FPX Nickel Corp. provided an update on value engineering ("Value Engineering") studies focused on the mineral processing and infrastructure facilities for the Baptiste Nickel Project ("Baptiste" or "the Project") in central British Columbia. The mineral processing and infrastructure Value Engineering studies have achieved significant value creation through facility optimization, flowsheet refinement, enhanced operability, and improvements to the project build strategy and execution basis.

Highlights: Primary crushing: Changing from a gyratory-type primary crusher to mineral sizers has reduced earthwork and structural quantities, improved Phase 1 operability, and eliminated the need for a second primary crushing circuit in Phase 2; Concentrator expansion: A new integrated approach to the Phase 2 expansion has reduced overall quantities, improved Phase 2 operability, and reduced the footprint of process and infrastructure facilities; Project phasing: The phased approach and throughput rates in the preliminary feasibility study ("PFS") have been validated, while acceleration of the Phase 2 expansion improves Baptiste's metal production profile; Execution schedule has been confirmed, further validating the PFS's estimated three-year construction duration. The Baptiste 2023 preliminary feasibility study ("PFS) demonstrates the potential to develop a high-margin and low-carbon nickel mine producing an average of 59,100 tonnes per year of nickel over a 29-year mine life. Due to awaruite's properties, Baptiste has the unparalleled flexibility to produce either a high-grade concentrate (60% nickel) for direct feed into the stainless steel industry or for further refining into battery-grade nickel, cobalt, and copper products for the electric vehicle battery supply chain.

While the PFS presents robust economics, including a Base Case after-tax NPV8% of USD 2.01 Billion and after-tax IRR of 18.6% at USD 8.75/lb Ni, FPX strives to add further value to Baptiste, focusing on a holistic blend of economics, constructability, operability, risk and ESG considerations. The key Value Engineering studies pursued by FPX in 2024 are: Mineral processing and infrastructure; Mine planning and engineering (to be completed in the third quarter of 2024); Refinery planning (to be completed in the Third quarter of 2024). The PFS considered a gyratory-type primary crusher.

In re-evaluating the Project's geotechnical and communication datasets, the Company has identified an opportunity to use mineral sizers for primary crushing. Taking advantage of the modest compressive strength and fractured nature of the Baptiste ore, mineral sizers have added significant value through reduced earthwork and structural quantities, increased operating availability, and the complete elimination of the second primary crushing line for the planned mine expansion from an initial Phase 1 processing throughput of 108,000 tonnes per day to 162,000 tpd in Year 10 ("Phase 2"). The PFS considered the construction of a standalone processing facility for the Phase 2 expansion from 108,000 tpd to 162,000 tpd.

A new approach to expansion is based on an integrated concentrator approach which entails an expansion of the Phase 1 processing facility rather than the construction of a new standalone facility for Phase 2. This integrated approach results in a reduced process and infrastructure footprint, improved Phase 2 operability, and reduced Phase 2 work force requirements. A Value Engineering study re-evaluated the phased approach to processing throughput and compared it with a series of single-build scenarios ranging from 80,000 to 163,000 tpd. Following this evaluation, the PFS's phased approach has been validated; however, the Phase 2 expansion has been accelerated to Year 6 from Year 10.

This acceleration in metal production is expected to generate improved economics versus the PFS, with the Phase 2 expansion funded from operating free cash flow following the 3.7 year after-tax payback demonstrated in the PFS. Both Fluor and Wood were assigned further scope to review the PFS's execution basis, including the permanent facility layout, construction sequence, contracting approach, and overall execution schedule. Note that Fluor and Wood jointly executed the detailed engineering and construction management of the nearby Mt.

Milligan Mine, which was commissioned in 2013 and is located 80 km east of Baptiste. Mt. Milligan is of comparable size and complexity to Baptiste, which uniquely positions Fluor and Wood to provide relevant context to the Baptiste project execution plan.

Through this additional execution planning effort, numerous scheduling improvements to the PFS were identified, thereby improving the constructability, operability, and maintainability of Baptiste. In addition, increased focus on allowances for temporary construction facilities has improved execution scope assurance ahead of the environmental assessment and permitting processes. Fundamentally, these robust execution planning efforts further de-risk the Baptiste execution schedule, including the PFS assumption of a three-year construction period.