Plans to generate cash from the project look likely to kick off with the revival of operations at the Armstrong open pit, with a decline down to 300m and recover between 9400-10,400 tonnes of nickel from the 13,200t at 2.1% nickel resource.
Given the shallow nature of the mineralisation the would-be miner assessed both a top-down conventional open stoping method leaving rock pillars and conservative bottom-up stoping method using cemented and loose rock fill.
The top-down option recovers less tonnes over a shorter life, but achieves a higher production rate over a shorter mine life, while the bottom-up method recovers 1000t more metal over six extra months, but costs A$18 million more in extra stoping and processing costs - not enough to make the returns worth it.
Widgie managing director Steve Norregaard said the scoping study had exceeded expectations, highlighting a low-risk mining operation with strong economics, even at its conservative base case of a US$18,500/t nickel price.
In the base case, Widgie expects to recover A$21 million in free cashflow, achieving payback in 23 months. Net present value and internal rate of return are $17.3 million and 52% respectively.
Based on today's US$22,000/t spot price, free cash rises to $69 million, with payback cut to 13 months, and NPV and IRR rise to $60 million and 174%.
Widgie needs less than $24 million to get into production.
Mine life is expected to be about 27 months for the top-down option.
Widgie remains well funded to complete its feasibility activities with A$16.4 million in cash and no debt as reported at 30 June 2022.
The ore would likely be trucked to the BHP Kambalda concentrator, which previously processed material from the open pit between 2004-08.
The junior is about to start dewatering the Armstrong pit, and aims to finalise a definitive feasibility early next year.
Widgie has some $16 million cash remaining.
Widgie shares closed yesterday at 27c, valuing the company at $68 million.
It has traded between 18-67c over the past year.