Atlantic Nickel Resource and Operational Update for Santa Rita

LONDON, June 2, 2020 /PRNewswire/ --

Highlights

• Decisive action taken to safeguard employees and local communities during the COVID-19 pandemic
• Santa Rita remains fully operational with minimal disruptions to supply chain
• First quartile C1 cost performance of US$3.29/lb Ni achieved in Q1 2020, net of by-products
• Second and third shipments complete; more than 30,000 tonnes of nickel concentrate produced to date
• Updated Mineral Resource (underground) increased to 168 Mt at 0.59% NiS, 0.19% Cu
• Completion of an underground PEA expected in Q3
• Production on track to reach nominal annualised capacity in 2020

Atlantic Nickel ("Atlantic Nickel" or the "Company") and Appian Capital Advisory LLP ("Appian") are pleased to announce an update to both the operations and underground resource of the Santa Rita nickel sulphide mine ("Santa Rita" or the "Mine") located in Bahia, Brazil.

Protecting our people and the community

As the COVID-19 pandemic unfolds, our priority remains the safety of our people and the communities in which we operate. Atlantic Nickel has adjusted working practices to protect employees: including enhanced screening, daily body temperature checks on every individual that enters the site, additional PPE equipment and hand sanitizer, and implementation of social distancing measures on the premises and on transport. In addition, we have been working alongside authorities to support the roll-out of robust mitigating actions in the communities in which we operate, including the acquisition of 6,000 units of rapid tests and a dedicated infrastructure to accommodate COVID-19 frontline health professionals. So far, these measures have been effective at limiting the spread of the virus though we continue to monitor their effectiveness to ensure our people and communities remain safe.

Operational update

Santa Rita remains fully operational despite the challenges caused by COVID-19. The Company has produced over 30,000 dry metric tonnes of nickel concentrate to date and is on target to ramp up to 105,000 tonnes by the end of 2020. The Brazilian government has declared mining an essential business activity and to date, there have been no material disruptions to our supply chains. Most of Atlantic Nickel's suppliers and contractors are based in Brazil. Restrictions to travel have caused minor delays to the receipt of certain parts sourced internationally and some on-site collaboration with consultants based outside of Brazil, though altogether have had a limited impact on operations.

Appian has worked with Atlantic Nickel's management team to resume production with a revised operating strategy and optimised processes. This has allowed a safe, capital efficient restart that has taken advantage of the existing infrastructure. Costs continue to decline as the operation ramps up. In the first quarter of 2020, C1 production costs were US$3.29/lb Ni net of by-products placing the Santa Rita in the first quartile of the industry cost curve.

Adapting to the challenges caused by COVID-19, Atlantic Nickel has been preparing and conducting virtual site visits to foster continued interaction and collaboration with external partners and counterparties. Parties interested in learning more can reach out to either Atlantic Nickel at [e-mail] or Appian at [e-mail].

Marketing update

Following the announcement of our first shipment of concentrate in January 2020, the Company has successfully completed its second and third shipments ahead of the mine's original plan of commencing operations by the end of Q1 2020. Market demand for nickel sulphide concentrate has remained strong throughout the COVID-19 pandemic.

Resource update

A phased, comprehensive drilling programme that started in Q2 2019 has confirmed the exceptional upside potential of the mineral endowment, increasing Mineral Resources materially since the acquisition by Appian in 2018.

The updated Underground Mineral Resource estimate is shown in the table below, reflecting 167.8 Mt of total resources (Indicated + Inferred) grading 0.59% NiS, 0.19% Cu and 0.01% CoS. This resource is the continuation of the orebody and is defined immediately below the open pit resource of 59.1 Mt grading 0.31% NiS, 0.11% Cu and 0.01% CoS and has the potential to extend Santa Rita's mine life to over 26 years. The Company is conducting additional drilling in 2020 intended to further grow and define the underground resource.

Class	kt	NiS (%)	Cu (%)	CoS (%)	Pd (ppm)	Pt (ppm)	Au (ppm)
Indicated	54,590	0.61	0.20	0.01	0.04	0.11	0.07
Inferred	113,192	0.58	0.18	0.01	0.05	0.10	0.07

• The Qualified Persons for the Mineral Resource Estimate are Timothy O. Kuhl, RM SME (MTS, formerly with Wood), Douglas Reid, P.Eng. (Wood) and Dr Ted Eggleston, RM SME (MTS).
• Mineral Resources are reported within conceptual stope outlines constructed using Datamine MRO (Mineable Reserves Optimizer, minimum mineable unit 45 x 45 x 25 m, US$30/t NSR cut-off).
• Mineral Resources are inclusive of Mineral Reserves.
• Underground Mineral Resources are exclusive of open pit Mineral Resources.
• Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
• Metal prices used for the Mineral Resource Estimate are: US$6.50/lb nickel, US$3.00/lb copper and US$20.00/lb cobalt.
• Metal recoveries are: NiS=83%; Cu=70%; Co=29%.
• Net Smelter Return (NSR) cut-off of US$30.00/t was used for the Mineral Resource Estimate.
• Totals may not sum due to rounding.

Atlantic Nickel expects to complete a preliminary economic assessment for the underground expansion in Q3 2020 and looks forward to providing further details in due course.

Paulo Castellari, CEO Atlantic Nickel & Appian Brazil commented:

"COVID-19 is having a far-reaching impact on every country and industry sector. The health and safety of our people and local communities remains our foremost priority, and the decisive action we have taken during this difficult time has ensured our wellbeing while allowing continuity of operations.

"Following Santa Rita's re-start, I am delighted by the continued strong operational performance of the asset, which is testament to the ability of the Atlantic Nickel team, backed by Appian's expertise and business model. Having returned the Mine to production ahead of plan, we continue to optimize costs and identify opportunities for operational improvements and further expansion. A sizable underground mineral resource has been defined and we look forward to announcing a preliminary economic assessment for its development later this year. I am very excited about our ability to consistently meet and exceed stakeholders' expectations, which include our customers, suppliers, employees, communities and shareholders. Atlantic Nickel is now positioned as a low-cost, long-life operation with significant the potential for further expansion, and I look forward to providing updates on the PEA in due course."

About Appian

Appian Capital Advisory LLP is the investment advisor to long-term value focused private equity funds that invest solely in mining and mining related companies.

Appian is a leading investment advisor in the metals and mining industry, with global experience across South America, North America, Australia and Africa and a successful track record of supporting companies and the advancement of their projects into production. Appian acquired Atlantic Nickel, the 100% owner of Santa Rita, in 2018.

About Atlantic Nickel

Atlantic Nickel is the owner and operator of Santa Rita, an open-pit nickel-copper-cobalt sulphide operation located in Bahia, Brazil. Santa Rita is a fully permitted, past-producing nickel mine currently undergoing an operational restart. The Mine benefits from US$1bn of prior investment and has an estimated production capacity of 6.5 Mtpa. One of the largest open pit nickel sulphide mines in the world, Santa Rita is a high-quality asset operating with a first quartile cost position. It is one of a few remaining nickel sulphide mines globally that can offer additional supply towards the production of Class I nickel products and so has exposure to the high-growth potential of the electric vehicle industry.

For further information:

Finsbury [phone]
Charles O'Brien, Ruban Yogarajah, Richard Crowley

Appian Capital Advisory [phone]
[e-mail]
Michael Scherb, Adam Fisher