#Australia #Perth #Cannon Resources #Kinterra Capital #Fisher East Nickel

Cannon Resources Unveils Preliminary Economic Assessment for Fisher East Nickel Project

Cannon Resources Pty Ltd, a nickel development firm based in Western Australia, has recently announced the results of a Preliminary Economic Assessment (PEA) for its flagship project, the Fisher East Nickel Project. The assessment outlines a promising economic future for the project, establishing a robust case for its potential as a significant contributor to Australia’s nickel market.

Key Highlights of the PEA

The PEA indicates a post-tax net present value (NPV) at an 8% discount rate of approximately $746 million and an impressive internal rate of return (IRR) of around 54%. These figures underscore the project's economic viability, demonstrating a compelling financial landscape for potential investors and stakeholders.

Project Overview

Cannon Resources' PEA reveals a strategic and cost-efficient development pathway for the Fisher East project. The assessment projects a substantial 15-year mine life, with an average annual production of around 23,800 tonnes of nickel equivalent during the first eleven years. The capital expenditure is estimated at $247 million, with a payback period of about two years, showcasing significant potential for rapid returns.

The 2025 Mineral Resource Estimate has seen a dramatic increase, now sitting at 20.6 million tonnes at a grade of 2.2% nickel equivalent. This is a 175% increase in tonnage and a 206% increase in contained nickel since Kinterra's acquisition of the site in early 2023. The project’s substantial growth trajectory reflects a systematic approach, including over 228 drill holes and rigorous engineering programs to maximize resource recovery.

Economic Metrics

The PEA outlines numerous favorable economic indicators:

• - Post-tax NPV (8% discount rate): $746 million
• - Post-tax IRR: Approximately 53.8%
• - Payback Period: Approximately 2.0 years
• - NPV-to-CAPEX Ratio: 3.0x
• - Lifetime Operating Cost: Approximately $4.66 per pound of nickel equivalent
• - Average Annual EBITDA: $207 million for the first 11 years
• - Average Annual Free Cash Flow: $131 million for the same period

This economic viability is underpinned by long-term commodity prices projected at $9.35 per pound of nickel, $21.82 for cobalt, and $1,231 per ounce of palladium, enhancing the project’s attractiveness to investors.

Strategic Development Plans

The PEA indicates that Cannon Resources will utilize a conventional underground mining method, specifically long-hole open stoping (LHOS), which aligns with the steep mineralization of the Kambalda-style orebody. The expected plant throughput is projected to be up to 1.9 million tonnes annually, with the mining plan focusing on three box cuts and declines across four key deposits, ensuring consistent and efficient operation.

Next Steps for Cannon Resources

As the company moves towards a final investment decision in early 2029, Cannon Resources is also exploring strategic partnership opportunities to further enhance the Fisher East project’s prospects. Strong interest has been expressed from potential stakeholders, reflecting confidence in the project's scalability and economic sustainability.

Cannon Resources' achievement in the PEA represents a critical milestone in the development of the Fisher East Nickel Project. With ongoing drilling activities, the company maintains a commitment to maximizing resource extraction and bolstering its financial potential within the competitive nickel market.

In conclusion, the Fisher East Nickel Project emerges as a promising player in Australia's mining sector, backed by strong geological prospects and supportive economic assessments. Investors and stakeholders are keenly watching Cannon Resources’ next moves as they pave the way towards a successful mining operation.