects in parallel, thanks to their strong and vast expertise and workforce,” Argex said.

ECEC will introduce Argex to TiO2 manufacturers in China which will become licensees for the Argex technology, according to the company.

Mazen Alnaimi, Chairman and Chief Executive Officer of Argex, said: “We are very happy to have formed this long-term partnership for the commercial application of our technology. ECEC is a very qualified and respected contractor with tremendous experience in the construction of TiO2 plants in China.

“The growth potential in the country for TiO2 projects is very exciting and we know the Chinese government is regulating legacy technology out of existence, leading to many revamps or replacements of existing facilities.

“We look forward to a mutually beneficial relationship with ECEC for years into the future and combined success in establishing the Argex technology as the preferred method of expansion in the Chinese market and throughout Asia.”

Eurasia secures Sinosteel EPC finance package for Monchetundra palladium project

Eurasia Mining says it has signed an engineering, procurement and construction (EPC) contract, with an associated mine finance package, for its Monchetundra PGM-gold-copper-nickel project, in Russia.

The contract with China’s Sinosteel follows ongoing discussions between the two parties, which have been taking place since issue of the mining permit for a circa-2 Moz (two platinum group metals and gold) deposit in November 2018.

Monchetundra has 1.9 Moz of palladium-led reserves and resources with platinum, gold, copper and nickel.

Sinosteel said: “We are delighted that Terskaya Mining Company, controlled by Eurasia Mining plc, has received the final mining permit for the Monchetundra project. We look forward to working with CKE (Central Kola Expedition – a contractor), TGK (Terskaya Gornaya Kompany) and Eurasia, to commence the EPC and develop the mine and plant at this exciting palladium, platinum, copper and nickel project.”

Christian Schaffalitzky, Chairman at Eurasia, said: “We are delighted to advance the Monchetundra project. The details include not only the engineering components, but also the financing and legal documentation. We will be busy over the coming months developing our plans with Sinosteel for the mine’s start up and expected move towards production.

CKE, Eurasia’s long standing working partner at Monchetundra, were recently awarded and have now commenced work on a detailed project report, required to be submitted and approved within one year of the issue of the mining permit. This contract was awarded to CKE by Eurasia’s subsidiary TGK.

Eurasia said: “The report will include an outline of the further geotechnical, hydrogeological, metallurgical and resource and reserve base work required as part of the broader mine development plan. The report is a statutory requirement and is on track to be completed and approved.”

The ground works and other studies detailed within the report will then contribute to a more detailed feasibility study of permanent conditions and a revised reserves statement made on the basis of the existing feasibility study and the reserves report already approved by the state.

“It is Eurasia’s intention to fast track the above and to run them in parallel with further mine studies and programmes as outlined in the EPC contract with Sinosteel,” the company said.

The Sinosteel EPC financing covers 85% (or $149.6 million) of a total contract value of $176 million. A $50 million sub-contract is specified within the contract and is assigned to Eurasia’s 80% subsidiary TGK, or a sub-contractor of its choosing, for engineering and pit development works in advance of mining.

GR Engineering secures EPC contract with Tellus at the Sandy Ridge kaolin project

GR Engineering Services has entered into an engineering, procurement and construction (EPC) contract with Tellus Holdings Ltd for its Sandy Ridge kaolin project in Western Australia.

Tellus, a public unlisted infrastructure development company in the business of developing geological repositories that provide waste storage, recovery and permanent isolation solutions and complementary salt and clay products, says it is after a fully integrated facility for the long-term storage, recovery and permanent isolation of hazardous and intractable waste and an associated kaolin mining operation, some 75 km northeast of Koolyanobbing, in Coolgardie.

The contract price is around A$50 million ($36 million), with the works to be delivered under a guaranteed maximum price model, GR Engineering said.

The company’s scope of work under the contract includes the EPC and commissioning of the waste cell infrastructure, access roads, raw water supply and other key facility infrastructure for the Sandy Ridge underground waste facility.

The contract is expected to be carried out in two stages, with stage one comprising engineering and design and long-lead procurement activities for the work. This stage is anticipated to commence in the coming weeks, subject to the satisfaction of conditions precedent, which primarily relate to Tellus’ proposed financing facilities.

Stage two execution of the works is intended to commence mid-year, subject to Tellus satisfying additional conditions relating to the balance of the Sandy Ridge project approvals, GR Engineering said. Stage two includes mining of the first open-pit kaolin pit (waste cell), plus container yards, site warehouses and offices, roads, a 71-room accommodation village and associated services and utilities.

Tellus said the facility commissioning and full operations are scheduled from early-2020.

GR Engineering’s Managing Director, Geoff Jones, said: “We are pleased to progress this opportunity with Tellus, which has followed GR Engineering’s involvement to date in the Sandy Ridge project’s feasibility study and preliminary design work.”

In addition to this contract, Tellus has signed a circa-A$2 million PMC contract with Turner & Townsend providing project management services that support the Tellus owners team in managing all development phase contracts including the EPC contract (above); ancillary construction and equipment supply contracts; and key operational contracts.

Tellus is proposing to develop the Sandy Ridge facility, Australia’s first dual open-pit kaolin mine and arid near-surface geological waste repository in a 70 million-year-old kaolin clay bed with a 25-year operating licence. The proposal would involve mining up to 290,000 t/y of kaolin clay and receiving up to 100,000 t/y of Class IV and V waste at the facility gate over 25 years.