Base metals project developer Royal Nickel Corporation continued yo make steady development progress on its Dumont nickel project, in Quebec, having chalked up several critical milestones over the past several months.

On August 4, RNC announced it had executed a memorandum of understanding with Duro Felguera and Ausenco Canada, under which DF-Ausenco would perform the work required to complete an engineering, procurement and construction lump sum turnkey proposal for the Dumont project.

RNC had agreed to award to the DF-Ausenco alliance the EPC and services agreement on condition that certain technical and commercial parameters were met, including delivering a turnkey proposal no later than December 15. The EPC proposal must not exceed C$911-million for the defined scope of work, and would contain a project performance guarantee related to the cost and schedule for completion.

DF-Ausenco would also be required to make reasonable commercial efforts to reduce this not-to-exceed value, if possible.

Late in July, RNC announced that it had received a positive environmental assessment decision for the Dumont project from the federal environment minister. The minister had determined that the project was not likely to cause significant adverse environmental efforts when certain mitigation measures were implemented, as outlined in the comprehensive study report and had therefore refered the project back to the responsible authorities, Fisheries and Oceans Canada and Natural Resources Canada, to issue permits.

The Dumont project had in July received the main environmental permit, the certificate of authorization, from the Quebec Ministry of Sustainable Development, Environment and the Fight Against Climate Change. This suthorisation was the most significant permit for mining projects in Quebec and positioned Dumont to proceed to construction after it had secured financing.

Meanwhile, on June 29, RNC announced a royalty and private placement transaction with Orion Mine Finance, which closed on July 8. RNC received gross proceeds of C$12.6-million from Orion in exchange for a 0.75% net smelter return royalty in the Dumont project and ten-million RNC common shares, issued at $0.395 per share. RNC had the right to repurchase 50% of the royalty for cash payment of $15-million on the third, fourth or fifth anniversaries of the closing.

RNC president and CEO Mark Selby said the financing would allow the company to advance its efforts on a number of fronts, including generating bulk samples of roasted concentrate to comfirm concentrate roasting as a lower-cost processing alternative for the Dumont project.

Earlier in June, RNC appointed Swedbank Norway as adviser for a senior bond financing of about $600-million, with a five-year maturity, to develop its Dumont nickel project.

“We continue to work towards completing the capital raising phase of the project in a timely manner to allow us to begain construction activities by early 2016, subject to nickel market conditions. Dumont is well positioned as one of the very few shovel ready nickel projects in a tightening market,” Selby said.

• [Editor:Juan]