EX-96.1 10 fs42021a2ex96-1_sustainable.htm TECHNICAL REPORT SUMMARY - INITIAL ASSESSMENT OF THE NORI PROPERTY, CLARION-CLIPPERTON ZONE, FOR DEEP GREEN METALS INC., EFFECTIVE AS OF MARCH 17, 2021, BY AMC CONSULTANTS PTY LTD AND OTHER QUALIFIED PERSONS

Exhibit 96.1

 

AMC Consultants Pty Ltd

ABN 58 008 129 164

 

Level 21, 179 Turbot Street

Brisbane Qld 4000

Australia

 

 

T +61 7 3230 9000
E brisbane@amcconsultants.com
W amcconsultants.com

 

 

 

 

 

 

Technical Report Summary

 

Initial Assessment of the NORI Property, Clarion-Clipperton Zone

Deep Green Metals Inc.

 

In accordance with the requirements of SEC Regulation S-K (subpart 1300)

 

AMC Project 321012

17 March 2021

 

Unearth a smarter way

 

 

Initial Assessment of the NORI Property, Clarion-Clipperton Zone
Deep Green Metals Inc.320041
  

 

 

1Summary

 

1.1Introduction

 

A very large resource of polymetallic nodules, containing nickel, manganese, cobalt, and copper is located on the seafloor in the Clarion-Clipperton Zone (CCZ) of the north-east Pacific Ocean. DeepGreen Metals Inc. (DeepGreen) has identified the potential to recover metals from polymetallic nodules to support increasing demand from battery and electric vehicle production. Unlike most mining processes, the proposed mineral processing flowsheet seeks to make by-products rather than substantial waste streams and is not expected to require tailings ponds or other large-scale waste storage on-site.

 

Nauru Ocean Resources Inc (NORI), a wholly-owned subsidiary of DeepGreen, holds exploration rights to four areas (NORI Area A, B, C, and D, the Property) in the CCZ that were granted by the International Seabed Authority (ISA) in 2011. NORI is sponsored to carry out its mineral exploration activities in the Property by the Republic of Nauru, pursuant to a certificate of sponsorship signed by the Government of Nauru on 11 April 2011. DeepGreen commissioned AMC Consultants Pty Ltd (AMC) to undertake an Initial Assessment (IA) of the Mineral Resource contained in NORI Area D (the Project) and compile a Technical Report Summary compliant with SEC Regulation S-K (subpart 1300).

 

Four consortia of off-shore development companies demonstrated the technical feasibility of collecting, lifting, and converting nodules into metals in the 1970s, but development of the industry was frustrated by the absence of regulation and a governing body. In 1994 the United Nations established the ISA pursuant to the United Nations Convention on the Law of the Sea (UNCLOS). The ISA governs the development of seabed resources in the territories beyond the exclusive economic zones governed by coastal states. This international territory is known as the Area. The ISA is in the process of finalising the regulations for development of seabed resources from the CCZ and other resources in the Area. The ISA had declared a target of 2020 to have the regulations approved but the COVID-19 pandemic disrupted the ISA program.

 

A phased development is outlined for NORI Area D. Offshore collection systems, comprising collector vehicles on the seafloor, a riser and lift system (RALS), and a production support vessel would collect polymetallic nodules. The nodules would be transferred to transport vessels and shipped to on-shore processing facilities where established processing technology would be used to produce copper cathode, nickel sulphate and cobalt sulphate suitable for Li Ion battery cathode feedstock, nickel-copper-cobalt alloy, manganese silicate, and ammonium sulphate.

 

A drillship, the Hidden Gem, will be converted to undertake a pre-production Collector Test in which a collector vehicle, RALS and other systems will be tested. The first phase of commercial production (Project Zero) would then commence after the upgrading of the Hidden Gem to produce a production support vessel that can produce up to 1.3 Mtpa (wet) of nodules. The nodules would be processed through existing third-party facilities on a tolling basis. In Project One, production will be expanded with an additional converted drillship (Drill Ship 2), a second upgrade to the Hidden Gem, and construction of a bespoke production support vessel (Collector Ship 1). Ultimately, the fleet of three production support vessels, each with a dedicated seafloor collection system, would produce an average of ~12.5 Mtpa of wet nodules during steady state production. In Project One, the majority of nodules would be processed at a new facility to be constructed by NORI, with the balance of production going to toll treatment.

 

This phased approach to development allows for management of risk and for progressive improvement of engineering and operating systems. It will also enable NORI to adopt an adaptive management approach to environmental management.

 

The IA indicates a positive economic outcome. Undiscounted post-tax net cash flow of US$30.6 billion is expected. An internal rate of return of 27% has been modelled. Discounted cash flow analysis of unleveraged real cash flows, discounting at 9% per annum, indicates a current project net present value of US$6.8 billion. The analysis indicates that the Project will generate approximately US$7.2 billion in undiscounted royalties payable to the ISA and Nauru and US$9.1 billion in on-shore corporate tax payable to the host nation of the process plant.

 

An IA is a conceptual study of the potential viability of Mineral Resources. This IA indicates that development of the NORI Area D Mineral Resource is potentially technically and economically viable, however, due to the preliminary nature of project planning and design, and the untested nature of the specific seafloor production systems at a commercial scale, economic viability has not yet been demonstrated.

  

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1.2Location

 

The NORI Property is located within the CCZ of the northeast Pacific Ocean (Figure 3.1). The CCZ is located in international waters between Hawaii and Mexico. The western end of the CCZ is approximately 1,000 km south of the Hawaiian island group. From here, the CCZ extends over 4,500 km east-northeast, in an approximately 750 km wide trend, with the eastern limits approximately 2,000 km west of southern Mexico. The region is well-located to ship nodules to the American continent or across the Pacific to Asian markets.

 

The NORI Property comprises four separate blocks (A, B, C and D) in the CCZ with a combined area of 74,830 km2. These areas were previously explored by three Pioneer Investors. The NORI Area D Project covers 25,160 km2 and is the easternmost of the four NORI exploration areas. Its centre point is at latitude 10° 29’ N and longitude 116° 57’ W, approximately 850 km due west of the nearest land—the uninhabited Clipperton Island.

 

1.3The ISA and the NORI tenements

 

The international seabed area (otherwise known as the Area) is defined as the seabed and subsoil beyond the limits of national jurisdiction (UNCLOS Article 1). The principal policy documents governing the Area include:

 

The United Nations Convention on the Law of the Sea, of 10 December 1982 (The Convention).
The 1994 Agreement relating to the Implementation of Part XI of the United Nations Convention on the Law of the Sea of 10 December 1982 (the 1994 implementation Agreement).

 

Part XI of the Convention and the 1994 Implementation Agreement deals with mineral exploration and exploitation in the Area, providing a framework for entities to obtain legal title to areas of the seafloor from the ISA for the purpose of exploration and eventually exploitation of resources.

 

The Convention entered into force on 16 November 1994. As of 20 August 2020, the Convention had been signed by 167 states (countries) and the European Union. The United States of America is currently not a party to the Convention.

 

The ISA is an autonomous international organisation established under the Convention and the 1994 Implementation Agreement to organise and control activities in the Area, particularly with a view to administering and regulating the development of the resources of the Area in accordance with the legal regime established in the Convention and the 1994 Implementation Agreement.

 

All rules, regulations, and procedures issued by the ISA to regulate prospecting, exploration, and exploitation of marine minerals in the Area are issued within a general legal framework established by the Convention and the 1994 Implementation Agreement.

 

To date, the ISA has issued regulations on prospecting and exploration for polymetallic nodules in the Area. In March 2019, the Council of the ISA released the advance and unedited text (English only) of the Draft Regulations on Exploitation of Mineral Resources in the Area (ISBA/25/C/WP.1) (ISA, 2019).

 

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In July 2011, NORI was granted a polymetallic nodule exploration contract by the ISA. The contract was granted pursuant to the Regulations on Prospecting and Exploration for Polymetallic Nodules in the Area (adopted 13 July 2000) and formalises an exploration area, a term of 15 years for the contract, and a program of activities for the first five-year period (NORI Exploration Contract). The contract also formalises the rights of NORI around tenure. Pursuant to the Regulations, NORI has the priority right to apply for an exploitation contract to exploit polymetallic nodules in the same area (Regulation 24(2)).

 

The NORI Exploration Contract may be extended for periods of five years at a time beyond the initial 15-year period, provided NORI has made efforts in good faith to comply with the requirements of the plan of work.

 

In 2020, NORI acquired the polymetallic nodule exploration contract awarded by the ISA to Tonga Off-shore Mining Limited (TOML). TOML Area F is immediately west of NORI Area D.

 

1.4Geology and Mineral Resources

 

Seafloor polymetallic nodules occur in all oceans but the CCZ hosts a relatively high abundance of nodules. The CCZ seafloor forms part of the Abyssal Plains, which are the largest physiographic province on Earth.

 

The average depth of the seafloor in the Project Area is 3,800 to 4,200 m. Overall, the seafloor slopes at approximately 0.57˚ (1 m per km) but the Abyssal Plains are traversed by ridges, with amplitude of 50 to 300 m (maximum 1,000 m) and wavelength of 1 to 10 km. The Abyssal Plains are punctuated by extinct volcanoes rising 500 to 2,000 m above the seafloor.

 

Seafloor polymetallic nodules rest on the seafloor at the seawater - sediment interface. They are composed of nuclei and concentric layers of manganese and iron hydroxides and are formed by precipitation of metals from the surrounding seawater and sediment pore waters. Nickel, cobalt and copper are also precipitated and occur within the structure of the manganese and iron minerals.

 

Nodules are abundant in abyssal areas with oxygenated bottom waters and low sedimentation rates (less than 10 cm per thousand years). Nodules generally range from about 1 to 12 cm in their longest dimension. Nodules of 1 to 5 cm are typically the most common in NORI Area D, where they have been classified as Type 1 nodules.

 

The specific conditions of the CCZ (water depth, latitude, and seafloor sediment type) are considered to be the key controls for the formation of polymetallic nodules.

 

Information on the mineralisation within NORI Area D comprises a combination of sampling undertaken by NORI as well as free-fall grab sampler (FFG) and box core sampler (BC) data supplied by the ISA at the time of the NORI application and also supplied by the ISA to NORI in 2012. Additional regional data, assembled by the ISA as part of its Geological Model Project during 2008 to 2010 (ISA 2010), are available. The data provide significant coverage over NORI Area D and indicate a high abundance of nodules in this region, as has been confirmed by NORI’s exploration.

 

NORI completed off-shore exploration campaigns in 2012, 2013, 2018, 2019 and 2020. During these campaigns a variety of data was collected including:

 

Bathymetric mapping of the whole of NORI Area D using a hull-mounted Kongsberg Simrad EM120 12 kHz, full-ocean depth multibeam echo-sounding system (MBES). This system also provided backscatter data with which seafloor characteristics could be interpreted.
Detailed seafloor survey work with an autonomous underwater vehicle (AUV), utilising an MBES, Side Scan Sonar (SSS), Sub-Bottom Profiler (SBP), and camera payload.
A total of 252 box core samples collected using a 0.75 m2 box corer, mainly on a 10 km by 10 km square grid.

 

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The nodules in the box cores were collected, and their characteristics measured and recorded in detail. Samples of nodules were collected in duplicate and assayed at two reputable, well-qualified laboratories: ALS and Bureau Veritas. Certified reference material, and blank samples were inserted to provide additional levels of quality control. No significant issues were identified with the assay results.

 

The backscatter data and the sidescan sonar and seafloor photography indicate strong continuity of nodule abundance across NORI Area D. There is a clear relationship between nodule long axis length and nodule weight and therefore it is possible to estimate nodule abundance from photographs. Several estimation techniques were tested, and methodologies were developed that are suitable for closely packed (Type 1) and less closely packed (Type 2 and 3) nodules.

 

Mineral Resources were estimated using a two-dimensional block model. Estimates of nodule abundance and nickel, manganese, cobalt, and copper grades were performed using kriging. A variety of methods was used to validate the estimates, including conditional simulation. The estimates of nodule abundance were used to calculate the tonnage of the Mineral Resources.

 

The bathymetric mapping enabled the interpretation of parts of seafloor that are possibly too steep for recovery of nodules using the systems considered in this IA. Seafloor areas with slopes steeper than 6° were excised from the 2020 Mineral Resource estimate.

 

The Mineral Resource was classified on the basis of the quality and uncertainty of the sample data and sample spacing, in accordance with SEC Regulation S-K (subpart 1300).

 

The Measured Mineral Resource was assigned to the area within NORI Area D where box-core sampling was conducted on a nominal 7 km by 7 km spacing and infilled with estimates of nodule abundance from seafloor photography to a spacing of 3.5 km by 3.5 km.

 

The Indicated Mineral Resource was assigned to the area within NORI Area D where box-core sampling was conducted on a nominal spacing of 7 km by 7 km or 10 km by 10 km but without additional photo-estimates of nodule abundance.

 

The Inferred Mineral Resource was assigned to the areas of abyssal plain in the southeast corner of NORI Area D that are largely unsampled. The volcanic high in the southeast corner was excluded from the mineral resource estimate due to the high level of uncertainty about nodule abundance and grades in this domain.

 

The new Mineral Resource estimate for NORI Area D, with an effective date of 31 December 2020, is reported in Table 1.1 at a 4 kg/m2 abundance cut-off. This cut-off is derived from the estimates of costs and revenues presented in this Initial Assessment.

 

Whilst the IA focusses on the development of mining operations in NORI Area D, NORI holds another three areas in the CCZ under the same title. These Areas (NORI Area A, B and C) are estimated to contain Inferred Mineral Resources of 510 Mt (wet) at 1.28% Ni, 0.21% Co, 1.04% Cu, 28.3% Mn, at an average abundance of 11 kg (wet)/m2 at a 4 kg/m2 abundance cut-off (Golder, 2013) (effective date of 31 December 2020). The polymetallic nodule mineralisation in Areas A, B and C has similar characteristics to NORI Area D and it is reasonable to assume that the technology proposed in the IA would be suitable for development of these additional areas.

 

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Table 1.1 NORI 2020 Mineral Resource estimate, in situ, for NORI Area D at 4 kg/m2 abundance cut-off

 

NORI Area Category Tonnes
(Mt (wet))
Abundance
(wet kg/m2)
Nickel
(%)
Copper
(%)
Cobalt
(%)
Manganese
(%)
Silicon
(%)
D Measured 4 18.6 1.42 1.16 0.13 32.2 5.13
D Indicated 341 17.1 1.40 1.14 0.14 31.2 5.46
D Measured + Indicated 345 17.1 1.40 1.14 0.14 31.2 5.46
D Inferred 11 15.6 1.38 1.14 0.12 31.0 5.50

 

Note: Tonnes are quoted on a wet basis and grades are quoted on a dry basis, which is common practice for bulk commodities. Moisture content was estimated to be 24% w/w. These estimates are presented on an undiluted basis without adjustment for resource recovery.

 

1.5Development plan

 

NORI proposes to implement the project in multiple phases that will allow the seafloor mining systems to be tested and then nodule production to be gradually ramped up. The phased approach will facilitate de-risking of the project for relatively low initial capital investment. Additionally, this phased development will allow for an adaptive approach to environmental management providing learning at small-scale which would be applied as the development increases scale.

 

The proposed seafloor production development phases are as follows:

 

The Collector Test is designed to perform proof of concept for the methods of collecting and lifting the nodules while acquiring sufficient data to design a commercial system. Nodules collected during the test would be stored on the Hidden Gem and brought to shore for use in large scale process pilot testing. The Collector Test would use a converted sixth generation drillship, the Hidden Gem. The test would not demonstrate the transhipment of nodules to a shore-based facility.
Project Zero would be an extension of the Collector Test using an upgrade of the Hidden Gem to produce a sufficient and continuous quantity of nodules to support a relatively small commercial operation of about 1.3 Mtpa (wet) nodules delivered to a shore-based facility. This operation would demonstrate a more continuous mining operation at a larger scale than the Collector test and would demonstrate the transhipment of nodules to a processing facility. It would also allow for the implementation and testing of adaptive management systems to ensure environmental compliance.
Project One would increase production in a further three steps: 1) introduction of a second converted drillship (Drill Ship 2) with a capacity of up to 3.6 Mtpa (wet), 2) a further upgrade of the Hidden Gem to up to 3.6 Mtpa (wet) and 3) construction of a new purpose-built production support vessel (Collector Ship 1) with capacity of up to 8.2 Mtpa (wet). Project One would benefit from lessons learned on the Collector Test and Project Zero.

 

The processing of the polymetallic nodules would also be ramped up in phases:

 

In Project Zero, NORI proposes to toll treat polymetallic nodules at existing RKEF smelters, utilizing excess industry capacity. NORI advises there is significant interest from many parties in China to utilise RKEF plants which may become stranded as a result of the Indonesian government nickel laterite ore export ban restricting supply of the nickel laterite feedstock that they currently utilise. These RKEF plants were originally built to convert nickel laterite to nickel pig iron and could be converted to smelt polymetallic nodules.
In Project One, a purpose-built process plant would be constructed, including pyrometallurgical and hydrometallurgical circuits. Nodule production would be increased in phases by treatment in this new plant.

 

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1.6Mining concept

 

The main items of off-shore infrastructure are the nodule collector vehicles, the riser, and three production support vessels (PSV): Hidden Gem, Drill Ship 2 and Collector Ship 1. Collector Ship 1 will be supported by a collector support vessel.

 

The nodules will be collected from the seafloor by self-propelled, tracked, collector vehicles. No rock cutting, digging, drill-and-blast, or other breakage will be required at the point of collection. The collectors will be remotely controlled and supplied with electric power via umbilical cables from the PSV. The collectors will traverse the seabed at a speed of approximately 0.5 m/s. Suction dredge heads on each collector will recover a dilute slurry of nodules, sediment, and water from the seafloor. Each collector will yield about 254 t/hr (dry) nodules to the process plant. A hopper on each vehicle will separate sediment and excess water, which will pass out of the hopper overflow, from the nodules, which will be pumped as a higher concentration slurry via flexible hoses to a riser.

 

The riser is a steel pipe through which nodules will be transferred to the surface by means of an airlift. The riser will consist of three main sections. The lower section will carry the two-phase slurry of nodules and water from the collectors to the airlift injection point. The mid-section will carry a three-phase mixture of slurry and air. This section will also include two auxiliary pipes: one to carry the compressed air for the airlift system, and one to return water from dewatering of the slurry to its subsea discharge point. The upper section of riser will have a larger diameter to account for the expansion of air in the airlift.

 

The airlift works by lowering the average density of the slurry inside the riser to a level lower than seawater. The difference between the hydrostatic pressure of the seawater at depth and the pressure caused by the weight of the low-density three-phase slurry column inside the riser forces the slurry column to rise. The energy to achieve the lift will be supplied by compressors housed on the PSV, which will be capable of generating very high air pressures—up to 15 MPa.

 

The PSVs will each support a RALS and its handling equipment, and will house the airlift compressors, collector vehicle control stations, and material handling equipment. All power for off-shore equipment, including the nodule collecting vehicles, will be generated on the PSVs. The PSVs will be equipped with controllable thrusters and will be capable of dynamic positioning (DP), which will allow the vessels and risers to track the collectors. The Collector Ship 1 PSV will be similar in size to an Aframax or New Panamax class of tanker, displacing approximately 103,000 t, and housing a crew of around 120 personnel. Nodules will be discharged from the RALS to the PSVs, where they will be dewatered and temporarily stored or transferred directly to a transport vessel.

 

A separate collector support vessel will remain at sea to support Collector Ship 1. It will be configured as a subsea support platform, as commonly used in oil industry, with a displacement of around 17,250 t. The function of the collector support vessel will be to facilitate collector maintenance and repair.

 

This IA assumes transportation of nodules will be by chartered vessels, with deadweight capacities of 35,000 to 100,000 tonnes. The vessels will require dynamic positioning capability to enable them to be loaded at sea alongside the PSV. Hydraulic offloading of the nodules from the PSV to the transport ships is assumed in this IA, but future studies will confirm the offloading mechanism.

 

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1.7Mineral processing and metallurgical testing

 

A combined pyro-metallurgical and hydro-metallurgical flowsheet was evaluated for these IA. Similar flowsheets were investigated at various times over the last several decades. NORI has undertaken bench-scale test-work and is in the process of completing pilot-scale testing of the proposed flowsheet. This work has confirmed or improved the flowsheet that was initially developed from extensive information available in the literature.

 

Pyrometallurgical processing of nodules has been extensively studied from the early 1970s until the present day and appears to be the preferred process for most of the other currently active nodule processing research groups. Many groups including: Kennecott; Inco; Cuban / Bulgarian; German; Indian; Japanese; and Korean have studied pyrometallurgical processing of nodules at a laboratory scale. The nodule samples for these tests were collected from their respective license areas in the CCZ. The nodules used in each of the studies have similar compositions but there are subtle variations that can have significant implications for pyrometallurgical processing. Of particular importance is the ratio of MnO:SiO2 in the nodules as this impacts the choice of process operating parameters for the electric furnace smelting operation.

 

For Project Zero, NORI proposes to toll treat polymetallic nodules at existing RKEF smelters. During Project One, NORI proposes the progressive construction and expansion of a new pyrometallurgical and hydrometallurgical process plant for the recovery of nickel, manganese, cobalt, and copper from polymetallic nodules. This will allow for the proportion of toll treatment to be reduced.

 

Four rotary kiln and electric furnaces lines (RKEF) and two hydrometallurgical refineries would be required to meet the production demand for the life of the project.

 

The pyrometallurgical front end of the plant will use RKEF lines that calcine and smelt the nodules to form an alloy. The alloy would then be sulphidised to form a matte and then partially converted in a Peirce-Smith converter operation to remove iron. The matte from the sulphidation step would then be sent to the hydrometallurgical refinery. The pyrometallurgical process is similar to that successfully used to process some nickel laterite ores.

 

The hydrometallurgical refinery concept is based on a sulphuric acid leach flowsheet. A two-stage leach would be used to produce copper cathode and a pregnant leach solution rich in nickel and cobalt, while low in copper. Further processing of the pregnant leach solution is based on mixed-sulphide precipitate processing flowsheets employing solvent extraction. The final production of battery-grade nickel and cobalt sulphates would use crystallisation.

 

The pyrometallurgical process generates a manganese silicate stream that can be sold to the manganese industry and small converter slag stream that can be sold for industrial applications. No value has been ascribed to converter slag in this IA. The hydrometallurgical plant produces an ammonium sulphate by-product for sale to the fertiliser industry. Thus, together with the ability to recycle other hydrometallurgical side-streams to the pyrometallurgical process, the flowsheet has neither tailings ponds nor permanent slag repositories and does not generate substantial waste streams.

 

The average targeted processing rate for the new processing plant at full capacity is 6.4 Mtpa of nodules (dry basis). The location and host country of the processing operation has not yet been determined. Engineering design has not yet been undertaken.

 

Expected metallurgical recoveries are summarized in Table 1.2.

 

Table 1.2 Metallurgical recoveries

 

Process Step Nickel
Recovery (%)
Cobalt
Recovery (%)
Copper
Recovery (%)
Final matte 94.6% 77.4% 86.5%
Hydrometallurgical products before recycle 98.9% 98.0% 96.2%
Recycled residue 94.6% 77.4% 86.5%
Overall recovery 94.6% 77.2% 86.2%

 

In addition to the above base metals, 98.9% of the manganese contained in the feed will be recovered to the manganese silicate product, containing 52.6% MnO. Approximately 7.3 Mt of manganese silicate will be produced per annum (from steady state operation from 2030 onwards).

 

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1.8Market studies

 

CRU International Limited (CRU) was commissioned by NORI to provide market overviews for the four main products from the NORI Area D Project: nickel sulphate (NiSO4), cobalt sulphate (CoSO4), copper cathode, and a manganese product (CRU, 2020).

 

CRU expects NiSO4 and CoSO4 markets to undergo extreme growth from a relatively small current level of 181 kt nickel in sulphate and 35 kt of cobalt in sulphate in 2019, with markets to increase to 138 and 178 times their 2018 sizes respectively to 1.6 Mt nickel in sulphate and 500 kt cobalt in sulphate by 2035, with much of this growth occurring post-2025. Electric vehicle production is the driver of this forecast growth.

 

Copper and manganese markets are forecast to grow by 25% and 20% of their 2020 sizes by 2035 respectively. Copper and manganese demand will benefit from electric vehicle penetration, however the primary driver of growth for manganese ore will be steelmaking, and a variety of end use applications generally related to economic health for copper.

 

CRU expects copper and NiSO4 prices to rise in real terms by 2035, while manganese and CoSO4 prices are forecast to remain flat, due to current prices being at or near a high point in the cycle, recent fall in prices, and expected modest growth in the global steel industry after the COVID 19 epidemic. The long-term cost of production is expected to rise for both copper and NiSO4, helping to support prices.

 

1.9Environmental studies, permitting, community, or social impact

 

Historically, a significant amount of technical work has been undertaken within the CCZ by the Contractors and a significant body of information has been acquired during the past 40 years on the likely environmental impacts of collecting nodules from the sea floor.

 

NORI’s off-shore exploration campaigns have included sampling to support environmental studies, collection of high-resolution imagery and environmental baseline studies. A number of future campaigns are planned to collect data on ocean currents and water quality to assist plume modelling, environmental baseline studies, box core and multicorer sampling focussed on benthic ecology and sediment characteristics.

 

NORI has commenced the ESIA process in support of an application for an exploitation license for the commercial mining of deep-sea polymetallic nodules. A comprehensive program of metocean and biological data acquisition is in progress to characterize the baseline conditions at a designated Collector Test site and control sites in the mining lease area.

 

NORI intends to manage the Project under the governance of an Environmental Management System (EMS), which is to be developed in accordance with the international EMS standard, ISO 14001:2004. The EMS will provide the overall framework for the environmental management and monitoring plans that will be required.

 

An Environmental Monitoring Plan (EMP) will be required. The plan will specify the objectives and purpose of all monitoring requirements, the components to be monitored, frequency of monitoring, methods of monitoring, analysis required in each monitoring component, monitoring data management and reporting. The plan will be submitted to the ISA as part of the exploitation contract application. This plan will involve an ecosystem approach incorporating an adaptive management system.

 

The social impacts of the off-shore operation are expected to be positive. The CCZ is uninhabited by people, and there are no landowners associated with the NORI Area D nodule project. No significant commercial fishing is carried out in the area. The Project will provide a source of revenue to the sponsor country, Nauru, and to the ISA.

 

The on-shore environmental and social impacts have not yet been assessed because the process plant has not been designed in detail, and the location and host country (and hence regulatory regime) not confirmed. The planned metallurgical process will not generate solid waste products, and the deleterious elements (for example, cadmium and arsenic) content of the nodules is very low, indicating that with careful management the environmental impacts of the processing operation could be very low.

 

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1.10 Conceptual production schedule

 

AMC cautions that the estimates in the production case and economic analysis are preliminary and further studies and engineering design are required before technical feasibility and economic viability can be demonstrated.

 

The production schedule is shown in Table 1.3.

 

Table 1.3 Production summary

 

Section Units Total
Nodule tonnage Mt (wet) 254
Abundance kg/m2 16.9
Ni Grade % 1.39
Cu Grade % 1.14
Co Grade % 0.14
Mn Grade % 31.0
Nickel recovered to Ni Sulphate kt 2,593
Copper cathode produced kt 1,936
Cobalt recovered to Co sulphate kt 206
Manganese silica produced kt 60,398
Ammonium sulphate produced kt 7,677
Alloy product produced kt 377
Matte product produced kt 688

 

1.11 Capital cost

 

The capital cost estimates for the Project are summarised in Table 1.4. Pre-project items include data gathering and studies that will occur prior to construction. Off-shore project costs include the procurement and integration of the PSVs, the collector support vessel, the fabrication of the collectors, and the RALS. On-shore project costs consist principally of the construction of the minerals processing pyrometallurgical plant and hydrometallurgical refinery. Sustaining costs are for both on-shore and off-shore assets, and closure costs are principally for rehabilitation of the on-shore minerals processing site.

 

Table 1.4 Capital cost estimates

 

Section Cost estimate (US$ million)
Pre-project costs 237
Project costs  
   Off-shore project costs  
      Project Zero 204
      Project One 2,244
      Total 2,448
   On-shore project costs  
      Project One 4,786
      Total 4,786
   Total project costs 7,234
Sustaining capital costs (on-shore and off-shore) 2,637
Closure costs 500
Total 10,607

 

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1.12 Operating cost

 

Operating costs have been estimated at US$1.8 billion per annum during steady state production (from 2030 onwards). Expenditure of a total of $37.5 billion over the life of the project on operating costs is expected. On-shore processing is the most significant operating cost.

 

Table 1.5 Average operating cost estimates during steady state operation (from 2030 onwards)

 

Section

Average Operating Cost
over Life of Mine

(US$ million pa)

Average Unit Cost

(US$/t - wet tonne
nodules recovered)

Average Unit Cost

(US$/t - dry tonne
processed)

Off-shore $240.74 $19.31 $25.40
Shipping $254.37 $20.40 $26.84
On-shore $1,286.19 $103.14 $135.71
Other $25.00 $2.00 $2.64
Total $1,806.31 $144.85 $190.59

 

1.13 Initial Assessment

 

The IA used product prices forecast by CRU (CRU, 2020). The averages of the forecast prices used (from 2024 onwards) are listed in Table 1.6.

 

Table 1.6 Average product prices assumed in IA

 

Parameter Unit Value
Ni metal US$/t $16,106
Ni contained Ni sulphate US$/t $17,711
Mn contained in SiMn product US$/dry metric tonne unit $4.53
Cu metal US$/t $6,787
Co metal US$/t $46,416
Co contained in Co sulphate US$/t $56,991
Ammonium sulphate US$/t $90

 

Note: Manganese ores are priced in dmtu (dry metric tonne units). A unit is 10 kg, or 1/100th of a tonne. For example, a tonne of material grading 45% Mn priced at US$4.00/dmtu would be worth US$180/t.

 

The IA indicates a positive economic outcome. Undiscounted post-tax net cash flow of US$30.6 billion is expected. An internal rate of return of 27% has been estimated from the financial model. Discounted cash flow analysis of unleveraged real cash flows, discounting at 9% per annum, indicates a pre-tax project net present value (NPV) of US$11.2 billion and a post-tax project NPV of US$6.8 billion. The discounted cash flows and progressive NPVs are shown in Figure 1.1. Excluding the inferred mineral resources from the economic analysis, the post-tax project NPV is estimated at $6.7 billion, which is not a significant difference from the economic analysis that includes the inferred mineral resources.

 

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Figure 1.1 Project NPV2021 and discounted cash flow

 

 

The date of the investment decision is expected to be 30 June 2023. NORI expects to spend $237 million on pre-project activities between 2021 and 2024. The future value of the project on 30 June 2023 (after the pre-project expenditure is sunk and time has elapsed) will be US$8.6 billion and the IRR from that point will be 29%.

 

The sensitivity of project economics to changes in the main variables was tested by selecting high and low values that represent a likely range of potential operating conditions. The variables with the biggest negative impact on NPV are all metal prices, total OPEX, collector speed, nickel sulphate price and development capex. In general, revenue drivers have the biggest impact, followed by OPEX variables and then CAPEX variables (Figure 1.2).

 

Figure 1.2 Tornado diagram of NPV sensitivity to variables

 

 

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The Qualified Persons caution that this IA is preliminary in nature, and that further planning, engineering studies, design, cost estimation and seafloor tests are required before Mineral Resources can be converted to Mineral Reserves. There is no certainty that the proposals and results presented in this IA will be realized. A prefeasibility study has not yet been undertaken. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

 

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Contents

 

1 Summary i
  1.1 Introduction i
  1.2 Location ii
  1.3 The ISA and the NORI tenements ii
  1.4 Geology and Mineral Resources iii
  1.5 Development plan v
  1.6 Mining concept vi
  1.7 Mineral processing and metallurgical testing vii
  1.8 Market studies viii
  1.9 Environmental studies, permitting, community, or social impact viii
  1.10 Conceptual production schedule ix
  1.11 Capital cost ix
  1.12 Operating cost x
  1.13 Initial Assessment x
       
2 Introduction 31
  2.1 Purpose of the Technical Report Summary 31
  2.2 Sources of information and data 31
  2.3 Field involvement 31
  2.4 Personnel 31
  2.5 Reliance on other experts 32
       
3 Property description and location 33
  3.1 Tenements and permits 33
    3.1.1 United Nations Convention on the Law of the Sea 34
    3.1.2 International Seabed Authority 36
  3.2 NORI obligations and sponsorship 37
    3.2.1 Work program 37
    3.2.2 Royalties and taxes 38
       
4 Accessibility, climate, local resources, infrastructure, and physiography 39
  4.1 Accessibility and infrastructure 39
  4.2 Climate 39
       
5 History 40
  5.1 Overview 40
  5.2 Pioneer Investors 40
  5.3 Sampling methods 42
  5.4 Sample preparation and analysis 44
    5.4.1 Ocean Minerals Company 44
    5.4.2 Yuzhmorgeologiya 45
    5.4.3 IOM 46
    5.4.4 Preussag 46
  5.5 QA/QC procedures 47
  5.6 Pioneer Investor sample data supplied to NORI 47
       
6 Geological setting and mineralisation 49
  6.1 Global distribution of nodules 49
  6.2 Tectonic setting and topographic features 49
    6.2.1 Sedimentation and nodule formation 50
  6.3 Polymetallic mineralisation 51
    6.3.1 Nodule grades 51
    6.3.2 Nodule abundance 51
  6.4 Seafloor polymetallic nodule facies 54
  6.5 Topographic / bathymetric facies 57
  6.6 Nodule morphology and formation 58
       
7   Exploration 59
  7.1 NORI 2012 campaign 59

 

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  7.2 NORI 2013 campaign 60
  7.3 NORI 2018 campaign 62
    7.3.1 Objectives and approach 62
    7.3.2 AUV survey 63
    7.3.3 Box coring 65
      7.3.3.1 Sample processing 71
    7.3.4 NORI sampling 73
    7.3.5 Image classification and size measurement 75
    7.3.6 Biological sampling 76
    7.3.7 Geotechnical sampling 76
    7.3.8 Exploration results 78
      7.3.8.1 Box core abundance 78
      7.3.8.2 Buried nodules 79
      7.3.8.3 AUV data 80
    7.3.9 Nodule abundance estimation derived from AUV camera data 83
  7.4 NORI 2019 campaign 88
    7.4.1 Box coring 88
    7.4.2 Nodule sampling 89
    7.4.3 Biological sampling 91
    7.4.4 Geotechnical sampling 91
    7.4.5 Exploration results 93
    7.4.6 Analysis of grade distribution by size fraction 98
       
8   Sample preparation, analysis, and security 101
  8.1 Security 101
    8.1.1 Box core samples 101
    8.1.2 Camera imagery 102
  8.2 Sample preparation and assaying 102
  8.3 Quality assurance and quality control procedures 2018 104
    8.3.1 Certified reference materials 104
    8.3.2 Blanks 104
    8.3.3 Duplicates 105
  8.4 Quality assurance and quality control procedures 2019 108
    8.4.1 Certified reference materials 108
    8.4.2 Blanks 109
    8.4.3 Duplicates 109
  8.5 Moisture content 111
       
9 Data verification 113
       
10 Mineral processing and metallurgical testing 114
  10.1 Introduction 114
  10.2 Literature review (from KPM concept study, 12 October 2017) 114
    10.2.1 Studies on the pyrometallurgical processing of polymetallic nodules 114
      10.2.1.1 Inco 115
      10.2.1.2 Sumitomo 117
      10.2.1.3 German Federal Institute for Geosciences and Natural Resources 118
      10.2.1.4 United States Bureau of Mines 120
      10.2.1.5 Indian National Metallurgical Laboratory 121
    10.2.2 Ni, Cu, and Co partition coefficients 121
      10.2.2.1 Experimental test work 121
      10.2.2.2 Commercial furnace operation 122
      10.2.2.3 Partition coefficients assumed for plant design criteria 124
    10.2.3 Mn reduction during smelting 124
    10.2.4 Processing of the EF alloy in Peirce-Smith converters 124
    10.2.5 Hydrometallurgical processing of Ni-Cu-Co matte 126
  10.3 NORI Test Work and Piloting 127
    10.3.1 Preliminary Work at FLSmidth 128

 

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    10.3.2 KPM Work 128
    10.3.3 Small Scale Work at XPS 129
      10.3.3.1 Converting of Artificial Matte 129
      10.3.3.2 Manganese Removal and Sulphidation 129
       
11 Mineral Resource estimates 131
  11.1 Polymetallic nodule sample data 131
    11.1.1 Historic sample data 131
    11.1.2 TOML sample data 132
    11.1.3 NORI 2018 sample data 132
    11.1.4 NORI 2019 sample data 133
    11.1.5 Representativeness of sampling 133
    11.1.6 Data integration 134
  11.2 NORI Area D 135
    11.2.1 Geological domains 135
    11.2.2 Nodule type and sediment drift 137
    11.2.3 Backscatter 137
    11.2.4 Bathymetry 137
    11.2.5 PRZ areas 138
    11.2.6 Data processing 138
    11.2.7 Declustering 139
    11.2.8 Outliers within the sample data 140
    11.2.9 Top-cuts 142
    11.2.10 Missing value imputation 145
    11.2.11 Domain modelling 146
    11.2.12 Data transformations 151
    11.2.13 Summary statistics of processed sample data 152
      11.2.13.1 Spatial continuity 153
      11.2.13.2 Polymetallic nodule abundance and nodule grades 153
      11.2.13.3 Backscatter 158
    11.2.14 Estimation of nodule abundance and grades 158
    11.2.15 Cut-off grade 160
    11.2.16 Mineral Resource classification 161
    11.2.17 Estimation results 164
    11.2.18 Comparison with previous resource estimates 167
  11.3 NORI Area A, B and C 169
    11.3.1 Boundaries and geological domains 169
    11.3.2 Nodule sample data 170
    11.3.3 Data processing 170
    11.3.4 Declustering 172
    11.3.5 Top-cuts 172
    11.3.6 Spatial continuity 173
    11.3.7 Geological block model 174
    11.3.8 Estimation of nodule abundance and grades 175
    11.3.9 Cut-off grade 176
    11.3.10 Mineral Resource classification 176
    11.3.11 Estimation Results 176
       
12 Mineral Reserve estimates 181
       
13 Mining methods 182
  13.1 Development plan 182
  13.2 Off-shore system concept 183
  13.3 Geotechnical considerations 185
  13.4 Collector Test and Hidden Gem conversion 187
  13.5 Project Zero 188
  13.6 Project One 189
    13.6.1 Upgrade of the Hidden Gem 190
    13.6.1 Conversion of Drill Ship 2 194

 

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    13.6.2 Collector Ship 1 194
    13.6.3 Collector vehicle 196
    13.6.4 Plume mitigation 199
    13.6.5 RALS 200
      13.6.5.1 Riser 200
      13.6.5.2 Airlift system 201
    13.6.6 PSV operations 205
    13.6.7 Collector support vessel 206
  13.7 Life of Mine nodule production 208
    13.7.1 Introduction 208
    13.7.2 LOM basis of design 209
    13.7.3 LOM production summary 217
    13.7.4 Inferred Mineral Resources 225
       
14 Processing and recovery methods 226
  14.1 Process design basis 226
    14.1.1 Plant throughput and availability 226
    14.1.2 Feed properties 227
    14.1.3 Nodule composition, speciation, and assay reconciliation 227
    14.1.4 Final product specifications 228
  14.2 Project Zero 229
  14.3 Project One 229
    14.3.1 Process description 229
      14.3.1.1 Pyrometallurgical processing 229
      14.3.1.2 Pyrometallurgical process steps 230
      14.3.1.3 Hydrometallurgical processing 231
      14.3.1.4 Hydrometallurgical process steps 232
    14.3.2   Key process parameters 233
      14.3.2.1 Pyrometallurgical plant 233
      14.3.2.1.1. Calcining 233
      14.3.2.1.2. Electric furnace smelting 233
      14.3.2.1.3. Converter aisle 234
      14.3.2.2 Hydrometallurgical refinery 234
      14.3.2.2.1. Matte storage and grinding 234
      14.3.2.2.2. Atmospheric leaching 235
      14.3.2.2.3. Pressure oxidative leaching 235
      14.3.2.2.4. Impurity removal and copper electrowinning 236
      14.3.2.2.5. Iron removal 237
      14.3.2.2.6. Cobalt solvent extraction 237
      14.3.2.2.7. Cobalt purification 238
      14.3.2.2.8. Nickel solvent extraction 238
      14.3.2.2.9. Cobalt sulphate crystallisation and packaging 239
      14.3.2.2.10. Cobalt Precipitation 239
      14.3.2.2.11. Nickel sulphate crystallisation and packaging 240
      14.3.2.2.12. Ammonium sulphate crystallisation and packaging 240
      14.3.2.2.13. Effluent Treatment 241
    14.3.3 Recoveries 241
    14.3.4 Plant footprint 242
    14.3.5 Infrastructure requirements: utilities, transportation and production 242
    14.3.6 Process plant ramp-up 243
       
15 Project infrastructure 244
  15.1 On-shore infrastructure 244
  15.2 Nodule transport 244
       
16 Market studies 247
       
17 Environmental studies, permitting and social or community impact 249
  17.1 Permitting process 249

 

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    17.1.1 Role of sponsoring state 250
    17.1.2 Compliance status 250
  17.2 Previous environmental studies 251
  17.3 Seabed physical environment 254
  17.4 Sediment geochemistry and composition 254
  17.5 Climate 255
  17.6 Large-scale oceanography 255
    17.6.1 Oceanic currents in NORI Area D 256
    17.6.2 Oceanographic studies 256
      17.6.2.1 Surface currents 258
      17.6.2.2 Water column vertical structure 259
      17.6.2.3 Suspended sediments, transmissivity and fluorescence 263
      17.6.2.4 Water column chemistry 264
      17.6.2.5 Sediment chemistry 264
  17.7 Ocean ecosystems 265
    17.7.1 Overview of ecosystem compartments 265
    17.7.2 Size classes of organisms 266
      17.7.2.1 Benthic megafauna 266
      17.7.2.2 Benthic macrofauna 267
      17.7.2.3 Benthic meiofauna 267
      17.7.2.4 Benthic microbial communities 268
      17.7.2.5 Benthic nodule fauna 268
      17.7.2.6 Benthic fish 271
      17.7.2.7 Pelagic micro-organisms 271
      17.7.2.8 Pelagic Phytoplankton 271
      17.7.2.9 Pelagic zooplankton and micronekton 271
      17.7.2.10 Pelagic nekton 271
      17.7.2.11 Marine mammals, reptiles and birds 272
    17.7.3 Ecosystem biodiversity 272
    17.7.4 Ecosystem trophic interaction 272
    17.7.5 Ecosystem interaction with existing economic activities 272
      17.7.5.1 Shipping 273
      17.7.5.2 Fisheries 273
  17.8 Environmental and Social Impact Assessment (ESIA) 275
    17.8.1 Environmental Impact assessment scoping 275
    17.8.2 Project environmental impacts 279
      17.8.2.1 Impacts to surface waters 279
      17.8.2.2 Impacts to midwater column 279
      17.8.2.3 Impacts to seafloor 280
      17.8.2.4 Benthic disturbance and recovery studies 280
    17.8.3 Scopes of work and terms of reference 280
    17.8.4 Social license / stakeholder engagement 281
    17.8.5 Project environmental impact assessment process 285
    17.8.6 Ecosystem Based Management 287
    17.8.7 Serious Harm 287
    17.8.8 Precautionary Approach 288
    17.8.9 Mitigation 288
    17.8.10 Environmental management and monitoring plans 289
    17.8.11 Environmental Management System 289
    17.8.12 Reporting 290
    17.8.13 Permitting risks 290
  17.9 Closure 291
  17.10 Onshore environmental and regulatory 291
       
18 Capital and operating costs 292
  18.1 Project scale-up 292
  18.2 Pre-project capital cost estimates 294
  18.3 Project-period capital cost estimates 294

 

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    18.3.1 Off-shore capital costs 294
      18.3.1.1 Project Zero: Hidden Gem Upgrade 294
      18.3.1.2 Project One: Hidden Gem Upgrade 296
      18.3.1.3 Project One: Drill Ship 2 Conversion 297
      18.3.1.4 Project One: Collector Ship 1 construction 299
      18.3.1.5 Collector support vessel 300
      18.3.1.6 Project management 300
    18.3.2 On-shore capital cost for Project One 300
  18.4 Sustaining capital cost estimates 302
  18.5 Closure cost estimates 302
  18.6 Operating cost estimates 302
    18.6.1 Off-shore operating costs 303
      18.6.1.1 Project Zero operating costs 303
      18.6.1.2 Project One operating costs 303
    18.6.2 Transportation costs 304
    18.6.3 Programme management and logistical costs 305
    18.6.4 Other operating costs 306
    18.6.5 On-shore operating costs – Project Zero 306
    18.6.6 On-shore operating costs – Project One 306
    18.6.7 Sulphidization costs 309
       
19 Economic analysis 310
  19.1 Inputs 312
    19.1.1 Commodity prices 312
    19.1.2 Tax 313
    19.1.3 Production schedule 314
  19.2 Results 314
  19.3 Inferred Mineral Resources 322
  19.4 Sensitivity analysis 322
       
20 Adjacent properties 324
       
21 Other relevant data and information 325
       
22 Interpretation and conclusions 326
  22.1 Mineral Resources 326
  22.2 Development plan 327
  22.3 Off-shore operations 327
  22.4 On-shore operations 328
  22.5 Environmental status 329
  22.6 Economic analysis 330
       
23 Recommendations 331
       
24 References 332
       
25 Reliance on information provided by the registrant 345

 

Tables

 

Table 1.1 NORI 2020 Mineral Resource estimate, in situ, for NORI Area D at 4 kg/m2 abundance cut-off v
Table 1.2 Metallurgical recoveries vii
Table 1.3 Production summary ix
Table 1.4 Capital cost estimates ix
Table 1.5 Average operating cost estimates during steady state operation  (from 2030 onwards) x
Table 1.6 Average product prices assumed in IA x
Table 2.1 List of Qualified Persons responsible for each Section 32
Table 2.2 Reliance on other experts 32

 

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Table 3.1 NORI Area block details 34
Table 3.2 NORI Area extents 34
Table 5.1 Summary of historical FFG samples in the NORI Area 48
Table 7.1 Assay results for NORI Area A and B nodule samples 62
Table 7.2 Weight loss of samples after drying 62
Table 7.3 Summary of data types collected by the AUV during the 2018 NORI campaign 65
Table 7.4 Nodule size distribution for samples recovered during the 2018 NORI campaign 73
Table 7.5 Sampling protocol 74
Table 7.6 Box core sample coordinates and polymetallic nodule weights 94
Table 8.1 CRM assays from NORI 2018 campaign 104
Table 8.2 Blank sample assays from NORI 2018 campaign 105
Table 8.3 Duplicate average sample grades by laboratory 107
Table 8.4 CRM assays from NORI 2019 campaigns 108
Table 8.5 Blank sample assays from NORI 2019 campaign 109
Table 8.6 Duplicate average sample grades from ALS 110
Table 8.7 Duplicate average sample grades from ALS and BV 111
Table 10.1 Comparison of sea nodule composition 114
Table 10.2 Results from Inco smelting tests 116
Table 10.3 Distribution of Elements During Reduction Smelting (Inco) 117
Table 10.4 Results of Sumitomo smelting tests 118
Table 10.5 Composition of matte produced by Sumitomo 118
Table 10.6 Results from the German smelting tests 119
Table 10.7 Partition coefficients from the German smelting tests 120
Table 10.8 Results of USBM Smelting Tests 120
Table 10.9 Results of Indian smelting tests 121
Table 10.10 Partition coefficients from sea nodule smelting tests 121
Table 10.11 Partition coefficients from various Cu and Ni slag reduction electric furnaces 123
Table 10.12 Converter mass balance from Soroako nickel smelter 125
Table 10.13 Comparison of partition coefficients during matte converting 125
Table 11.1 NORI 2020 Mineral Resource estimate, in situ, for the NORI Areas within the CCZ at 4 kg/m2 nodule cut-off. 131
Table 11.2 Summary statistics of historic polymetallic nodule data within NORI Areas A, B, C and D used for the 2012 Mineral Resource estimate 131
Table 11.3 Summary statistics of TOML Area F polymetallic nodule assays 132
Table 11.4 Summary statistics of the 2018 NORI Area D primary assay data. 133
Table 11.5 Summary statistics of the 2019 NORI Area D primary assay data. 133
Table 11.6 Summary of all manganese nodule data within NORI Area D 134
Table 11.7 Spatially weighted mean assays for NORI Area D samples 140
Table 11.8 Detected polymetallic nodule sample outliers 141
Table 11.9 Potential top-cut values for abundance, nickel, copper, manganese and cobalt values 142
Table 11.10 Top-cut values applied to abundance, nickel, copper, manganese and cobalt values 143
Table 11.11 Summary of samples within NORI Area D used for resource estimation 152
Table 11.12 Summary statistics of historic (declustered) samples within NORI Area D and TOML Area F 152

 

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Table 11.13 Summary of NORI 2018 nodule box-core and photo samples within NORI Area D used for resource estimation 152
Table 11.14 Summary statistics of NORI 2019 nodule box-core samples within NORI Area D used for resource estimation 153
Table 11.15 Summary statistics of TOML Area F nodule box-core samples adjacent to NORI Area D used for resource estimation 153
Table 11.16 Variogram models 155
Table 11.17 NORI Area D grid model extents 158
Table 11.18 2020 Mineral Resource estimate, in situ, for NORI Area D at 4 kg/m2 abundance cut-off 166
Table 11.19 Summary statistics of samples within the NORI Area used for the 2012 Mineral Resource estimate. 170
Table 11.20 Minimum and maximum UTM coordinates for NORI Exploration Areas 171
Table 11.21 NORI Areas A, B, C and D declustered statistics (historic data only). 172
Table 11.22 NORI Areas A, B, C and D top cuts used for NORI 2012 Mineral Resource estimate. 172
Table 11.23 Variogram models, NORI Area A, B and C 173
Table 11.24 NORI Area A, B and C block model framework (UTM coordinates). 175
Table 11.25 NORI Area A, B and C model variables. 175
Table 11.26 NORI Area A, B and C Mineral Resource estimate, in situ, at 4 kg/m2 abundance cut-off 178
Table 13.1 Key design data for off-shore systems 185
Table 13.2 Geotechnical properties of clays defined by UTEC, 2015. 186
Table 13.3 Available Volume for storage of nodules on the Hidden Gem 193
Table 13.4 Specifications for Collector Ship 1 PSV for Project One 195
Table 13.5 Collector vehicle specifications 197
Table 13.6 Riser pipe stack up 201
Table 13.7 Nominal airlift compressor specifications 202
Table 13.8 Relevant airlift experience and tests 203
Table 13.9 Collector support vessel specifications 207
Table 13.10 Nominal engineering parameters for Hidden Gem and Drill Ship 2 210
Table 13.11 Nominal engineering parameters - Collector Ship 1 210
Table 13.12 Seafloor production basis of design – Hidden Gem 211
Table 13.13 Seafloor production basis of design – Drill Ship 2 211
Table 13.14 Seafloor production basis of design - Collector Ship 1 211
Table 13.15 Collector system turning parameters basis of design 212
Table 13.16 Mineral Resource modifying factors 215
Table 13.17 Hidden Gem summary 218
Table 13.18 Drill Ship 2 summary 219
Table 13.19 Collector Ship 1 summary 220
Table 13.20 NORI Area D production summary 221
Table 14.1 Nodule assay for use in process modelling 227
Table 14.2 Preliminary Ni, Co product specifications 228
Table 14.3 Kiln parameters 233
Table 14.4 Electric furnace parameters 234
Table 14.5 Converter aisle parameters 234
Table 14.6 Atmospheric Leaching Parameters 235
Table 14.7 Pressure oxidative leaching parameters 236

 

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Table 14.8 Impurity removal and copper electrowinning parameters 237
Table 14.9 Iron removal parameters 237
Table 14.10 Cobalt SX Parameters 238
Table 14.11 Cobalt purification parameters 238
Table 14.12 Nickel SX parameters 239
Table 14.13 Cobalt sulphate crystallisation and packaging parameters 239
Table 14.14 Cobalt precipitation parameters 240
Table 14.15 Nickel sulphate crystallisation and packaging parameters 240
Table 14.16 Ammonium sulphate crystallisation and packaging parameters 241
Table 14.17 Effluent Treatment Parameters 241
Table 14.18 Pay metal recoveries for combined plant 242
Table 14.19 Estimated Power, Natural Gas and Water Requirements 242
Table 14.20 Major consumable requirements 242
Table 14.21 Annual product quantities 243
Table 17.1 Summary of outputs from June 3-5 workshop, San Diego, USA 278
Table 18.1 Summary of all capital costs 293
Table 18.2 Pre-project capital costs 294
Table 18.3 Project Zero: CAPEX for Hidden Gem upgrade 295
Table 18.4 Project One: CAPEX for upgrade of Hidden GEM 297
Table 18.5  Project One: CAPEX for conversion of Drill Ship 2 298
Table 18.6 Project One: CAPEX for Collector Ship 1 300
Table 18.7 Summary of project period on-shore capital costs 300
Table 18.8 Summary of project period on-shore capital costs by plant area 301
Table 18.9 Operating costs at steady state production 302
Table 18.10 Project Zero - Annual Off-shore operating cost 303
Table 18.11 Project One - Summary of annual off-shore operating costs for Hidden Gem and Drill Ship 2 303
Table 18.12 Project One - Summary of annual off-shore operating costs for Collector Ship 1 304
Table 18.13 Project One - Summary of annual off-shore operating costs for CSV 304
Table 18.14 Summary of parameters and costs for transport between vessels and transhipment 305
Table 18.15 Programme management and logistical cost 305
Table 18.16 Annual corporate and administration costs 306
Table 18.17 Summary of on-shore annual operating costs for Project One 307
Table 18.18 Summary of pyrometallurgical operating costs for Project One (4.88 Mtpa of dry nodules) 308
Table 18.19 Summary of hydrometallurgical operating costs for Project One (62 ktpa of produced nickel) 309
Table 19.1 Economic inputs 312
Table 19.2 Commodity prices 313
Table 19.3 Comparison of IA mine plan to Mineral Resource for NORI Area D 314
Table 19.4 Summary of cash flows 315
Table 19.5 Project revenues by year, over life of project 317
Table 19.6 Capital costs by year, over life of project 318
Table 19.7 Operating costs by year, over life of project 319
Table 19.8 Taxes and royalties by year, over life of project 320

 

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Table 19.9 Undiscounted cash flows by year, over life of project 321
Table 19.10 Sensitivity analysis inputs 323

 

Figures

 

Figure 1.1 Project NPV2021 and discounted cash flow xi
Figure 1.2 Tornado diagram of NPV sensitivity to variables xi
Figure 3.1 Location of NORI Project and other exploration areas within the Clarion-Clipperton Zone 33
Figure 3.2 Detail of location of NORI Areas A, B, C and D, from Figure 4.1 34
Figure 3.3 Map of seafloor jurisdictions 35
Figure 3.4 Maritime space under the 1982 UNCLOS 36
Figure 4.1 Global cargo shipping network 39
Figure 5.1 Schematic of Lockheed Group’s 1970s trial mining system 41
Figure 5.2 Remote operated collector used by the Lockheed Group in 1970s trial mining 42
Figure 5.3 Free fall grab sampler operation 43
Figure 5.4 Box core sampler operation 44
Figure 5.5 Box plots of sample grades within the NORI Area compared with all other data from the Reserved Blocks 48
Figure 6.1 Schematic diagram of average abundance of polymetallic nodules in four major locations 49
Figure 6.2 Bathymetric map of the Clarion-Clipperton Fracture Zone 50
Figure 6.3 Results from ISA Geological Model Project in the CCZ - combined cobalt, nickel, and copper grades 52
Figure 6.4 Results from the ISA Geological model project in the CCZ estimated nodule abundance 53
Figure 6.5 Polymetallic nodule facies in NORI Area D 54
Figure 6.6 Camera imagery showing change from Type 3 nodules (left), to Type 2 (right) 55
Figure 6.7 Map of nodule facies classification in NORI Area D 56
Figure 6.8 Polymetallic nodule types (ISA 2010) 58
Figure 7.1 NORI Area D bathymetry data 59
Figure 7.2 Subset of nodule samples recovered during NORI’s 2012 exploration campaign 60
Figure 7.3 Photos showing the operation of the epibenthic sled collecting nodules during the NORI 2013 campaign 61
Figure 7.4 Photos of nodules collected from NORI Area A during the NORI 2013 campaign 61
Figure 7.5 Reprocessed EM122 backscatter data from NORI Area D 2012 survey 63
Figure 7.6 Deployment ESVII Kongsberg Hugin AUV from the stern of the Maersk Launcher 64
Figure 7.7 AUV geosurvey data acquired during the 2018 NORI campaign 65
Figure 7.8 KC Denmark 0.75 m² box corer 67
Figure 7.9 Box core locations for 2018 NORI campaign shown by green circles with black centre-dot 68
Figure 7.10 Sequence of box core land-out footage from GoPro camera 70
Figure 7.11 On deck sample processing 72
Figure 7.12 Examples of nodules recovered during the 2018 NORI campaign 73
Figure 7.13 Coning and quartering process 75
Figure 7.14 Comparison of image classifier results vs caliper measurements 76
Figure 7.15 NORI Area D box core locations, showing those with biological sampling (in green) 77

 

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Figure 7.16 Box core abundance (in kg/m²) 78
Figure 7.17 Box core size-texture classification 79
Figure 7.18 Profile of nodule weight by depth in BC043 80
Figure 7.19 Comparison of AUV MBES data (ribbon) against EM122 vessel-based MBES 81
Figure 7.20 Examples of AUV MBES data showing detailed-scale geological features 82
Figure 7.21 Example of AUV camera photo mosaic showing nodules 83
Figure 7.22 Comparison of nodule long axis measurements, taken using digital callipers, and individual nodule wet weight for BC001, BC002, BC003, and BC005 84
Figure 7.23 Detail of image processing 85
Figure 7.24 Comparison of mean long axes lengths from AUV camera imagery and box cores 85
Figure 7.25 Comparison of Felix method and multiple linear regression method 86
Figure 7.26 Multiple linear regression model for nodule abundance 87
Figure 7.27 Nodule abundance estimates at 3.5 × 3.5 km node spacing within the Collector Test Site 88
Figure 7.28 Box corer on deck showing the USBL beacon mounting position 89
Figure 7.29 Box core processing flow sheet for Campaign 6B 90
Figure 7.30 Photographs of geotechnical plate load test (left) and CPT (Right) 92
Figure 7.31 Photographs of biological & geotechnical tube sampling 92
Figure 7.32 Map of NORI Area D showing box core sample locations and bathymetry 97
Figure 7.33 Relative difference of grade by size fraction – NiO (%) 98
Figure 7.34 Relative difference of grade by size fraction – CuO (%) 99
Figure 7.35 Relative difference of grade by size fraction – CoO (%) 99
Figure 7.36 Relative difference of grade by size fraction – MnO (%) 100
Figure 7.37 Proportions of size fractions by mass (relative percentage) 100
Figure 8.1 Sample storage 101
Figure 8.2 Comparison of primary samples assayed at ALS and duplicate samples assayed at ALS 106
Figure 8.3 Comparison of primary samples assayed at ALS and duplicate samples assayed at BV 107
Figure 8.4 Comparison of primary samples assayed at ALS and duplicate samples assayed at ALS 110
Figure 8.5 Comparison of primary samples assayed at ALS and duplicate samples assayed at BV 111
Figure 10.1 Schematic flow diagram of the Inco process for treating polymetallic nodules 116
Figure 10.2 Estimated Slag Liquidus as a function of MnO2/SiO2 ratio 119
Figure 10.3 Relationship between Co and Fe recoveries to alloy from Co smelting tests (Barnes) 122
Figure 10.4 Relationship between Ni and Fe yields in laterite smelters, actual vs theoretical 123
Figure 10.5 Metal recovery versus iron content in alloy during converting  (Japanese study) 126
Figure 11.1 Cumulative probability plots of abundance and assays for the integrated sample data 135
Figure 11.2 Map of NORI Area D geological domains. 136
Figure 11.3 Proportions of geological domains in NORI Area D 136
Figure 11.4 NORI Area D nodule type domains. 137
Figure 11.5 NORI Area D slope angle 138
Figure 11.6 Plan showing location of data points and the NORI Area D boundary. 139
Figure 11.7 Pairs plot showing correlations between NORI Area D sample values 141
Figure 11.8 Location of identified outliers 142
Figure 11.9 Histogram, cumulative probability and mean-variance plots of abundance and grades for NORI Area D nodule samples 144
Figure 11.10 Histogram and cumulative probability plots of MnO:SiO2 ratio for NORI Area D nodule samples 146
Figure 11.11 Frequency of NORI Area D nodule samples by geological domains 146
Figure 11.12 Frequency of NORI Area D nodule samples by nodule type domains 147
Figure 11.13 Boxplots of NORI Area D nodule abundance and assays by geological domain 148
Figure 11.14 Boxplots of NORI Area D nodule abundance and assays by nodule type domain 149
Figure 11.15 Scatter plots of NORI Area D nodule abundance versus backscatter, slope and aspect and manganese and silicon versus slope. 150
Figure 11.16 Boxplots of NORI Area D nodule abundance versus backscatter, slope and aspect and manganese and silicon versus slope. 151

 

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Figure 11.17 Variogram maps of NORI Area D nodule sample assays 154
Figure 11.18 Abundance omni-directional, 065° and 165° directional variograms 155
Figure 11.19 Nickel omni-directional, 065° and 165° directional variograms 155
Figure 11.20 Copper omni-directional, 065° and 165° directional variograms 156
Figure 11.21 Cobalt omni-directional, 075° and 165° directional variograms 156
Figure 11.22 Manganese omni-directional, 075° and 165° directional variograms 156
Figure 11.23 Silicon omni-directional, 075° and 165° directional variograms 157
Figure 11.24 Iron omni-directional, 075° and 165° directional variograms 157
Figure 11.25 Phosphorus omni-directional, 075° and 165° directional variograms. 157
Figure 11.26 Backscatter omni-directional, 065 and 155 directional variograms. 158
Figure 11.27 NORI Area D 500 m by 500 m grid model, showing percentage coverage of nodules 159
Figure 11.28 Cumulative probability plots comparing nodule samples with IDW and SK estimates. 160
Figure 11.29 Abundance: Probability of exceeding 15% of mean at 90% confidence for quarterly and yearly production. 162
Figure 11.30 Mineral Resource classification boundaries 163
Figure 11.31 Nodule abundance and nodule grades 3.5 km by 3.5 km SK panel estimates for NORI Area D 165
Figure 11.32 NORI Area D abundance-tonnage curve. 166
Figure 11.33 2020 Mineral Resource model coloured by abundance, in seven 40 Mt (wet) increments 167
Figure 11.34 Ratio 2020:2018 abundance estimates, showing the 2018 resource classification boundaries 169
Figure 11.35 NORI Areas A, B, C and D, showing location of historic data 171
Figure 11.36 Variogram map for nickel, NORI Areas A, B and C 173
Figure 11.37 Major and semi-major variograms for nickel (red line is actual data and blue line is modelled curve) 174
Figure 11.38 NORI Area A, B and C Mineral Resource abundance tonnage curves 177
Figure 11.39 Map of sample distribution and block model estimates of nickel, NORI 2012 estimates 179
Figure 11.40 Map of sample distribution and block model estimates of abundance, NORI 2012 estimates 180
Figure 13.1 Overall extraction operation 184

 

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Figure 13.2 Flow of nodule material 185
Figure 13.3 Hidden Gem drillship (courtesy Allseas) 187
Figure 13.4 Hidden Gem – original drillship profile 191
Figure 13.5 Hidden Gem - original drillship deck plan 191
Figure 13.6 Hidden Gem - converted for Project Zero - profile 192
Figure 13.7 Hidden Gem - converted for Project Zero - deck plan 192
Figure 13.8 Hidden Gem - converted for Project Zero - sections 193
Figure 13.9 Material handling, dewatering and offloading systems 194
Figure 13.10 Collector Ship 1, production support vessel 195
Figure 13.11 Preliminary design for the collector vehicle 196
Figure 13.12 Normal collecting operations 198
Figure 13.13 Collector change-out operations concept 199
Figure 13.14 Illustration of collector vehicle with plume mitigation (patent pending) 200
Figure 13.15 Main air compressor (Elliott Group model 46M6I) 202
Figure 13.16 Nodule and air discharge concept 204
Figure 13.17 Continuous Flow Pressure Let-down System shown with dewatering equipment (patent pending) 204
Figure 13.18 Schematic of buffer storage and material handling on Collector Ship 1 206
Figure 13.19 Semi-submersible subsea oilwell support vessel, Q4000 207
Figure 13.20 Deck plan for collector support vessel 208
Figure 13.21 NORI 30-year potential production areas 209
Figure 13.22 Conceptual nodule collection path sequencing 213
Figure 13.23 Impact of collector mean time between repair on overall utilisation - Collector Ship 1 214
Figure 13.24 NORI Area D LOM production summary 217
Figure 13.25 LOM operational parameters 222
Figure 13.26 Variation in grades of nickel, copper, cobalt and phosphorus across LOM 222
Figure 13.27 Variation in grades of manganese, iron, silicon and MnO:SiO2 ratio across LOM 223
Figure 13.28 Cumulative LOM nodule production 223
Figure 13.29 Histogram of nodule abundance 224
Figure 13.30 Hidden Gem collector speed nodule abundance relationship 224
Figure 13.31 Drill Ship 2 collector speed nodule abundance relationship 225
Figure 13.32 Collector Ship 1 collector speed nodule abundance relationship 225
Figure 14.1 Pyrometallurgical process block flow diagram 230
Figure 14.2 Hydrometallurgical process block flow diagram 232
Figure 15.1 Unloading bulk minerals at Mexican port of Lazaro Cardenas (Terminales Portuarias de Pacifico) 245
Figure 15.2 Offloading Operation: (left) with a conventional tanker; (right) with a DP tanker 246
Figure 17.1 Simplified surface sediment facies in the CCZ 254
Figure 17.2 NORI Area D mooring and water quality sampling locations 257
Figure 17.3 Equipment configuration on the mooring array 258
Figure 17.4 Surface currents recorded by SOFAR drifters 259
Figure 17.5 Temperature (°C) profile of NORI Area D during Campaign 4A 260
Figure 17.6 Salinity (psu) profile of NORI Area D during Campaign 4A 261
Figure 17.7 Dissolved oxygen (mg L-1) profile of NORI Area D during Campaign 4A 262

 

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Figure 17.8 pH profile of NORI Area D during Campaign 4A 263
Figure 17.9 Profiles of turbidity (NTU) (Left); percent transmissivity (centre) and fluorescence (mg m-3 Right), in NORI Area D during Campaign 4A 264
Figure 17.10 Type 1 nodules coloured by their placement within the 8-Cluster geoform map of NORI Area D 269
Figure 17.11 Examples of megafauna from NORI Area D (Note Each scale square is 1x1 cm) 270
Figure 17.12 Average annual distributions of the purse-seine catches in the Eastern Pacific Ocean of yellowfin tunas 274
Figure 17.13 Average annual catches of bigeye (BET) and yellowfin (YFT) tunas in the Pacific Ocean 275
Figure 17.14 Potential impact zones through the water column 277
Figure 17.15 Communications and Stakeholder Engagement objectives (scoping phase) 284
Figure 17.16 Qualitative, semi-quantitative and fully quantitative risk assessments 286
Figure 19.1 Gantt chart showing proposed schedule of main project phases 311
Figure 19.2 Cumulative undiscounted cash flows 315
Figure 19.3 Project NPV2021 and discounted cash flow 316
Figure 19.4 Tornado diagram of NPV sensitivity to variables 322

 

Distribution list
1 e-copy to DeepGreen Metals Inc.
1 e-copy to AMC Brisbane office

 

OFFICE USE ONLY

Version control (date and time)

14 May 2021 23:30

 

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List of acronyms

 

AAS Atomic absorption spectroscopy
ALS ALS Laboratory Group
AMC AMC Consultants Pty Ltd
AMR Arbeitsgemeinschaft Meerestechnisch Rohstoffe
APEI Area of Particular Environmental Interest
AUV Autonomous underwater vehicle
BC Box core
BGR German Federal Institute for Geosciences and Natural Resources
BV Bureau Veritas laboratory
CCZ Clarion-Clipperton Zone
CIM Canadian Institute of Mining, Metallurgy and Petroleum
CV Coefficient of variation
The Convention United Nations Convention on the Law of the Sea 1982
DeepGreen DeepGreen Metals Inc.
DGE DeepGreen Engineering Pte. Ltd.
DISCOL Disturbance and Recolonisation Experiment
DOMES Deep Ocean Mining Environmental Study
DP Dynamic positioning
EF Electric furnace
EIA Environmental Impact Assessment
EIS Environmental Impact Statement
EMP Environmental Management Plan
EMS Environmental Management System
EW Electro-winning
FFG Free-fall grab samplers
FV Finishing vessel
Glencore Glencore International Ag
Golder Golder Associates Pty Ltd.
ICP-MS Inductively coupled plasma mass spectrometry
ID Inside diameter
IDW Inverse Distance Weighting – an estimation method utilising distance-weighted local averages
IFREMER lnstitut Français de Recherche pour l’Exploitation de la Mer (French Research Institute for Exploitation of the Sea)
Inco International Nickel Corporation
IOM lnteroceanmetal Joint Organisation
IRR Internal rate of return
ISA International Seabed Authority
IX Ion exchange
LED Light-emitting diode
LME London Metal Exchange
MBES Multi-beam echo sounder
NI 43-101 Canadian National Instrument 43-101
NOAA National Oceanic and Atmospheric Administration
NORI Nauru Ocean Resources Inc.
NN Nearest neighbour estimation method
NPV Net present value
OD Outside diameter
OK Ordinary kriging – an estimation method utilising distance-weighted local averages
OMI Ocean Mining Inc.

 

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OMCO Ocean Minerals Company
PEA Preliminary economic assessment
PFS Pre-feasibility study
PLS Pregnant liquor/leach solution
POX Pressure oxidative leaching
PSV Production support vessel
QAQC Quality assurance and quality control
QP Qualified Person, as defined by Canadian National Instrument 43-101
RALS Riser and lift system
R-type Rough type nodules
Regulations Regulations on Prospecting and Exploration for Polymetallic Nodules in the Area
ROV Remotely operated vehicle
RKEF Rotary kiln and electric furnace
SBP Sub-bottom profiler
S-R-type Smooth-rough type nodules
SSS Sidescan sonar
S-type Smooth type nodules
SV Sulphidation vessel
SX Solvent extraction
TOC Total organic carbon
TOML Tonga Off-shore Mining Limited
UNCLOS United Nations Convention on the Law of the Sea
USBL Ultra-short baseline
UTM Universal Transverse Mercator Cartesian coordinate system
UTP Underwater transponder array
Var Variance
WROV Work Class remotely operated vehicle
XRF X-ray fluorescence analysis
Yuzhmorgeologiya State Enterprise Yuzhmorgeologiya (Russian Federation)

 

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List of elements

 

Al Aluminium
As arsenic
Ba barium
Ca calcium
Cd cadmium
Ce cerium
Cl chlorine
Co cobalt
Cu copper
Fe iron
H2O hydrogen dioxide
H2S hydrogen sulphide
K potassium
La lanthanum
Mg magnesium
Mn manganese
MnO manganese oxide
MnO2 manganese dioxide
Mo molybdenum
Na sodium
NaHS sodium hydro sulphide
Na2S sodium sulphide
Nd neodymium
Ni nickel
P phosphorus
Pb lead
REE rare earth elements
S sulphur
SiO2 silicon dioxide
Sr strontium
Ti titanium
V vanadium
Y yttrium
Zn zinc
Zr zirconium

 

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List of units

 

° degree
°C degrees Celsius
% percent
% w/w % mass/mass or weight
µm microns
cm centimetre
cm/s centimetre per second
dmtu dry metric tonne unit
G gram
GWh gigawatt-hours
kg kilogram
kg/m² kilograms per square metre (surface abundance)
km kilometre
km² square kilometre
kPa kilopascal
kt kilotonne (metric)
kt/a kilotonnes (metric) per annum
kWh/h kilowatt hours per hour
kWh/t kilowatt hours per tonne
Lb pound
M metre
m/h metres per hours
m/s metres per second
m2 square metre
m3 cubic metre
m³/y cubic metres per year
mbsl metres below sea level
mg/L milligrams per litre
mm millimetre
MPa megapascal
Mt million tonnes(metric)
Mtpa million tonnes (metric) per annum
mV millivolt
MW megawatt
nm nautical mile
Nm3 cubic metre of gas at standard temperature and pressure
ppm parts per million
ppmw parts per million weight
S second
T tonne (metric)
t/d tonnes (metric) per day
t/h tonnes (metric) per hour
US$ United States dollar
y year

 

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2Introduction

 

A very large nickel, manganese, cobalt, and copper resource occurring as polymetallic nodules is located in the Clarion-Clipperton Zone (CCZ) of the northeast Pacific Ocean between Hawaii and Mexico. The nodules are located at depths of between 4,000 to 6,000 m and have been explored with considerable success between the mid-1960s and the present day using a variety of deep-sea technologies. Successful trial extraction in the CCZ has also been carried out to demonstrate that the nodules can be collected and pumped to a surface platform and processed for recovery of metals.

 

Interest in seafloor mineral deposits grew through the 1960s. Several commercial and government funded organisations and consortia started exploring the oceans as part of a cooperative program known as the International Decade of Ocean Exploration. These organisations became known as Pioneer Investors.

 

Exploration of the seafloor in international waters is now administered by the International Seabed Authority (ISA) and regulated by the United Nations Convention on the Law of the Sea (UNCLOS). These institutions operate on the principle that the ocean floor beyond the limits of national jurisdiction, known as the Area, is the common heritage of mankind.

 

In July 2011, Nauru Ocean Resources Inc. (NORI), a subsidiary of DeepGreen Metals Inc. (DeepGreen), was granted an exploration contract over 74,830 km2 (the NORI Area or the Property) in the CCZ consisting of four exploration areas (Area A, B, C and D). NORI’s contract for exploration of polymetallic nodules was approved by the Council of the ISA on 19 July 2011, for a term of 15 years and then signed with the ISA on 22 July 2011.

 

DeepGreen commissioned AMC Consultants Pty Ltd (AMC) to undertake an Initial Assessment (IA) of the Mineral Resource contained in one of these blocks, NORI Area D, (the Project) and compile a Technical Report Summary compliant with SEC Regulation S-K (subpart 1300).

 

2.1Purpose of the Technical Report Summary

 

AMC understands that DeepGreen may file this Technical Report Summary with Securities Exchange Commission as part of an S-4 filing to support the merger between Sustainable Opportunities Acquisition Corporation and DeepGreen Metals Inc.

 

2.2Sources of information and data

 

This Technical Report Summary is based on information and reports supplied by NORI or in the public domain. Section 27 lists background documents that are referenced by the higher-level reports.

 

2.3Field involvement

 

Ian Stevenson, an independent consultant trading as Margin - Marine Geoscience Innovation participated in the 2018 off-shore campaign (Campaign 3) on the Maersk Launcher which carried out surveys and sampling in the NORI Area D from 26 April - 4 June 2018. Ian Lipton, Principal Geologist, AMC, was involved in the development of sampling strategies and procedures and was in daily contact with the off-shore campaign as it was implemented, providing input as required to ensure data quality and veracity.

 

2.4Personnel

 

The Sections that each of the Qualified Persons (QPs) were responsible for are summarised in Table 2.1. In addition, each of the QPs contributed to Sections 22 to 24, where relevant to the Sections for which they were primarily responsible.

 

AMC has relied upon information provided by the registrant in preparing its findings and conclusions regarding some aspects of modifying factors, as set out in Section 25.

 

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Table 2.1 List of Qualified Persons responsible for each Section

 

Qualified Person Responsible for the following report Sections:
AMC Consultants Pty Ltd Sections 1-5, 8.2, 8.3, 8.4, 8.5, 9, 11, 12, 13.3, 13.7, 14.2, 15.1, 16, 17, 18 (except 18.3.1, 18.3.2, 18.6.1, 18.6.6), 19, 20-25
Margin - Marine Geoscience Innovation Sections 6, 7, 8.1
Canadian Engineering Associates Ltd Sections 10, 14.1, 14.3, 18.3.2, 18.6.6
Deep Reach Technology Inc Section 13.1, 13.2, 13.4, 13.5, 13.6, 15.2, 18.3.1, 18.6.1

 

2.5Reliance on other experts

 

The QPs have relied upon other experts for some sections in this report. These are summarised in Table 2.2.

 

Table 2.2 Reliance on other experts

 

Expert Report Sections:
Picton Group Pty Ltd Section 17

 

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3Property description and location

 

The NORI Property is located within the CCZ of the northeast Pacific Ocean Figure 3.1. The CCZ is located in international waters between Hawaii and Mexico. The western end of the CCZ is approximately 1,000 km south of the Hawaiian island group. From here, the CCZ extends over 4,500 km east-northeast, in an approximately 750 km wide trend, with the eastern limits approximately 2,000 km west of southern Mexico. The region is well-located to ship nodules to the American continent or across the Pacific to Asian markets.

 

Figure 3.1 Location of NORI Project and other exploration areas within the Clarion-Clipperton Zone

 

Source: https://www.isa.org.jm/map/clarion-clipperton-fracture-zone, downloaded 18 February 2021

 

3.1Tenements and permits

 

In July 2011, NORI was granted a polymetallic nodule exploration contract by the ISA (NORI Exploration Contract). The contract was granted pursuant to the Regulations on Prospecting and Exploration for Polymetallic Nodules in the Area (adopted 13 July 2000) and formalises an exploration area, a term of 15 years for the contract, and a program of activities for the first five-year period (NORI Exploration Contract). The contract also formalises the rights of NORI around tenure. Pursuant to the Regulations, NORI has the priority right to apply for an exploitation contract to exploit polymetallic nodules in the same area (Regulation 24(2)).

 

The NORI Exploration Contract may be extended for periods of 5 years at a time beyond the initial 15-year period, provided NORI has made efforts in good faith to comply with the requirements of the plan of work.

 

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The NORI contract area comprises four separate blocks (A, B, C and D) in the CCZ with a combined area of 74,830 km2 Figure 3.2, Table 3.1 and Table 3.2. These areas were previously explored by three Pioneer Investors.

 

Figure 3.2 Detail of location of NORI Areas A, B, C and D, from Figure 4.1

 

Source: https://www.isa.org.jm/map/clarion-clipperton-fracture-zone, downloaded 18 February 2021. Legend as in Figure 4.1

 

Table 3.1 NORI Area block details

 

Area Size (km2) ISA block number Pioneer investor
A 8,924 13 Yuzmorgeologiya
B 3,519 15 Yuzmorgeologiya
C 37,227 22 Interoceanmetal Joint Organisation (IOM)
D 25,160 25 Arbeitsgemeinschaft Meerestechnisch Rohstoffe (AMR)

 

Table 3.2 NORI Area extents

 

Area Minimum
Latitude
(DD)
Maximum
Latitude
(DD)
Minimum
Longitude
(DD)
Maximum
Longitude
(DD)
Minimum
UTM X (m)
Maximum
UTM X (m)
Minimum
UTM Y (m)
Maximum
UTM Y (m)
UTM
Zone
A 11.5000 13.00000 -134.5830 -133.8330 545220.4 627276.0 1271339 1437255 8
B 13.5801 14.00000 -134.0000 -133.2000 607995.7 694759.8 1501590 1548425 8
C 12.0000 14.93500 -123.0000 -120.5000 500000.0 769458.3 1326941 1652649 10
D 9.8950 11.08333 -117.8167 -116.0667 410465.2 602326.1 1093913 1225353 11

DD – Decimal degrees, UTM - Universal Transverse Mercator map projection

 

To date, no exploitation licences for extracting minerals from the seafloor within the Area have been granted.

 

3.1.1United Nations Convention on the Law of the Sea

 

The international seabed area (otherwise known as the Area) is defined as the seabed and subsoil beyond the limits of national jurisdiction (UNCLOS Article 1). Figure 3.3 shows a map of the Area (blue zone) as well as 200 nautical mile exclusive economic zones (grey zone) and extended continental shelf zones (orange zone). Figure 3.4 shows the relationships between depth, distance and jurisdiction.

 

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The principal policy documents governing the Area include:

 

The United Nations Convention on the Law of the Sea, of 10 December 1982 (The Convention).
The 1994 Agreement relating to the Implementation of Part XI of the United Nations Convention on the Law of the Sea of 10 December 1982 (the 1994 implementation Agreement).

 

The Convention deals with, among other things, navigational rights, territorial sea limits, exclusive economic zone jurisdiction, the continental shelf, freedom of the high seas, legal status of resources on the seabed beyond the limits of national jurisdiction, passage of ships through narrow straits, conservation and management of living marine resources in the high seas, protection of the marine environment, marine scientific research, and settlement of disputes.

 

Part XI of the Convention and the 1994 Implementation Agreement deals with mineral exploration and exploitation in the Area, providing a framework for entities to obtain legal title to areas of the seafloor from the ISA for the purpose of exploration and eventually exploitation of resources.

 

The Convention entered into force on 16 November 1994. A subsequent agreement relating to the implementation of Part XI of the Convention was adopted on 28 July 1994 and entered into force on 28 July 1996. The 1994 Implementation Agreement and Part XI of the Convention are to be interpreted and applied together as a single instrument.

 

As of 20 August 2020, the Convention had been signed by 167 States (countries) and the European Union. The United States of America is currently not a party to the Convention.

 

Figure 3.3 Map of seafloor jurisdictions

 

 

 

Note: International seabed area map (blue zone) as well as 200 nautical mile exclusive economic zones (grey zone) and extended continental shelf zones (orange zone). Source: Marine Geospatial Ecology Lab, Duke University (2011).

 

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Figure 3.4 Maritime space under the 1982 UNCLOS

 

 

Source: DeepGreen - adapted from UNCLOS, 1982

 

3.1.2International Seabed Authority

 

The ISA is an autonomous international organisation established under the Convention and the 1994 Implementation Agreement to organise and control activities in the Area, particularly with a view to administering and regulating the development of the resources of the Area in accordance with the legal regime established in the Convention and the 1994 Implementation Agreement.

 

All rules, regulations, and procedures issued by the ISA to regulate prospecting, exploration, and exploitation of marine minerals in the Area are issued within a general legal framework established by the Convention and the 1994 Implementation Agreement.

 

To date, the ISA has issued (https://www.isa.org.jm/mining-code/ Regulations):

 

The Regulations on Prospecting and Exploration for Polymetallic Nodules in the Area (adopted 13 July 2000; the Regulations).
The Regulations on Prospecting and Exploration for Polymetallic Sulphides (adopted 7 May 2010).
The Regulations on Prospecting and Exploration for Cobalt-Rich Ferromanganese Crusts in the Area (July 2012).

 

The ISA is currently working on the development of a legal framework to regulate the exploitation of polymetallic nodules in the international seabed area.

 

In 2014, the ISA completed a study looking at comparative extractive regulatory regimes. This was followed in March 2014 with a stakeholder survey seeking comments on what financial, environmental, and health and safety obligations should be included under the framework (ISA 2014).

 

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In March 2019, the Council of the ISA released the advance and unedited text (English only) of the Draft Regulations on Exploitation of Mineral Resources in the Area (ISBA/25/LTC/WP.1) (ISA, 2018). The revised draft incorporated the consideration of requests addressed to the Legal & Technical Commission by the Council during the first part of the 24th Session in March 2018, comments by the Commission, and also reflected the responses to the first draft from stakeholder submissions. The ISA declared a target of July 2020 to have the regulations approved, however the July session was deferred as a result of COVID-19 pandemic.

 

Pursuant to paragraph 15(a) and (b) of Section 1 of the annex to the 1994 Implementation Agreement, which relates to article 162 (2)(o)(ii) of the Convention, the ISA Council must also adopt such exploitation regulations within two years of a formal request being made by any State which intends to apply for approval of a plan of work for exploitation.

 

3.2NORI obligations and sponsorship

 

During exploration NORI, is required to, among other things:

 

Submit an annual report to the ISA.
Meet certain performance and expenditure commitments.
Pay an annual overhead charge (currently US$60,000) to cover the costs incurred by the ISA in administering and supervising the contract.
Implement training programs for personnel of the ISA and developing countries in accordance with a training program proposed by NORI in its licence application and five-year work plans.
Take measures to prevent, reduce, and control pollution and other hazards to the marine environment arising from its activities in the Area.
Maintain appropriate insurance policies.
Establish environmental baselines against which to assess the likely effects of its program of activities on the marine environment.
Establish and implement a program to monitor and report on such effects.

 

NORI is sponsored to carry out its mineral exploration activities in the Area by the Republic of Nauru, pursuant to a certificate of sponsorship signed by the Government of Nauru on 11 April 2011. Sponsorship of an entity requires the sponsoring State to certify that it assumes responsibility for the entity’s activities in the Area in accordance with the Convention. NORI is a Nauruan incorporated entity and is subject to applicable Nauruan legislation and regulations.

 

In 2015 the Republic of Nauru enacted the International Seabed Minerals Act, which establishes the Nauru Seabed Minerals Authority to administer Nauru’s sponsorship of activities carried out in the Area by companies sponsored by Nauru.

 

In June 2017, the Republic of Nauru and NORI entered into a Sponsorship Agreement formalising certain obligations of the parties in relation to NORI’s exploration and potential exploitation of the NORI Contract Area of the CCZ.

 

3.2.1Work program

 

As of the date of this Technical Report, NORI is in the ninth year of its exploration contract.

 

In 2016 NORI submitted to the ISA proposed activities for the second five-year period of its exploration contract. NORI indicated that work would focus on:

 

Reducing project uncertainties and technical risks.
Optimising the on-shore processing and off-shore production systems (including increasing performance and reliability).
Improving project economics, including decreasing estimated capital and operating expenditure as well as increasing projected revenues.

 

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NORI forecast estimated expenditure of US$5 million over the period 2017 to 2021, however noted the figure may be revised based upon the results of the next phase of engineering work. To date NORI has exceeded this level of expenditure on the NORI Contract Area.

 

3.2.2Royalties and taxes

 

Royalties and taxes payable on any future production from the NORI Area will be stipulated in the ISA’s exploitation regulations. While the rates of payments are yet to be set by the ISA, the 1994 Implementation Agreement (Section 8[1](b]) prescribes that the rates of payments “shall be within the range of those prevailing in respect of land-based mining of the same or similar minerals in order to avoid giving deep seabed miners an artificial competitive advantage or imposing on them a competitive disadvantage.”

 

An ad hoc ISA working group workshop held on 21–22 February 2019 discussed a number of potential royalty and taxation regimes supported by modelling conducted by the Massachusetts Institute of Technology. No formal recommendations were forthcoming however a 2% ad valorem royalty increasing to 6% after a period of five years of production was discussed as well as a 1% ad valorem environmental levy. This is what has been included in the IA model.

 

Under the Sponsorship Agreement between the Republic of Nauru and NORI, upon reaching a minimum recovery level within the tenement area, NORI has agreed to pay the Republic of Nauru a seabed mineral recovery payment for polymetallic nodules recovered from the tenement area, annually adjusted (from year 5 of production) on a compounding basis based on the official inflation rate in the USA.

 

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4Accessibility, climate, local resources, infrastructure, and physiography

 

4.1Accessibility and infrastructure

 

The CCZ lies between Hawaii and Mexico and is accessible by ship from various ports in the United States and South America. As the CCZ deposit does not include any habitable land and is not near coastal waters, there is no requirement to negotiate access rights from landowners for seafloor mining operations. All personnel and material will be transported to the project area by ship. The region is well located to ship nodules to the American continent or across the Pacific Ocean to Asian markets. The CCZ is generally outside major shipping lanes as indicated in Figure 4.1 which shows the global cargo shipping network, illustrating the trajectories of all cargo ships bigger than 10,000 gross tonnage during 2007.

 

Figure 4.1 Global cargo shipping network

 

Note: The colour scale indicates the number of journeys along each route.

Source: Adapted from Kaluza et al. 2010.

 

4.2Climate

 

The CCZ has a tropical oceanic climate, with average temperatures of from 20 to 32 °C. Minimum and maximum temperatures generally occur in March and September, respectively (ISA 2001), and the average sea surface temperature is 25 °C. The CCZ is located in open ocean and is subject to tropical weather patterns.

 

Off-shore operations are planned to run throughout the year, with the exception of hurricane events, which are expected to occur once every three years. Tropical hurricanes are difficult to predict due to their erratic frequency but have high intensity over short periods and occur mostly during the period from May to October (Tilot, 2006, GSR 2018).

 

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5History

 

5.1Overview

 

Submarine ferromanganese concretions were first discovered in the Kara Sea off Siberia in 1868 (ISA 2010, citing Earney 1990). HMS Challenger, during its round the world expedition from 1873 to 1876, collected many small dark brown balls, rich in manganese and iron, which were named manganese nodules (ISA 2010 citing Murray and Reynard [1891], Manheim [1978], and Earney [1990]).

 

Since the 1960s, polymetallic nodules have been recognised as a potential source of nickel, copper, cobalt, and manganese, and have been comparatively well studied because of their potential economic importance (Mero 1965). Scientific expeditions demonstrated that polymetallic nodules have a widespread occurrence in the world’s oceans although their metal content and concentration vary from region to region.

 

During the International Decade of Ocean Exploration and prior to the implementation of UNCLOS, many off-shore exploration campaigns were completed by international organisations and consortia. A number of at-sea trial mining operations were successfully carried out in the CCZ in the 1970s to test potential mining concepts. These system tests evaluated the performance of a self-propelled and several towed collection and mining devices, along with submersible pumps and airlift technology for lifting the nodules from the deep ocean floor to the support vessel.

 

The US National Oceanic and Atmospheric Administration (NOAA) monitored some of these tests as the principal effort of the Deep Ocean Mining Effects Study (DOMES II) program. The information collected during these activities provided key inputs to the impact analysis presented by NOAA in its Final Programmatic Deep-Sea Mining Environmental Impact Statement.

 

5.2Pioneer Investors

 

For the purpose of this report the Pioneer Investors include those entities that carried out substantial exploration in the Area prior to the entry into force of the Convention, as well as those entities that inherited such exploration data. This Section describes some of the more important activities of the Pioneer Investors.

 

NORI Area D was originally explored by Arbeitsgemeinschaft Meerestechnisch Rohstoffe (AMR). AMR subsequently joined Ocean Management Inc. (OMI). The OMI consortium comprised Inco Ltd (Canada), AMR (Federal Republic of Germany), SEDCO Inc. (US), and Deep Ocean Mining Co. Ltd (Japan). OMI completed a successful trial mining operation in 1978. Hydraulic pumps, an air lift system, and towed collectors were tested in approximately 4,500 m of water. Approximately 800 t of nodules were recovered.

 

Kennecott consortium (now a division of Rio Tinto) first became seriously interested in seafloor polymetallic nodules in 1962 (Agarwal et al. 1979). In the 1970s, Kennecott developed and tested components and subsystems of a seafloor mining system, and also carried out significant polymetallic nodule metallurgical processing test work.

 

Using a different system to OMI, Ocean Mining Associates recovered approximately 500 t of nodules during its trial mining in the 1970s.

 

Between 1969 and 1974, Deepsea Ventures Inc. carried out 16 survey cruises of three to four weeks’ duration each, to define the extent of the polymetallic nodule deposit discovered by them in 1969 in the CCZ. As reported by Deepsea Ventures Inc:

 

“These activities included the taking of some 294 discrete samples, including the bulk dredging of some 164 tons of manganese nodules from some 263 dredge stations, 28 core stations and three grab sample stations, cutting of some 28 cores, approximately 1000 lineal miles of survey of seafloor recorded by television and still photography, etc. As a result, the deposit of nodules identified with the discovery has been proved to extend generally throughout the entire area (American Society of International Law, 1975).”

 

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Also active in the CCZ was the Ocean Minerals Company (OMCO), comprising Amoco Minerals Co. (United States), Lockheed Missiles and Space Company Inc. (United States), Billiton International Metals BV, and dredging company Bos Kalis Westminster (Netherlands). In a program lasting 16 years, OMCO collected thousands of free-fall grab and box core samples of nodules from its claim area (Spickermann 2012) and carried out trial mining. Lockheed’s design efforts resulted in over 80 patents, a seafloor production system that consisted of a remote-controlled collector and crusher, a seafloor to surface slurry riser system, the first industrial scale dynamic positioning system for a vessel, and a metallurgical processing plant (Spickermann 2012).

 

In 1978, OMCO used a remote controlled fully manoeuvrable self-propelled miner with conveyor and crusher Figure 5.1 and Figure 5.2 to trial mine polymetallic nodules in the CCZ at approximately 4,500 mbsl. The miner used an Archimedes screw drive system to provide traction and accurate manoeuvrability on the seafloor. Nodules were picked up by the miner and transferred to the buffer, where they were to be pumped to the surface by an airlift system.

 

Figure 5.1 Schematic of Lockheed Group’s 1970s trial mining system

 

Source: DeepGreen. Used with permission of Prof. Jin Chung.

 

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Figure 5.2 Remote operated collector used by the Lockheed Group in 1970s trial mining

 

Source: Spickerman 2012.

 

5.3Sampling methods

 

Prior to NORI obtaining its exploration contract, sampling of seafloor nodules within the NORI Area was conducted by three Pioneer Investors; AMR, State Enterprise Yuzmorgeologiya of the Russian Federation and lnteroceanmetal Joint Organisation (IOM), a consortium formed by Bulgaria, Cuba, the Czech Republic, Poland, the Russian Federation, and Slovakia.

 

Nodule samples collected by the Pioneer Investors from within the NORI Area were obtained by free-fall grab samplers (FFG) along with a few from box corers. For each sample the nodule abundance (wet kg/m2) was derived by dividing the weight of recovered nodules by the surface area covered by the open jaws of the sampler or corer (typically 0.25 to 0.5 m2 but in some cases as much as 1 m2). Sample splits were dried and assayed by atomic absorption spectrophotometry (AAS) and X-ray fluorescence (XRF).

 

Free-fall grab samplers are currently the most productive tool available for sampling nodules. This is because a number of them can be deployed at any one time from the survey vessel allowing an order of magnitude increase in collection efficiency compared to box core sampling (i.e., approximately 10 to 20 samples per day for a FFG versus 2 to 3 samples per day for a box core (BC) that is winched to and from the seafloor). Figure 5.3 shows the operation of an FFG sampler.

 

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Figure 5.3 Free fall grab sampler operation

 

Source: ISA 1999b.

 

The box core is the preferred sampling method for retrieving polymetallic samples for resource evaluation and environmental studies. The box core consists of a trigger, plunger, and cutting shovel. Upon land out on the seafloor, the trigger is released which allows the plunger to push a box cutter into the substrate during retraction. Upon retraction, the cutting shovel rotates under the box while cutting into the seafloor and sealing the sample box from below Figure 5.4.

 

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Figure 5.4 Box core sampler operation

 

Source: KC Denmark box corer manual.

 

Comparison of nodule abundance measurements by free-fall grab samplers and box cores suggests that free-fall grab samplers commonly underestimate the actual abundance. This is due to smaller nodules escaping the sampler during ascent and larger nodules around the edge of the sampler being knocked out during the sampling process. Additionally, free-fall grab samplers occasionally fail to return any nodules where nodule abundance is known to be very high because the sampler fails to penetrate the layer of nodules.

 

Lee et al. (2008) examined correction factors between FFG and BC in some detail. They found a wide range but consistent differences with FFG under-reporting compared to BC. They recommended an overall correction factor of 1.4 to convert FFG abundance to BC abundance. However, they acknowledged that any simple factor lacks precision. One of the key issues is the size of the FFG or BC relative to the nodule diameter.

 

No corrections were applied to the NORI Area nodule abundance data.

 

5.4Sample preparation and analysis

 

Information about sample preparation and analysis by the Pioneer Investors is summarised below. Additional information is provided in the Technical Report on NORI Area D, Clarion Clipperton Zone Mineral Resource Estimate, April 2019 (AMC, 2019).

 

5.4.1Ocean Minerals Company

 

While OMCO data are not included in the datasets used for resource estimation in the NORI Area, they are discussed here as the method described below is believed to be similar to the method practised by those contractors that did contribute to the NORI Area data.

 

Polymetallic nodule samples were laid out separately on a white surface marked with a scaled grid and photographed to permit determination of nodule size distribution. They were then sealed in labelled fibreglass-reinforced collection bags and stored in the ship’s hold for the balance of the exploration cruise. The samples were transported from the ship to the Lockheed Ocean Laboratory in San Diego.

 

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Prior to weighing, the samples were removed from the sample bags and placed in a single layer in labelled open trays on tables in the air-conditioned laboratory for at least 12 hours to ensure a uniform degree of air drying. The samples were then weighed using a high-capacity laboratory scale and divided into two subsamples of approximately equal weight.

 

The second subsample was crushed using a jaw crusher to produce a product with a maximum size of less than about 1 mm. The crushed sample was then mixed and passed through a laboratory sample splitter to produce a 5 to 10 g subsample. The subsample was further ground to a fine powder using a laboratory ball mill prior to assaying.

 

The powdered subsample was placed in an oven at 110 °C for at least six hours to remove adsorbed water. It was then immediately transferred to a sealed desiccator to cool to ambient temperature.

 

A three-acid digest was used to dissolve the samples before analysis by AAS using a Hewlett-Packard instrument. Standard analysis included determination of manganese, iron, cobalt, nickel, copper, zinc, silica, calcium, and magnesium.

 

Analytical accuracy was confirmed by periodic introduction of standards made from crushed, mixed, and powdered bulk nodule samples that had also been sent to three independent commercial laboratories for determination of these metal contents. Additional confirmation was achieved using standards formulated by the US Geological Survey (A-1 and P-1; Flanagan and Gottfried 1980). These standards were subjected to the entire preparation procedure to ensure that no significant contamination was occurring and that no systematic analytical errors were being included in the process.

 

5.4.2Yuzhmorgeologiya

 

The Yuzhmorgeologiya method was very similar to the method practiced by OMCO. The Yuzhmorgeologiya data cover NORI Area A and B.

 

The measurement of abundance of nodules at the sample site was carried out using an “enclosed” Ocean-0.25 FFG sampler with a 0.25 m2 gripped surface and a depth of sampling of approximately 30 cm. The FFG sampler was combined with GFU-6-8 photography unit. This device took ocean bottom photos at the sampling point.

 

The procedure for sub-sampling was as follows:

 

1.Extraction of all nodules from the grab sampler.
2.Crushing of all nodules to a maximum particle size of up to 10 mm.
3.Drying (approximately 24 h) of all samples at 105°C until constant weight was achieved.
4.Crushing of all samples to 1 to 2 mm particle size and splitting of 400 to 500 g using a splitting device.
5.Pulverising of the split sample (not less than 400 g) was carried out in the vibrating grinder up to 100 mesh particle size (0.074 mm).
6.Formation of analytical sample (200 g) and its duplicate (200 g).

 

Chemical analyses were carried out on subsamples with an approximate weight of 0.5 g, selected from the analytical sample. Determination of nickel, copper, cobalt, and iron content was carried out by AAS and the content of manganese by a method of photometric (electrometric) titration.

 

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5.4.3IOM

 

Information regarding IOM procedures is not currently available. However, the procedures used by IOM for sample collection and assaying are likely to be similar to the sampling and assaying procedures used by the other Pioneer Investors. The results of the IOM sampling are consistent with the results obtained by other Pioneer Investors within the NORI area and within the broader CCZ.

 

5.4.4Preussag

 

Preussag completed polymetallic nodule exploration programs in the CCZ aboard the Valdivia in the 1970s. Nodule sampling was mainly carried out using free-fall grab samplers and box corers.

 

After the sampling devices arrived on the working deck of the research vessel, the nodules were removed from the sediment surface (box corer) or taken from the FFG samplers and transported in plastic boxes into the geological laboratory. There, several sample treatments were carried out:

 

Nodules were cleaned (if necessary) from adhering mud using filtered seawater.
Nodules were carefully dried with paper towels.
Nodules were photographed on a surface with a scaled grid.
Individual nodules were measured.
Individual nodules and the total nodules from one device were weighed with a special balance (determination of wet weight).

 

A detailed description including the identification of the types of nodules was conducted.

 

One part of the nodules was used for further investigations in the ship’s laboratory. The other nodules were stored in plastic bags, which were weighed once more. Then the plastic bags were filled with seawater in order to keep the nodules in a water-saturated state. These samples were required for further studies and investigations in the home laboratories (e.g., physical properties, detailed chemical analyses, X-ray phase analysis, metallurgical tests, polished sections).

 

The first part of the nodules taken from one sampling device were crushed to a particle size smaller than 10 mm and then dried in an oven at ±105 °C until constant weight was achieved. Further steps of grinding in the ship’s laboratory took place with a final procedure of pulverising with a ball mill producing a fine powder with a particle size of less than 100 mesh (less than 74 µm). Then the sample was passed through a laboratory sample splitter to produce several representative subsamples.

 

One subsample was taken as representative archive sample. Two other subsamples were dried again for at least five hours to remove the rest of adsorbed water prior to analysis.

 

Two methods were used to determine the key metals nickel, copper, cobalt, manganese, iron, and zinc. The first one was the AAS analysis to measure nickel, copper, zinc, and cobalt, and the second was the energy-dispersive XRF method with ratio-isotope excitation to determine manganese and iron. A sample digestion was necessary to carry out the AAS determination. For this, the dried powder was treated with a mixture of acids in a high-pressure Teflon vessel and heated for several hours to complete the digestion. The digested fluid was diluted with distilled water and analysed with the spectrometer, and the residue was weighed. The XRF analysis was performed with the powder (pressed tablets). Data quality and analytical reliability were confirmed by intermediate introduction and measurement of reference nodule samples. These reference standards consisted of powdered material which was subjected to the same procedure as described above.

 

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5.5QA/QC procedures

 

Free-fall grab samplers are considered to underestimate the actual abundance but provide adequate samples for determining the grade of the nodules (Hennigar et al. 1986).

 

QA/QC was known to be undertaken at the time of sampling as part of the scientific process used by each Pioneer Investor. However, no systematic quality assurance and quality control (QA/QC) information is available for these programs, as this information was not provided by the ISA. Nonetheless, the acceptance of the data by the ISA suggests the ISA was satisfied with the quality of the data.

 

The quality of the data was assessed (Golder 2015) using comparative measures between the different datasets (Section 9.1.2). The correlation of data from different sources, including Pioneer Investors and government scientific institutes, provides a satisfactory level of quality assurance to support Mineral Resource estimates at an Inferred level of confidence.

 

5.6Pioneer Investor sample data supplied to NORI

 

Upon making an application, the Pioneer Investors were required to submit sufficient data and information to enable designation of a reserved area based on the estimated commercial value. These sample data provide the basis of a database held by the ISA and were used initially to define the areas of the NORI application.

 

The sample sites were sampled by a combination of grab samplers and box corers of different sizes and designs, with the full details of the sampling tools at a given site mostly being unavailable. As a result, sample quality, spacing, and assay reliability vary from contractor to contractor, sample to sample, and block to block. Average sample spacing (based on the data supplied by the ISA) varies across the CCZ, ranging from less than 1 km and averaging approximately 10 km within the NORI Area.

 

Statistics for the samples that contain both abundance and grade data inside the NORI Area are tabulated in Table 5.1 and illustrated as boxplots in Figure 5.5. The box plots show the range of grades; the box represents the range of grades in the middle 50% of the samples, centred on the median (middle value) and box width reflects number of samples. The dashed lines represent the range of the lowest 25% and highest 25% of the data.

 

Cobalt in NORI Area D is significantly lower than the other NORI areas, however, abundance is consistently higher in NORI Area D than the other NORI areas and the CCZ Reserved Blocks in general Figure 5.5.

 

The range of the assays (as summarized by the coefficient of variation) is remarkably low compared to most terrestrial Mineral Resources. Abundance values vary more widely, making abundance estimates the key variable of uncertainty in Mineral Resource estimation.

 

The abundance of buried nodules is poorly known at this time. Thus, buried nodules are not included in exploration information or Mineral Resource estimates.

 

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Table 5.1 Summary of historical FFG samples in the NORI Area

 

NORI Area Grade Number Missing Min Max Mean Median Var cv
A Abundance (wet kg/m2) 50 0 0 28.7 9.3 8.2 57.366 0.81
Ni (%) 40 10 1.04 1.75 1.37 1.39 0.016 0.09
Cu (%) 40 10 0.66 1.29 1.07 1.1 0.017 0.12
Mn (%) 40 10 19.77 32.6 28.06 28.98 8.577 0.1
Co (%) 40 10 0.16 0.28 0.22 0.22 0.001 0.11
B Abundance (wet kg/m2) 31 0 0 25.55 11.24 12 50.536 0.63
Ni (%) 26 5 1.01 1.61 1.42 1.44 0.021 0.1
Cu (%) 26 5 0.72 1.26 1.12 1.16 0.016 0.11
Mn (%) 26 5 20.8 32.2 28.88 29.8 9.939 0.11
Co (%) 26 5 0.21 0.31 0.25 0.25 0.001 0.09
C Abundance (wet kg/m2) 152 0 0 44.1 10.55 10.33 52.902 0.69
Ni (%) 135 17 0.68 1.53 1.27 1.31 0.025 0.12
Cu (%) 135 17 0.4 1.46 1.05 1.11 0.048 0.21
Mn (%) 135 17 12.84 33.54 28.63 29.42 11.648 0.12
Co (%) 135 17 0.12 0.33 0.21 0.21 0.001 0.17
D Abundance (wet kg/m2) 159 0 0.2 52.2 14.12 13.9 72.243 0.6
Ni (%) 159 0 1.09 1.41 1.28 1.29 0.004 0.05
Cu (%) 159 0 0.88 1.5 1.14 1.13 0.012 0.1
Mn (%) 159 0 23.8 33.9 30.58 31 3.12 0.06
Co (%) 159 0 0.05 0.2 0.12 0.11 0.001 0.26

Notes: Var = variance; CV = coefficient of variation.

 

Figure 5.5 Box plots of sample grades within the NORI Area compared with all other data from the Reserved Blocks

 

Note: Box size represents 1st and 3rd quartiles centred on the median and box width reflects number of samples.

 

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6Geological setting and mineralisation

 

6.1Global distribution of nodules

 

Seafloor polymetallic nodules occur in all oceans, and the CCZ hosts a relatively high abundance of nodules. Other relatively dense zones are found in the Peru Basin in the southeast Pacific, the centre of the north Indian Ocean, and the Cook Islands Figure 6.1.

 

Figure 6.1 Schematic diagram of average abundance of polymetallic nodules in four major locations

 

Source: GRID-Arendal 2014b.

 

6.2Tectonic setting and topographic features

 

The CCZ is defined by two major west-south-west and east-north-east trending fracture zones running through the seafloor; the Clipperton Fracture Zone to the south and the Clarion Fracture Zone to the north. These fractures zones can be seen clearly on the bathymetric map Figure 6.2. The eastern and western limits can be defined by the Mathematicians Seamounts or Ridge in the east, and the Republic of Kiribati or Line Islands in the west.

 

The CCZ seafloor forms part of the Abyssal Plains, which are the largest physiographic province on Earth, covering some 70% of the area of ocean basins and 30% of the Earth’s surface (ISA 2004). The Abyssal Plains are traversed by ridges, believed to have formed from the process of seafloor spreading. Orientation is north-north-west to south-south-east (locally ±20˚), with amplitude of 50–300 m (maximum 1,000 m; Hoffert 2008) and wavelength of 1 to 10 km. The bathymetric map of NORI Area D Figure 7.1, shows these ridges clearly. The Abyssal Plains are punctuated by extinct volcanoes rising 500 to 2,000 m above the seafloor.

 

Depth increases from 3,800 to 4,200 m at 115˚ west to 4,800 to 5,200 m at 130˚ west, and 5,400 to 5,600 m at 145˚ west.

 

The sediment types exhibit trends perpendicular to the fracture zones, from predominant carbonate sediments in the south-eastern extreme to predominant siliceous red clay in the west north-west.

 

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Figure 6.2 Bathymetric map of the Clarion-Clipperton Fracture Zone

 

 

Source: ISA 2010.

 

6.2.1Sedimentation and nodule formation

 

Seafloor polymetallic nodules are composed of nuclei and concentric layers of iron and manganese hydroxides and formed by precipitation of metals from seawater. The metal accumulation rates are slow, and it generally takes millions of years to form a nodule (ISA 2004).

 

Nodules are abundant in abyssal areas with oxygenated bottom waters, low sedimentation rates (less than 10 cm per thousand years), and where sources of abundant nuclei occur (Hein et al. 2013). Nodules grow on 0.1 to 1 cm nuclei (e.g., pieces of pumice and older broken nodules) and generally range from about 1 to 12 cm in their longest dimension, with the low to middle-range typically the most common (1 to 5 cm).

 

The specific conditions of the CCZ (water depth, latitude, and seafloor sediment type) are considered to be the key controls for its formation, along with the following factors:

 

Supply of metals to the growing surface.
Presence of a nucleus.
The corrosive / erosive forces caused by benthic currents.
Occurrence of semi-liquid surface layer on the seafloor (sediment water interface).
Bioturbation.

 

The highest values of metals in nodules are thought to be best developed on the seabed in the equatorial regions away from land sources of sediments. In these regions surface waters have high primary productivity. Tiny plants and animals concentrate the metals from seawater and when they die, they sink to the seafloor, dissolve, and release the metals into the pore water of seafloor sediments. It is believed that the upper portion of the nodules accumulate metals that are precipitated from seawater, while the lower portion of the nodules, partially buried in sediment, accumulate metals from pore-water in the underlying sediments.

 

Sediments from the CCZ consist mostly of clays and siliceous biological casts. Sands and larger sediments are not generally found so far from land, and the commonly formed carbonate biological casts dissolve on the seabed in these deep-water regions faster than they accumulate.

 

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6.3Polymetallic mineralisation

 

6.3.1Nodule grades

 

Nodule chemistry varies only slightly with in the CCZ. Figure 6.3 shows that there is a general increase in combined cobalt, nickel and copper grades towards the south-east (Kazmin in ISA 2003; ISA 2010; Morgan 2009). The reason for this is not clear but may relate to proximity to metal sources from the East Pacific Rise or the American continents.

 

Average (mean) grades for elements of interest other than nickel, manganese, copper, and cobalt from 248 samples of nodules taken within the NORI area during the NORI 2018 and 2019 off-shore exploration campaigns are summarised as:

 

Other base or alloy metals such as zinc (0.21% ZnO), titanium (0.43% TiO2), and lead (0.03% PbO).
Rare earth and other transition metals such as strontium (0.071% Sr), yttrium (0.009% Y), zirconium (0.033% Zr), lanthanum (0.011% La), cerium (0.022% Ce), and neodymium (0.013% Nd).
Other elements such as iron (6.6% Fe), magnesium (3.2% MgO), aluminium (3.95% Al2O3), sulphur (0.28% SO3), calcium (2.4% CaO), potassium (1.1% K2O), sodium (2.9% Na2O), phosphorus (0.36% P2O5), vanadium (0.049% V), and barium (0.43% Ba).

 

Analysis of 20 samples collected by NORI in 2012 showed that arsenic content is low (0.008% As).

 

6.3.2Nodule abundance

 

Polymetallic nodules lie on the seafloor sediment, often partly buried. Some nodules are completely buried, although the frequencies of such subsurface occurrences are very poorly defined. Kotlinski and Stoyanova (2006) document up to five discrete layers of buried nodules, although all were within 45 cm of the surface despite using sediment cores of 250 to 380 cm depth (i.e., all of these nodules are near surface). Other images of box corers also suggest that all or most of the nodules are at the surface. Consequently, drilling is not required for definition of the Mineral Resources.

 

During the 2018 NORI campaign, 91% of nodules sampled were situated at surface. These include nodules on the surface and nodules with their top surfaces in the upper 1 cm of sediment. A few nodules were found at depth; most of these were usually clustered around the edges of the box core and are considered to have been pushed below surface by the box coring process. Significant nodule abundance below surface was only recorded in one out of 45 samples.

 

The nodules vary in abundance, in some cases touching one another and covering more than 70% of the seafloor. They can occur at any depth, but the highest concentrations have been found on abyssal plains between 4,000 and 6,000 mbsl.

 

Figure 6.4 shows estimated nodule abundance data from the ISA Geological model project. Data analysis in Section 9 shows that nodule abundance variability is significantly higher than metal grades, suggesting that abundance estimation will be the key variable in Mineral Resource estimation.

 

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Figure 6.3 Results from ISA Geological Model Project in the CCZ - combined cobalt, nickel, and copper grades

 

Note: The German data for NORI Area D were not included in the ISA Geological Model.

Source: provided by the ISA directly to NORI in 2008.

 

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Figure 6.4 Results from the ISA Geological model project in the CCZ estimated nodule abundance

 

Note: The German data for NORI Area D were not included in the ISA Geological Model.

Source: ISA 2008.

 

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6.4Seafloor polymetallic nodule facies

 

Three broad classes of nodule distribution on the seafloor were identified, based on camera imagery. They are summarised in Figure 6.5.

 

Figure 6.5 Polymetallic nodule facies in NORI Area D

 

Nodule camera facies type Description Example
Type 1 densely packed / interconnected

>50% nodules

~1–10 cm, uncertain.

Low to moderate confidence in camera imagery to resolve individual nodules

Type 2 mostly

individual / locally interconnected

~20–40% Nodules

~5–20 cm

Moderate to high confidence in camera imagery to resolve individual nodules

Type 3 mostly

Individual / sparse

10–20% nodules

~5–20 cm

Moderate to high confidence in camera imagery to resolve individual nodules

Other Volcanic outcrop - associated with NW-SE ridges

 

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Type 1 nodule facies (distribution pattern) is typically characterised by >50% nodules (by area of coverage). The majority of these nodules are typically medium-sized and are closely packed, with many nodules in contact with their neighbours.

 

Types 2 and 3 are characterised by lower nodule abundance, larger nodules, and the nodules are typically separated (i.e., there are noticeable sediment gaps between individual nodules).

 

Facies boundaries are often well-defined (i.e., not gradational) and variable over short distances (<100 m), as illustrated in Figure 6.6.

 

Figure 6.6 Camera imagery showing change from Type 3 nodules (left), to Type 2 (right)

 

 

Nodule distributions can be mapped by measuring the backscatter (return signal) from multi-beam echo sounding (MBES) from vessels on the ocean surface. Type 1 nodule facies correlates with moderate-amplitude backscatter areas and is the most common facies. Type 2 and 3 nodule facies typically correlate with higher-amplitude backscatter areas. These correlations are shown in Figure 6.7 which shows nodule classification according to photographic traversing by autonomous underwater vehicle (AUV) (ribbon-track coloured: Type1 (green), Type 2 (yellow), Type 3 (red)) against a background of backscatter data. The backscatter responses are coloured by amplitude; high-amplitude areas associated with Type 2 and 3 nodule facies shown in warmer colours, with Type 1 represented by colder colours.

 

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Figure 6.7 Map of nodule facies classification in NORI Area D

 

 

Note: Box core locations are labelled with box core number and coloured by abundance. Ribbon-track coloured by facies Type: Type1 (green), Type 2 (yellow), Type 3 (red)) against a background of backscatter data. The backscatter responses are coloured by amplitude; high-amplitude areas associated with Type 2 and 3 nodule facies shown in warmer colours, with Type 1 represented by colder colours.

 

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6.5Topographic / bathymetric facies

 

Based on analysis of bathymetric data from the 2012 and 2018 campaigns, together with the significant sampling data acquired during 2019, it was possible to refine the geological domain interpretations which characterise nodule prospectivity. Eight domains were interpreted for NORI Area D:

 

1.Abyssal plains – These constitute the majority of NORI Area D and are characterised by gentle slopes of 0˚ to 6˚, and nodules lying on soft sediment. Nodules were observed to be ubiquitous in this domain wherever it was surveyed and sampled. It is considered a highly- prospective domain for nodules.

 

The Abyssal Plains can be further divided into three sub-domains based on backscatter acoustic response and ground-truthing (box core samples and land-out video footage):

 

Areas considered indicative of Type 2 and 3 nodule facies, as determined from backscatter correlation (17% area coverage).
Sediment drift domains - characterised by a soft sediment ooze with low acoustic backscatter, and extremely low to no nodule abundance (1% area coverage).
Volcanic cones (see below) (4% area coverage).
The remaining area (78%) is likely indicative of Type 1 nodule facies and considered highly prospective.

 

2.Abyssal Hills – These are topographically higher features, oriented NNW-SSE, and are parallel to one another. Slopes of the hills are mostly gentle at the western side, while they are very steep at the eastern side, likely representing horsts bounded by inward-dipping normal faults and outward-dipping volcanic growth faults respectively.

 

3.Abyssal Hills (hard) – Abyssal Hills where the hill crests are associated with the occurrence of hardgrounds, caused by proximity of underlying (harder) Neogene footwall succession at seafloor, typically covered by a very thin veneer of unconsolidated sediment.

 

4.Slopes ³ – These are associated with the flanks of Abyssal Hills, where the slope is 6° or greater, and are likely associated with hardgrounds and/or volcanic debris and volcanic outcrop development typically associated with NNW trending faults. These steep slopes are considered to have low nodule prospectivity but have not been fully tested with sampling or photography.

 

5.Slopes ³ 6° (hard) – These are associated with the flanks of Abyssal Hills where the slope is 6˚ or greater, and are associated with hardground development, typified by outcropping (harder) Neogene footwall succession. These steep slopes are considered to have low nodule prospectivity, based on box core sampling, AUV SBP data and photography.

 

6.Volcanic Outcrop – This is associated with volcanic growth-faults along the Abyssal Hill flanks, which trend NNW-SSE, and are elongated, narrow bodies mapped through integration of AUV SBP and camera data with EM 122 MBES data backscatter data.

 

7.Volcanic Cones – These are typically grouped in chains and follow the ‘Hawaiian Trend’. Some of these features could be classed as Knolls, as they exhibit a 500–1000 m rise from the seafloor. These are isolated features and were not sampled during the 2018 or 2019 NORI Campaigns. However, because of their volcanic origin, steep slopes (>6˚) and dominant high-intensity backscatter (typically associated with volcanic outcrop), they are also considered to have low nodule prospectivity.

 

8.Volcanic High – This is a macro-scale topographic feature situated in the SE corner of NORI Area D. It is interpreted as a relic volcanic intersection high, which also includes a relic transform parallel trough. Both are volcanic related features associated with the Clipperton transform zone, situated to the south of NORI Area D.

 

These domains are described further in Section 11.2.

 

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6.6Nodule morphology and formation

 

A variety of nodule classification systems have been used in previous studies of the CCZ (for example, Haynes et al. 1985), but the three-class system promoted by the ISA (ISA 2010) prevails today Figure 6.8. Nodules are classified according to their texture, as:

 

S-type (smooth type)

 

R-type (rough type)
S-R-type (smooth-rough mixed type)

 

It is postulated that the different textures are related to the position of the growing nodule, relative to the seafloor, as shown in Figure 6.8.

 

Figure 6.8 Polymetallic nodule types (ISA 2010)

 

Source: ISA 2010.

 

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7Exploration

 

NORI completed off-shore exploration campaigns in July–August 2012, in 2013, May 2018, August to December 2019.

 

7.1NORI 2012 campaign

 

The RV Mt. Mitchell, which sailed from the port of Seattle, was used for the NORI 2012 campaign. NORI conducted bathymetric mapping of the seafloor within NORI Area C and D, as well as bulk nodule sampling for metallurgical test work. Due to the nature of the bulk sampling, these samples are not suitable for use in Mineral Resource estimation.

 

Using a hull-mounted Kongsberg Simrad EM120 12 kHz, full-ocean depth multibeam system, approximately 25,720 km2 was surveyed in NORI Area C and approximately 25,439 km2 in NORI Area D. Due to swath width and vessel orientation relative to course-made-good, some data were recorded beyond the bounds of those areas. Approximately 69.1% of Area C (25,720 km2) was surveyed. Area D was surveyed in its entirety (25,439 km2). An image of the bathymetric data for NORI Area D, in plan view, is shown in Figure 7.1.

 

Figure 7.1 NORI Area D bathymetry data

 

Note: The canted box is a result of projecting a large geographic area bounds (given in latitude / longitude format) into UTM 10 N, WGS 84.

 

MBES data was processed during the 2012 NORI Campaign and used to locate areas of high nodule density for dredge sampling, based on the bathymetric surfaces and the backscatter intensities. Overall, the geophysical interpretation of the multibeam data was remarkably successful.

 

Bulk samples were collected by dredging from NORI Area C (five dredge deployments) and NORI Area D (28 dredge deployments). Approximately 280 kilograms (kg) of nodules were recovered from Area C and approximately 4,500 kg from NORI Area D. Video footage was also obtained during dredge deployments and, together with the samples recovered, provided physical verification of nodules within NORI Area C and D Figure 7.2.

 

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Twenty (20) nodule samples (two (2) from Area C and 18 from Area D) recovered during the NORI 2012 campaign were assayed. Each sample for assaying, was a subsample of an FFG sample and weighed approximately 1 kg. Results of assaying indicated a mean grade of 1.20% nickel, 1.03% copper, 27.9% manganese, and 0.13% cobalt. These mean values are consistent with the mean grades derived from the historical grab samples within NORI Area C and D see Table 7.1. The cobalt value of 0.13% confirms the cobalt grades in the German data in Area D. A large suite of additional elements was also assayed. A drying test undertaken on a nodule sample collected during the NORI 2012 campaign indicated moisture loss of 24% at 120 °C.

 

Figure 7.2 Subset of nodule samples recovered during NORI’s 2012 exploration campaign

 

 

7.2NORI 2013 campaign

 

In 2013, NORI carried out a second exploration campaign within NORI Area A and B. This campaign was also undertaken using RV Mt. Mitchell and focused mapping bathymetry in NORI Area A and B, identifying nodule fields based on acoustic data (including interpretation of backscatter data), and recovering bulk polymetallic nodule samples.

 

A hull-mounted Kongsberg Simrad EM120 12 kHz, full-ocean depth multibeam system was used to survey approximately 8,924 km2 in NORI Area A and approximately 2,911 km2 in NORI Area B. The Applanix Pos MV 320 V4 system was used to measure vessel position and attitude, and a dual Trimble Zephyr unit was used as the Global Positioning System (GPS) system.

 

Dredging for bulk nodule sampling was carried out using an epibenthic sled Figure 7.3 that was designed specifically by KC-Denmark Research Equipment for seafloor polymetallic nodules sampling. The dredge in Area A was deployed at 12° 10.2‘N, 134° 11.1‘W. The dredge in NORI Area B was deployed at 13° 43.5‘N, 133° 35.9‘W. Approximately 190 kg of nodules were recovered from NORI Area A Figure 7.4 and approximately 85 kg of nodules were recovered from NORI Area B.

 

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Figure 7.3 Photos showing the operation of the epibenthic sled collecting nodules during the NORI 2013 campaign

 

 

After each dredge, the nodules were retrieved from the epibenthic sled on the deck of the ship. They were collected in bags and numbered. Each dredge sample was sub-sampled for laboratory analysis using a simple random scoop sampling to obtain two 2 kg samples. During the scooping the size distribution was also considered.

 

Figure 7.4 Photos of nodules collected from NORI Area A during the NORI 2013 campaign

 

 

The four sub-samples from NORI Area A and B were sent to ALS Laboratories in Brisbane for preparation and analysis. The samples were dried at 120 C for 12 hours then assayed using a four-acid digest specifically designed for high-manganese samples, followed by AAS (method Mn-AA62) and four-acid digest followed by ICP-MS for concentrates (ME-MS61c). The Mn-AA62 method has a claimed precision of ±5%. The results for cobalt, copper, iron, manganese, molybdenum, and nickel are included in Table 7.2, and the calculation of weight loss after drying at 120 C for 12 hours (average 28.7%) is included in Table 7.2.

 

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Table 7.1 Assay results for NORI Area A and B nodule samples

 

ALS assay method

code sample

ME-MS61c

Co (ppm)

ME-MS61c

Cu (ppm)

ME-MS61c

Fe (%)

Mn-AA62

Mn (%)

ME-MS61c

Mo (ppm)

ME-MS61c

Ni (ppm)

NA1 2,250 10,800 5.27 29.0 589 13,600
NA2 2,240 11’ 150 5.06 28.9 545 13,400
NB1 2,490 11,550 5.62 29.2 601 13,800
NB2 2,490 11’ 100 5.60 28.2 590 13,750

ALS = ALS Laboratory Group; Co = cobalt; Cu = copper; Fe = iron; Mn = manganese; Mo = molybdenum; Ni = nickel; ppm = parts per million; % = percent.

 

Table 7.2 Weight loss of samples after drying

 

Sample Wet weight (g) Dry weight (g) Loss (%)
NA1 536.8 374.3 30.3
NA2 574.3 396.0 31.0
NB1 616.1 452.5 26.6
NB2 588.3 431.5 26.7

 

7.3NORI 2018 campaign

 

7.3.1Objectives and approach

 

During April to June 2018, NORI conducted a successful survey and seabed sampling program in NORI Area D using the OSV Maersk Launcher, mobilising out of San Diego (Campaign 3). The work completed is summarised below. Additional information is provided in the Technical Report on NORI Area D, Clarion Clipperton Zone Mineral Resource Estimate, April 2019 (AMC, 2019).

 

The key objectives of this program were to conduct detailed bathymetric, sonar imaging – MBES backscatter, Side Scan Sonar (SSS), and photogrammetry surveys to help facilitate:

 

Identification and selection of enough suitable ground for trials of a collector (the Collector Test).
Provision of sufficient geological and geotechnical detail to ensure future sampling and Collector Test activities recovery efficiencies can be measured, and that sampling and Collector Test programs are appropriately designed.
Provision of appropriate seafloor imagery to assist with selection of suitable environmental monitoring sites – particularly for physical oceanographic mooring studies.
Identification of smaller environmental baseline reference zones. An important consideration is that the habitats of these reference sites are similar in character to the site that will be selected for the Collector Test.
Demonstration of the methodology to upgrade resource confidence from Inferred to Indicated and Measured categories.

 

Fugro provided turnkey survey and seabed sampling support for the campaign, including:

 

AUV operational support
Hydrographic survey support.
Data processing.
Geoscience support for AUV survey (data compilation and preliminary data analysis).
Geoscience support for box coring operations (core logging, nodule processing, geotechnical testing).

 

Biological sampling support was provided by ERIAS Group environmental consultants.

 

Data QA/QC, survey design and data interpretation were undertaken by Margin – Marine Geoscience Innovation, as a Client Representative on behalf of NORI.

 

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MBES backscatter data from the 2012 MV Mt Mitchell vessel-based MBES survey was reprocessed using the time-series data. This greatly improved the image quality Figure 7.5 compared to the original beam-averaged data and enabled geological interpretations of the data to be refined. These interpretations provided the foundation for the selection of candidate Collector Test-site targets for follow-up detailed survey by AUV.

 

Figure 7.5 Reprocessed EM122 backscatter data from NORI Area D 2012 survey

 

Note: NB – areas designated for AUV detailed survey are shown outlined in red, constituting targets deemed to have high-nodule potential and characterised by dominantly flat-lying topography.

 

7.3.2AUV survey

 

AUV survey methods were identified as the best technological-fit for follow-up investigation at a site-survey scale. An AUV has the capability to provide co-registered multi-sensor datasets at the appropriate resolutions necessary to confidently select the most suitable site for a Collector Trial and provide a framework on which to build associated ongoing engineering and environmental studies.

 

Fugro’s ESVII 4500 m-rated Kongsberg Hugin AUV was used to conduct the detailed survey work, utilising an MBES, Side Scan Sonar (SSS), Sub-Bottom Profiler (SBP) and camera payload Figure 7.6. The AUV typically navigates using a combination of Inertial Navigation System (INS) housed within the AUV and an acoustic navigation system (Kongsberg HiPAP 501 Ultra Short Base Line (USBL) system) communicating between the AUV and the support vessel. The USBL acoustically tethers the AUV to the support vessel, which follows the AUV during its survey and provides the AUV with navigation corrections to counteract drift in the INS system over time. This mode of operation was used for all reconnaissance mapping with the AUV. For survey of the Collector Test Site, the AUV was positioned within an array of transponders positioned on the seafloor – termed a UTP (Underwater Transponder Protocol) array. This enabled the AUV to be left unaided by the support vessel to compete its survey, whilst the support vessel conducted other work within the exploration license area.

 

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Figure 7.6 Deployment ESVII Kongsberg Hugin AUV from the stern of the Maersk Launcher

 

Source: J. Croucher.

 

There were four main AUV survey focus areas:

 

Reconnaissance lines were collected at a 35 m AUV altitude in order to assess geological and near-surface conditions prior to acquiring low-altitude camera data. These data were also used to select the Collector Test Site location and to assess the designated Preservation Reference Zones within the NORI Area D tenement.
Camera lines were run at a 6 m AUV altitude in order to map the distribution and abundance of the nodules. These data were also used to select the Collector Test Site location.
Within the Collector Test Site, data were collected at a 22 m altitude and were used to evaluate geologic and near-surface conditions for future Collector Test activities.
Within the mooring sites, data were collected at a 90 m altitude and were used to evaluate geologic and near-surface conditions for future mooring locations.

 

Initial reconnaissance AUV traverses were conducted over the candidate Collector Test Site Figure 7.7 using MBES, SSS and SBP payloads to provide confirmation of topographic and geological features observed in the 2012 vessel-based MBES dataset, but at a higher level of detail and confidence. There was an excellent correlation between the AUV bathymetric data and that collected by hull-based multibeam methods in 2012, providing confidence in both sets of results. These traverses were then followed-up with low-altitude surveys using the AUV’s camera payload to provide visual confirmation of nodule distribution.

 

The reconnaissance traverses were also designed in such as manner as to provide information on nodule continuity (through acquisition of sonar and camera data) between proposed sampling sites on a 7 km rectilinear sampling grid. A key component to the success of the campaign was the ability to conduct box coring simultaneously with the detailed survey by AUV of the selected Collector Test Site, through use of the UTP seafloor acoustic positioning array.

 

A total of 2286 line km of data was acquired with the AUV, covering an area of approximately 375 km2 of seafloor. A summary of data types and associated data resolutions collected by the AUV during the 2018 NORI campaign is presented in Table 7.3.

 

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Figure 7.7 AUV geosurvey data acquired during the 2018 NORI campaign

 

 

All data acquired by the AUV was processed onboard the vessel to a level where preliminary interpretation could be made on the data by the Fugro Geoscience team and NORI Client Representative onboard. This was key in enabling on-site decision making for follow-up survey optimisation, particularly with regards to selecting the most suitable Collector Test Site.

 

Table 7.3 Summary of data types collected by the AUV during the 2018 NORI campaign

 

AUV altitude Survey area
90 m 35 m 22 m 6 m
Sensor Data item Details MSS
(NE)
MSS
(NW)
DSAO Recon
PRZ
(NE)
Recon
PRZ
(NW)
Test
mine
site
CHP Camera
PRZ
(NW)
MBES Bathy Bin size 3 m 3 m 1 m 50 cm 50 cm 27 cm 15 cm 15 cm
Backscatter Bin size 3 m 3 m 1 m 50 cm 50 cm 15 cm 15 cm 15 cm
Side scan sonar SSL Bin size 50 cm 50 cm 50 cm 25 cm 25 cm 27 cm N/A N/A
SSH Bin size N/A N/A 50 cm 25 cm 25 cm 15 cm N/A N/A
SSX Bin size N/A N/A N/A N/A N/A N/A 7 cm 7 cm
Camera Orthos Bin size N/A N/A N/A N/A N/A N/A 3 mm 3 mm
Sub bottom profiler Sub bottom Frequency N/A N/A 1-10 khz 1-10 khz 1-10 khz 1-10 khz 3.5-20.5 khz 3.5-20.5 khz

Note: MBES operated at 200 or 400 kHz, depending on survey resolution requirements. SSS was operated at 240 kHz, 540 kHz, or 1,600 kHz.

 

7.3.3Box coring

 

Box coring was undertaken using a 0.75 m2 box corer built by K.C. Denmark A/S, deployed from a H-frame situated amidships of the Maersk Launcher Figure 7.8.

 

A total of 45 box cores were acquired during the campaign. All box cores were acquired within the detailed survey area on a 7 km square grid Figure 7.9. The sampling grid was designed prior to the mobilisation of the 2018 NORI campaign; therefore, the samples were selected without reference to any of the detailed geophysical data to avoid any bias.

 

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Each box core site was located by positioning the vessel over the proposed box core location and acoustically monitoring the box core’s position during descent using the vessel’s USBL system communicating with a USBL transponder attached to the box core frame. Once the box core was lowered to approximately 30 m above the seafloor, the surveyor monitored when it was within a 35 m target circle displayed over the proposed target location on the USBL navigation workstation monitor. Once this condition was met, the instruction was given to lower the box core to bottom. Once on bottom a series of position fixes were acquired to solve the on-bottom position. The mean distance between the proposed target location and actual box core position was 18.4 m ±7.9 m.

 

It is important to note that the hydrographic surveyors guiding the landing out of box cores were only supplied the expected seafloor datum at the proposed core site location. They did not have access to any geophysical data (backscatter, SSS or camera etc.) during these operations. This ensured that the sampling was conducted without any bias.

 

Once the position fix was taken, the cutting shovel was released to seal and secure the sample and the box corer was winched up off the seafloor. Once the sample was secured on deck, the samples follow three processing paths - environmental, geotechnical, and mineralogy.

 

A stand-alone GoPro camera system in a pressure-rated underwater housing and LED lights were attached to the legs of the box corer. This enabled post-recovery analysis of land-outs to be made and comparison of actual box core nodule recovery and in-situ nodule distribution on seafloor.

 

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Figure 7.8 KC Denmark 0.75 m² box corer

 

Note: Insert top right shows USBL beacon (circled top) and GoPro camera and lighting system (circled bottom).

Source: H. Hughes.

 

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Figure 7.9 Box core locations for 2018 NORI campaign shown by green circles with black centre-dot

 

Note: Historical sampling shown by stars. NORI 2018 campaign AUV geosurvey traverses shown in blue.

 

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Figure 7.10 shows a sequence of box core land-out footage from the GoPro camera. The top image shows the land out site visual as box core is deployed to seafloor. The middle image shows the box corer in situ on seafloor, before sample is taken (shovel open). The bottom image shows the box corer retracting from seafloor following successful closure of shovel. Loss of the laser-scale early in the campaign meant that nodule measurements could not be accurately measured from the GoPro images.

 

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Figure 7.10 Sequence of box core land-out footage from GoPro camera

 

 

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7.3.3.1Sample processing

 

All samples were processed onboard post-retrieval of a box core sample to deck Figure 7.11. The vessel was equipped with a biology cold laboratory and geoscience laboratory.

 

Once the box core was landed out on deck and safely secured, the box was separated from the box corer frame. Three processing protocols for environmental, geotechnical, and resource began immediately after collection of each box core. The processing flow on deck was undertaken in the following sequence:

 

The top of the sample with the supernatant water still in situ was photographed.
The water was then carefully siphoned, bailed and / or suctioned off the sample and processed for biological analysis by the biological team onboard.
The undisturbed surface of the retrieved material (nodule surface) was photographed.
A 50 × 50 cm area of the retrieved material was cordoned for biological study.
Three sub-samples were obtained from the undisturbed areas outside of the biology exclusion area for geotechnical purposes. All nodules except for possible buried nodules captured in the 2.638-inch push samples followed the Mineral Resource processing path.
All surface nodules, when extracted from the box, proceeded to the biology wet laboratory where they were washed with cold seawater through a sieve.
All buried nodules in the 50 × 50 cm area reserved for biologic sampling also proceeded to the biology wet laboratory. After washing, these nodules were returned to the geology wet laboratory.
All buried nodules outside of the area of biologic investigation were washed of mud on deck and proceeded to the geology wet laboratory for description, measurement, photography, and sequestration in sample bags within gasket sealed pails.

 

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Figure 7.11 On deck sample processing

 

 

Notes:

1. Sample with supernatant water photographed.

2. Water siphoned off for biological processing.

3. Box core with water removed showing GoPro camera mount and 50 × 50 cm frame demarcating area for biological study.

4. Example of GoPro top shot showing nodule distribution.

5. Geotechnical samples being taken.

6. Each layer was excavated for nodules, which were placed in collection trays for further biological processing and mineralogical logging.

 

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7.3.4NORI sampling

 

A classification system for nodules was developed by NORI prior to mobilisation to the worksite. This was largely based on guidelines set by the ISA (ISA, 2010) and work presented by TOML in their NI 43-101 resource report (AMC, 2016). Over 49,000 nodules were collected in the 45 box cores. Examples are shown in Figure 7.12. An image classification method was adopted to enable rapid measurement of each nodule for all remaining box core samples. However, descriptors such as shape, texture, and fragmentation were only recorded as the dominant types for each box core sub-sample layer, and not for each nodule.

 

An average nodule size of 2.95 cm (long axis measurement) was recorded for all samples recovered during the 2018 NORI Campaign. Table 7.4 presents a summary of the size distribution of the nodules within 0–1 cm of seafloor.Shape, texture and fragmentation descriptors were logged as dominant types for each box core layer. Logging was captured in a digital excel database on-board the vessel.

 

Table 7.4 Nodule size distribution for samples recovered during the 2018 NORI campaign

 

Long Axis
<2 cm 2-5 cm >5 cm
s (small) sm m (medium) ml l (large)
24% 37% 23% 9% 7%

 

Figure 7.12 Examples of nodules recovered during the 2018 NORI campaign

 

Notes: Upper left – example of large nodules with rough texture. Top right – close-up of large nodule. These nodules were the least-dominant size class. More common were nodules in the 2–5 cm range, as shown by examples in lower left and right.

 

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Each box core was sampled by depth interval. Four intervals were used:

 

0–1 cm
1–5 cm
5–15 cm
>15 cm

 

91% of nodules by weight occurred within the top layer and were exposed at seafloor and 99% occurred within the top 15 cm.

 

Nodules were processed through three stations - a weighing station, volume station and photography station, before division of the nodules into samples and storage in labelled, gasket-sealed 6-gallon pails. All data was collated in a series of Excel spreadsheets.

 

Samples for distribution to assay laboratories were prepared at sea so that the samples could be sent to their destinations upon demobilisation. The mass of nodules recovered in the box cores was generally much more than required for assaying, so it was necessary to divide the nodules in an unbiased manner, to produce samples for assay and for reference. This was done by the cone and quarter method Figure 7.13. The sampling protocol varied according to the weight of the nodules and is summarised in Table 7.5.

 

After samples were split, the samples were divided into series of sub-samples for marketing, primary assay, reference, duplicate primary sample and secondary primary sample. These were placed in sealed bags. Each sample was given a unique numbered zip tie placed inside the bag. Bar codes were generated from these unique numbers and adhered to the side of the bag, plus written on the side of the bag in permanent marker pen. Bar codes were linked to the Excel sampling database.

 

Certified blank samples were purchased from ALS laboratories in Reno, Nevada and inserted into the primary and duplicate sequence at a rate of 1 for every 10. One blank from the primary sequence and one blank in the duplicate sequence was spiked with approximately 50 g of nodules sourced from a marketing split. Certified nodule reference materials were purchased from the United States Geological Survey (USGS) and inserted randomly into the sample stream at the assay laboratory.

 

All samples were placed in gasket-sealed 6-gallon pails, sealed with tamper-proof tape.

 

Table 7.5 Sampling protocol

 

Total nodule
weight
Procedure Primary
assay
sample
Reference
sample
(retained)
Duplicate
(primary
lab)
Duplicate
(secondary
lab)
Marketing
sample
0–4 kg Crush oversize, cone & quarter. Combine opposite quarters to make two samples. Yes Yes No No No
4–8 kg

Crush oversize, cone & quarter. Bag separately.

Yes Yes Yes Yes No
8–12 kg Cone and quarter (uncrushed). Retain one quarter for marketing. Recombine the other three quarters and crush oversize, cone & quarter, bag the quarters separately. Yes Yes Yes Yes Yes
> 12 kg As for 8-12 kg, then combine opposite quarters, cone & quarter, bag the quarters separately. Yes Yes Yes Yes Yes

 

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Figure 7.13 Coning and quartering process

 

 

7.3.5Image classification and size measurement

 

Image classification software was used to provide an alternative automated approach to measurement of nodule dimensions, using photographs. Figure 7.14 presents a comparison between the automated image processing method and hand-held calliper measurements and shows a very good correlation between the two datasets. The average (mean) lengths of the long axes of the nodules using the classification approach and the measured approach were both 3.31 cm. The mean for short axis estimation using the classification approach was 2.68 cm, whilst the mean for the measured approach was 2.72 cm. The test demonstrated that the image classification method was a practical, accurate method for measuring two orthogonal axes of the nodules and it was used from box core BC006 onwards.

 

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Figure 7.14 Comparison of image classifier results vs caliper measurements

 

 

7.3.6Biological sampling

 

The biological sampling was completed in 35 of the box cores Figure 7.15 and consisted of the following:

 

239 nodule biota specimens were sampled.
62 megafauna (>2 cm) specimens were sampled.

 

Samples were placed in cold storage for further analysis once ashore.

 

7.3.7Geotechnical sampling

 

Three soil sub-samples for geotechnical study were obtained from the undisturbed areas of each box core. These consisted of one 2.125 inch inside diameter (ID) liner sampler, and two 2.638 inch ID clear polycarbonate tubes.

 

The focus of the geotechnical sampling was the clayey footwall sediment sequence. Basic off-shore index and strength laboratory tests, comprised of soil descriptions, wet density measurements, and undrained shear strength index tests (Torvane tests and intact and residual miniature vane tests) were conducted on the geotechnical subsamples obtained from the box cores.

 

Results from the field tests revealed that the shallow soil stratigraphy consists of a veneer (about 6 cm thick) of surficial, dark brown, very soft semi-liquid clay overlying very soft, dark brown clay to a maximum core penetration depth of about 0.5 m BSF. At about 0.15 m depth, typically, a colour change from dark brown to light brown occurs. Evidence of bioturbation of the light brown layer is indicated by mottling with dark brown and brown clays. It was noted on the high-resolution geophysical survey data that a reflector at about 15 cm to 20 cm depth was consistently present across all the box core sites sampled. This depth corresponds with the top of the light brown clay. Qualitative carbonate content testing typically indicates no reaction with dilute hydrochloric acid (10% concentration).

 

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Figure 7.15 NORI Area D box core locations, showing those with biological sampling (in green)

 

 

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7.3.8Exploration results

 

The exploration results discussed herein include all data relevant to the Mineral Resource estimate. Additional data was acquired throughout the campaign for the purposes of selecting and mapping a Collector Test Site, environmental Preservation Reference Zones and oceanographic mooring site. These results are not discussed in any detail in this report.

 

7.3.8.1Box core abundance

 

Figure 7.16 shows the spatial distribution of nodule abundance and Figure 7.17 shows the nodule type as per the ISA system outlined in Section 6.6. The box cores had an average nodule abundance of 17.8 kg/m2, with the highest abundance reported at 30.9 kg/m2 (BC005). The two lowest recorded abundances are BC019 (0.8 kg/m2) and BC031 (6.5 kg/m2).

 

Figure 7.16 Box core abundance (in kg/m²)

 

Note: Box cores labelled by box core number.

 

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Figure 7.17 Box core size-texture classification

 

Note: ISA size classification: small (<2 cm), medium (2 – 5 cm), or large (>5 cm) grain size, and texture is smooth (S), smooth-rough (SR), or rough (R). Box cores labelled by box core number.

 

7.3.8.2Buried nodules

 

On average, 91% of nodules by weight were located at 0–1 cm (exposed at seafloor). This is an important consideration as it implies that a representative nodule abundance can be estimated using seafloor camera imagery to map and characterise nodule surficial distribution at seafloor.

 

Layers 3 and 4 logged in box cores often included a few nodules pushed down deeper from upper layers by the sides of the box core, typified by accumulation along the sidewalls of the box corer. BC043 was an exception and returned a significant weight of in-situ nodules throughout the core at all levels Figure 7.18. The buried nodules were very friable.

 

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Figure 7.18 Profile of nodule weight by depth in BC043

 

Note: Left – photo trays from layers 3 and 4, centre – nodule distribution with depth for BC43, compared to average nodule distribution with depth for all box cores (right).

 

7.3.8.3AUV data

 

Reconnaissance AUV MBES traverses were conducted over the candidate Collector Test Sites to provide confirmation of topographic and geological features observed in the 2012 vessel-based MBES dataset, but at a higher level of detail and confidence. These traverses were then followed-up with low-altitude surveys using the AUV’s camera payload to provide visual confirmation of nodule distribution. The reconnaissance lines also enabled calibration and refinement of the NORI Area D regional geological interpretation. Based on these revised interpretations a geomorphological domain interpretation was developed and preliminary relationships between backscatter and nodule distribution facies observed in camera data were established.

 

Figure 7.19 shows examples of AUV MBES data (ribbon) from reconnaissance traverses, shown against a background of EM122 vessel-based MBES background. The AUV data provides much finer-scale resolution than vessel-based bathymetry and shows good spatial correlation with macro-features. Figure 7.20 illustrates the fine geological detail provided by the AUV MBES. This type of detailed data will be useful for designing the operating path of the seafloor nodule collectors.

 

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Figure 7.19 Comparison of AUV MBES data (ribbon) against EM122 vessel-based MBES

 

 

Note: Top – bathymetry; middle – bathymetric slope (hot colours indicate steeper slopes); bottom – backscatter.

 

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Figure 7.20 Examples of AUV MBES data showing detailed-scale geological features

 

 

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AUV camera data was acquired at 6 m altitude for 89% of the reconnaissance traverses, providing visual continuity of nodule distribution between the majority of the physical box core sample sites. In addition, a 3.5 × 3.5 km grid of camera data was acquired over the Collector Test Site. Camera data is near-continuous over the reconnaissance traverses. Photomosaic coverage along the 3.5 × 3.5 km spaced camera traverses over the selected Collector Test Site are continuous. Each camera frame is 6 m across-track and 4 m along-track. Figure 7.21 provides an example.

 

Figure 7.21 Example of AUV camera photo mosaic showing nodules

 

 

7.3.9Nodule abundance estimation derived from AUV camera data

 

Although box coring is an effective method for measuring nodule abundance, it is slow and expensive. Therefore, it is advantageous if box core estimates can be supplemented by an alternative method.

 

There is a well-documented relationship between nodule length and wet weight (e.g., Felix, 1980). NORI confirmed this relationship by taking measurements of individual nodule length, using digital callipers, and wet weight, for nodules from box core samples BC001, BC002, BC003, and BC005 Figure 7.22.

 

In areas where nodules are not closely packed, image processing techniques can be used to identify each nodule unambiguously and measure its dimensions. In this case, it is possible to estimate nodule abundance from photographs. However, if nodules are closely packed and touch each other, image processing techniques are currently unable to reliably discriminate each individual nodule.

 

Photographic data acquired during the 2018 NORI campaign has shown the dominant nodule distribution in NORI Area D to be closely packed small-to-medium sized nodules (average long-axes length of 2.95 cm), averaging over 900 nodules per box core sample in the surface layer. It is therefore not possible to use image processing and not practical to use manual measurements of long axes for this facies.

 

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Several estimation techniques were tested, and an alternative methodology was developed using a combination of long-axis measurement and percentage nodule coverage which was applied to the data.

 

Figure 7.22 Comparison of nodule long axis measurements, taken using digital callipers, and individual nodule wet weight for BC001, BC002, BC003, and BC005

 

 

A multiple linear regression relationship between percentage nodule coverage estimated from the photographs and mean nodule long-axis measurement from six box core samples within the Collector Test Site was found to provide a good correlation with nodule abundance. The relationship is of the form:

 

Y = –15.20 + (0.24 X1) + (5.19 X2)

 

Where:

 

Y is the estimated nodule abundance

X1 is the percentage nodule cover

X2 is the mean Long Axis measurement

 

The percentage nodule coverage was determined by thresholding the image and calculating the percentage area covered by nodules in the image. Nodule long-axes were manually measured where possible, for each nodule in the image Figure 7.23.

 

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Figure 7.23 Detail of image processing

 

 

Notes:

1. Camera image.

2. Manual measurement of nodule long axes on calibrated image.

3. Image thresholding to determine percentage nodule coverage.

 

It was possible to obtain enough measurements to calculate representative mean long axis lengths which compared well with the mean long axis measurements from the actual box core samples Figure 7.24. Because photographs were not taken at the exact box core sites (due to loss of the camera laser-calibration system mounted on the box corer), 1 × 1 m subsets of the closest calibrated AUV camera data were used for this analysis. The average offset between the camera data and the actual box core site locations was 26 m. The offsets will have introduced some imprecision to the analysis, and it is expected that, in future, collocated photographs and box core samples will produce a better correlation.

 

Figure 7.24 Comparison of mean long axes lengths from AUV camera imagery and box cores

 

 

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Figure 7.25 shows the estimated abundance vs. actual abundance for Felix method (top), and the multiple linear regression method (bottom) for six box cores in the Collector Test Site. Although the correlation is high for the Felix method, the multiple linear regression method provided a better correlation than the Felix method and estimates that are closer to the actual nodule abundances. This is because the method is not dependent on measurement of each-and-every nodule in the image, which is not possible with some of the images typical of Type 1 nodule facies.

 

Figure 7.25 Comparison of Felix method and multiple linear regression method

 

 

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The multiple linear regression method was subsequently applied to the entire box core data set with associated AUV camera imagery (a total of 29 box cores used) to derive a more representative relationship using all available data. Extracted camera imagery was within an average offset of 15 m from actual box core site locations. The results are shown in Figure 7.26. An acceptable correlation (with an R2 coefficient of 0.62) was obtained.

 

Figure 7.26 Multiple linear regression model for nodule abundance

 

 

AUV camera transects were acquired on a 3.5 × 3.5 km grid pattern over the Collector Test Site. Subsets (1 × 1 m) of AUV camera data were extracted for each intersection point of the survey lines and the percentage nodule coverage was extracted as per the methods outlined above. Mean nodule long axis measurements were manually extracted from these images. This was necessary, as the majority of these extraction points are situated in Type 1 nodule facies, which were therefore not suited to the automated nodule detection method. Nodule abundance estimates were then derived for each of these intersection points, resulting in a 3.5 × 3.5 km grid of nodule estimation points over the Collector Test Site Figure 7.27. These estimates were used to supplement the Mineral Resource estimate.

 

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Figure 7.27 Nodule abundance estimates at 3.5 × 3.5 km node spacing within the Collector Test Site

 

 

7.4NORI 2019 campaign

 

Exploration in 2019 was divided into two campaigns (6A and 6B) due to the maximum duration of 45 days that OSV Maersk Launcher can remain out at sea. Campaign 6A was undertaken from 19/08/2019 to 03/10/2019 and Campaign 6B was undertaken from 10/11/2019 to 21/12/2019. The vessel was mobilised out of San Diego, California, USA.

 

Leap Energy was sub-contracted to provide geological support for the box coring operations. Bluefield Geoservices was subcontracted to provide the geotechnical logging and testing component of the programme, and ERIAS was sub-contracted to undertake environmental biological of the box cores.

 

7.4.1Box coring

 

A 100 x 75 x 50 cm stainless steel box corer built by KC Denmark, and a Kongsberg Maritime HiPAP 501 Ultra Short Base Line (USBL) system were used for the sampling campaigns. The box corer was operated by an MSS marine crew and was fitted with a large Kongsberg USBL beacon for positioning Figure 7.28 and a sound velocity profiler (SVP) to monitor sound velocity variations in the water column. The positioning was monitored by two certified surveyors from the Leap Energy team. Fixes were taken during each box core landing and all sample coordinates were recorded in WGS84 UTM 11N.

 

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Figure 7.28 Box corer on deck showing the USBL beacon mounting position

 

 

The procedures for sampling the nodules in Campaigns 6A and 6B were essentially the same as in 2018, with only minor changes in workflow to improve the efficiency of the process. The main changes were that the sampling intervals were simplified 0–1 cm, 1–15 cm, and the samples were not coned and quartered onboard the vessel. A flow chart of the sampling procedure is provided in Figure 7.29.

 

7.4.2Nodule sampling

 

The dominant nodule shape, texture, degree of fragmentation, degree of botryoidal development together with the samples weight and nodule abundance was logged. The nodule facies classification system developed during the 2018 campaign was used. For the clay footwall succession, the sediment lithology and colour were recorded.

 

The dominant nodule facies in the NORI Area D license area for the samples recovered during Campaigns 6A and B was Type 1 (82%).

 

The nodule description and measurement procedures were the same as used in 2018.

 

Sample preparation procedures were the same as used in 2018, with the exception that they were coned and quartered at the on-shore laboratory, rather than onboard the vessel.

 

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Figure 7.29 Box core processing flow sheet for Campaign 6B

 

Note for Campaign 6A the processing flow was similar, with the absence of biological push-cores.

 

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7.4.3Biological sampling

 

Biological sampling involved the collection of specimens of mega, macro, meio and microfauna from the samples of nodules and underlying sediments collected in the box cores during the 2019 campaigns. Specimens of biota were collected from a number of horizons in the box core sample, including sieving of the water layer overlying the sediments to collect motile specimens; physical removal of specimens of megafauna from sediment and attached to nodules and preserving them for later analysis; washing nodules to dislodge macro fauna; and using cores pushed into the sediment to collect meio and macro fauna from different sediment horizons. Sediment samples were also retained and preserved for environmental DNA (eDNA) analysis.

 

Biological material was collected and preserved from 100 box cores during Campaign 6A adding to the samples collected from 45 box cores during Campaign 3. All the samples and specimens collected during the campaigns have been appropriately preserved and are stored for identification and analysis at a later date.

 

Marine mammal observations were made from the bridge of the vessel and logged in a data base.

 

7.4.4Geotechnical sampling

 

Bluefield Geoservices performed geotechnical testing on 206 box core samples to a maximum depth of 0.50 m below sea floor. These were performed as part of the work-flow once the box cores were landed out on deck. All samples were subject to cone penetrometer testing and a subset of samples were subject to a comprehensive series of tests, including shear vane and plate load tests, using a purpose-built geotechnical rig provided by Bluefield Geoservices. Coring and geotechnical logging were also completed off-shore. Three (3) push cores collected from each box core for laboratory analysis. A comprehensive campaign of laboratory testing was also undertaken.

 

The soils encountered were very soft clays. Off-shore geotechnical analysis consisted of cone penetration test (CPT), laboratory vane, Torvane and plate load testing Figure 7.30. Push core and bulk density samples were taken from the box core opportunistically to aid sample description. Samples were also collected for subsequent on-shore laboratory testing

 

Figure 7.31. In addition, eight (8) gravity cores were collected.

 

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Figure 7.30 Photographs of geotechnical plate load test (left) and CPT (Right)

 

 

 

Figure 7.31 Photographs of biological & geotechnical tube sampling

 

 

 

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7.4.5Exploration results

 

Box core sampling was attempted at a total of 106 sites in the NORI Area D license area during Campaign 6A and 107 sites during Campaign 6B. Disturbed samples, considered to be unreliable, were omitted from the sample sequence.

 

A total of 106 box cores (BC046–BC151) and four gravity cores were acquired in the NORI Area D license area during Campaign 6A and 101 box cores (BC176–BC280) and four gravity cores were acquired during Campaign 6B. Disturbed samples, considered to be unreliable, were omitted from the sample sequence. Table 7.6 lists box core sample coordinates and polymetallic nodule weights and Figure 7.32 shows the location of the box cores.

 

The majority of the polymetallic nodules (92%) were found on the sediment surface (0 cm to 1 cm interval), with the remainder being predominantly encountered buried in the sediment at depths between of 1 cm and 15 cm. Occasionally, nodules were found buried deeper in the box core (15 cm to 30 cm), but these were generally in advanced stages of breakdown and were very easily broken when any attempt was made to recover them. The nodules from the deeper sedimentary layers (15 cm to 30 cm) were noted but were not collected or processed along with the nodule samples destined for the assay laboratory.

 

The nodules collected during the sampling campaign ranged in size from 10 mm to 250 mm in diameter. The dominant nodule shape encountered were discoidal in shape, whilst polynucleic shaped nodules were confined to the smaller Type 1 nodules.

 

The soils encountered in the box cores generally consisted of a lower sedimentary unit of very soft, pale brown clay, becoming dark brown with depth, and showing evidence of bioturbation.

 

The two sampling campaigns returned similar average nodule abundances, with the NORI_D_C6A campaign at 18.1 kg/m2 and the NORI_D_C6B campaign at 17.0 kg/m2. In general, nodule abundance is higher in the north and west of NORI Area D and diminishes towards the southeast. Topographic or geological controls may control nodule type/nodule facies on a more local scale.

 

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Table 7.6 Box core sample coordinates and polymetallic nodule weights

 

 

 

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Figure 7.32 Map of NORI Area D showing box core sample locations and bathymetry

 

Note: Circles – Campaign 6A; triangles, Campaign 6B

 

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7.4.6Analysis of grade distribution by size fraction

 

As part of the Campaign 6A and 6B box core sampling programme, a preliminary examination of the relationship between polymetallic nodule size and grade was carried out. Twenty-four (24) nodule box core samples were separated into four size fractions (+50 mm, –50 mm + 25 mm, –25 mm +10 mm, and –10 mm) using sieves.

 

Plots of the relative difference in grade between the assays for individual size fractions and the weight-averaged grade of the whole sample are shown in Figure 7.33 to Figure 7.36. The masses of the size fractions, in relative percentage, are shown in Figure 7.37. In general the proportion of material less than 10 mm (the -10 mm fraction) is very small.

 

Twenty-four samples are too few to make firm statistical conclusions, but the data is sufficient to show that distribution of nickel, cobalt, copper and manganese is not uniform across particles of different sizes. The particles may be whole nodules or abraded pieces of larger nodules. The samples show that selection of the particle size range that will be recovered by the seafloor collection system, and loss of fines by abrasion in the ore handling systems, may have small impacts on the grade of the ore recovered to the production support vessel.

 

Figure 7.33 Relative difference of grade by size fraction – NiO (%)

 

Note: Brown rectangle highlights anomalous grades in BC047

 

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Figure 7.34 Relative difference of grade by size fraction – CuO (%)

 

Note: Brown rectangle highlights anomalous grades in BC047

 

Figure 7.35 Relative difference of grade by size fraction – CoO (%)

 

Note: Brown rectangle highlights anomalous value in BC227

 

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Figure 7.36 Relative difference of grade by size fraction – MnO (%)

 

Note: Brown rectangle highlights anomalous grades in BC047

 

Figure 7.37 Proportions of size fractions by mass (relative percentage)

 

 

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8Sample preparation, analysis, and security

 

This Section describes the methods used for preparing and assaying the box core samples from the 2018 and 2019 exploration campaigns. The methods used in 2019 were not materially different from those used by NORI in 2018. In the opinion of the Qualified Person the sample preparation, security, and analytical procedures were adequate for estimation of Mineral Resources. The assays produced from this programme, supplemented by Pioneer Investor data, were used for estimation of Mineral Resources in NORI Area D.

 

8.1Security

 

8.1.1Box core samples

 

The geoscience laboratory on board the Maersk Launcher was manned by a team of qualified geoscience staff rotating on 12-hour shifts during box coring operations. All samples were weighed at the weighing stations. Reference weights were used to periodically check the accuracy of the electronic scales. All weights and associated nodule descriptions were recorded in logbooks (also digitally scanned) and captured in a digital (Excel) database. A digital photographic archive of all samples was also compiled. Data was stored on a computer and backups to external disks were regularly made.

 

On completion of processing, samples were stored in polythene bags placed in gasket-sealed plastic pails. All nodule pails were assembled in the geoscience laboratory and temporarily stored there until they were transported to a refrigerated container (reefer). The reefer was secured with a tag-in, tag-out system.

 

Sample bags were prepared with triple redundancy- numbered zip tie, printed bar code, and hand-written in permanent ink. Tracking of samples was maintained with a bar-code scanner and digital database.

 

Following checking of the nodule count in each box core against the photographic record and reweighing of the nodules, the samples from the depth layers were recombined. These samples were assembled into respective storage pails depending on sample type and destination. Each sample was scanned and recorded on the sample master spreadsheet, and sample pails sealed with tamper-proof tape, and carried to the secured storage reefer Figure 8.1.

 

Figure 8.1 Sample storage

 

Source: NORI. Note: (Left to right) sealed pail containing samples, secured refrigerated container, tag-in tag-out logbook, and seal.

 

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All samples were taken out of the reefer and reweighed on land upon arrival in San Diego. The sealed pails were reopened by geoscientists, weighed, scanned, replaced in pails, sealed with tamper-proof tape and returned to the secured storage reefer. Regular email communications were conducted with the Qualified Person for the Mineral Resource estimate during the sample acquisition operations.

 

8.1.2Camera imagery

 

Camera imagery and data acquired by the Fugro ESVII AUV in 2018 was logged to the AUV’s internal payload processing data storage disk. This data is co-registered, and time-date stamped with the vehicle’s other geophysical sensors (e.g., SSS) and navigation systems and resultant navigation data. The vehicle was positioned with a combination of INS and USBL navigation.

 

Once each dive was completed and the AUV returned to deck, the data was transferred across from the payload data disk bottle to the Fugro data processing server and backed-up.

 

Preliminary processing of the data was undertaken on board to aid follow-up survey site selection and optimisation. Review of the data was undertaken by the Fugro Geoscience team and NORI Client Representative on the vessel. The data was fully processed post campaign completion at Fugro’s Layfette offices in Louisiana.

 

Additional image classification and nodule long-axes automated extraction was undertaken by the same Fugro 2018 NORI campaign Geoscience members at Fugro’s offices in Houston, Texas.

 

8.2Sample preparation and assaying

 

All samples were freighted to ALS Laboratory Group (ALS) in Brisbane, Australia. ALS has a biosecurity quarantine facility approved by the Australian Quarantine and Inspection Service (AQIS). All samples were irradiated before clearing quarantine. The samples were not heat-treated as this would have resulted in breakdown of some of the hydroxide minerals.

 

The samples were inspected by AMC staff to confirm that there had been no tampering since despatch from San Diego.

 

Each box core sample was divided into four: a primary sample, a duplicate (primary laboratory), a duplicate (secondary laboratory) and a reference sample. For the 2018 campaign this was carried out onboard the vessel, as described in Section 9.3.8. For the 2019 campaigns, the division was carried out by cone and quartering at the on-shore laboratory.

 

The primary samples were submitted to ALS. For the 2018 sampling campaign, the duplicates (secondary laboratory) were submitted to Bureau Veritas laboratory in Perth, Australia. For the 2019 sampling campaigns, the duplicates were assayed at ALS and a separate set of pulps was later sent to BV for independent analysis. Reference samples were retained by NORI and stored in Brisbane.

 

ALS in Brisbane was selected as the primary laboratory as it has extensive experience in the analysis of high manganese samples and polymetallic nodules. ALS operates quality systems based on international standards ISO/IEC17025:1999 “General requirements for competence of calibration and testing laboratories” and ISO9001:2000 “Quality Management Systems Requirements”.

 

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The sample preparation and assaying procedure at ALS was as follows:

 

Samples were transferred to barcode-labelled aluminium trays and dried in an oven at 105 °C for three (3) days. This was a higher temperature than use in the 2018 programme but there appear to be no significant differences between the assays as a consequence. Moisture loss was measured.
After drying, samples were jaw crushed in a Jacques jaw crusher to reduce particle size to less than 10 mm.
The crushed samples were then pulverised in an LM5 mill to a powder with typical particle size >85% passing 75 µm. Very small samples were pulverised in a smaller bowl using an LM2 mill. A sieve test was conducted for every 20th sample to check the particle sizes.
Pulps were analysed by a fusion/XRF method (ME-XRF26s) using a small aliquot (0.33 g) to avoid fusion problems. The following oxides were reported:

¾LOI, Al2O3, BaO, CaO, Cr2O3, CoO, Fe2O3, K2O, CuO, MgO, MnO, Na2O, P2O5, SO3, SiO2, NiO, TiO2, PbO, ZnO.

Pulps were fused with lithium borate to create a bead that was dissolved with acid and analysed by inductively-coupled plasma emission mass spectroscopy (ICP-MS) (method ME-MS81) for:

¾Ba, Ce, Cr, Cs, Dy, Er, Eu, Ga, Gd, Hf, Ho, La, Lu, Nb, Nd, Pr, Rb, Sm, Sn, Sr, Ta, Tb, Th, Tm, U, V, W, Y, Yb, Zr.

Pulps were analysed for:

¾As, Cd, Li, Mo, Sb by four acid ICP-AES method (ME-ICP61).
¾Bi, Ge, Se, Te, Tl by four acid digest ICP-MS (method ME-MS62s).
¾Hg by low temperature digestion in aqua regia and ICP-MS (method Hg-MS42).
¾B by ICP-MS (method B-ICP69.
¾F by KOH fusion and ion selective electrode (method F-ELE81a).
¾Loss on ignition (LOI) at 1000 °C.

 

Manganese can exist in different oxidation states. AMC checked the totals of all the oxides plus LOI for each sample. The totals were generally about 96%. The shortfall of about 4% appears to arise because some of the manganese occurs in higher-valence states. A more realistic conversion of elemental manganese to manganese oxide would be approximately MnO1.85.

 

ALS also reported a calculated total, being the sum of the reportable analytes plus LOI. Manganese was included in this calculation as Mn3O4 but was reported on the certificate of analysis as MnO. This leads to the sum of analytes reported plus LOI, calculated by AMC, adding up to a lower value than the total calculated by ALS. The ALS calculation using Mn3O4 is aimed at covering the middle ground of MnO and MnO2.

 

BV was used as the secondary laboratory, to provide an independent check on the accuracy of the sample preparation and assaying by ALS. BV operates quality systems based on international standards ISO/IEC17025:1999 and ISO9001:2000. Each sample batch included internal quality control samples (certified reference materials).

 

The sample preparation and assaying procedure at BV was as follows:

 

Samples were dried in an oven at 105 °C. Moisture loss was measured.
Samples crushed and split, if required, then pulverised in a vibrating pulveriser

 

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Pulps were cast using a 12:22 flux with added sodium nitrate to form a glass bead. The beads were analysed by XRF for: TiO2, Fe, Al2O3, SiO2, Mn, CaO, MgO, S XRF, P XRF, BaO, K2O.
Pulps were analysed by Laser Ablation Inductively Coupled Plasma Mass Spectrometry for:

¾Ag, As, Ba, Be, Bi, Cd, Ce, Co, Cr, Cs, Cu, Dy, Er, Eu, Ga, Gd, Ge, Hf, Ho, In, La, Lu, Mn, Mo, Nb, Nd, Ni, Pb, Pr, Rb, Re, Sb, Sc, Se, Sm, Sn, Sr, Ta, Tb, Te, Th, Ti, Tl, Tm, U, V, W, Y, Yb, Zn, Zr.

Pulps were analysed for LOI at 1000 °C.

 

8.3Quality assurance and quality control procedures 2018

 

Certified reference materials (CRMs), blank samples (crushed rock samples with very low Mn, Ni, Co and Cu) and duplicate samples were used for quality control and quality assurance during the NORI 2020 campaign.

 

8.3.1Certified reference materials

 

The CRM called NOD-P-1, manufactured by the U.S. Geological Survey (USGS), was used for the NORI 2020 campaign. Material used in the preparation of the CRM was collected from the Pacific Ocean (14°50’ N, 124°28’ W) at a depth of 4,300 m.

 

Six CRMs were inserted into the NORI 2018 campaign sample submissions at a rate of 1 in 14. Table 8.1 shows the assayed oxide values for manganese, cobalt, nickel and copper for the CRMs and the certified values for NOD-1-P.

 

There was a slight positive bias in the manganese oxide assays and the BV (Bureau Veritas Minerals Pty Ltd) assays for nickel, manganese and cobalt were slightly elevated relative to those from ALS but these differences are not significant. The CRM results indicate that the NORI 2018 assay results are satisfactory.

 

Table 8.1 CRM assays from NORI 2018 campaign

 

Sample NiO (%) CuO (%) MnO (%) CoO (%) Laboratory
Certified value 1.71 1.44 37.6 0.28 -
0367075A 1.720 1.430 38.040 0.280 ALS
0367108A 1.730 1.450 38.240 0.280 ALS
0367175A 1.720 1.420 38.000 0.280 ALS
0367177A 1.720 1.410 37.920 0.280 ALS
0367109A 1.781 1.440 38.865 0.294 BV
0367183A 1.794 1.452 38.865 0.296 BV

 

8.3.2Blanks

 

The blank samples were composed of dolomite gravel or granite, which were expected to have very low content of manganese, cobalt, nickel and copper. The blank material was not assayed prior to insertion in the NORI sample batches. A total of 11 blank samples were inserted into the NORI 2018 sample assay batches at a rate of 1 in 8. Table 8.2 shows the assayed oxide values for the blanks. The assays for the blank samples indicate slightly elevated manganese (deliberate as some of the blanks had manganese mixed in with the blank) and negligible nickel, copper and cobalt.

 

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Table 8.2 Blank sample assays from NORI 2018 campaign

 

Sample NiO (%) CuO (%) MnO (%) CoO (%) Laboratory
0367116A 0.010 0.010 0.380 0.010 ALS
0367089A 0.030 0.030 0.630 0.010 ALS
0367091A 0.010 0.010 0.230 0.010 ALS
0367118A 0.010 0.010 0.380 0.010 ALS
0367200A 0.010 0.010 0.060 0.010 ALS
0367202A 0.020 0.010 0.420 0.010 ALS
0367241A 0.010 0.010 0.460 0.010 ALS
0367052A 0.006 0.004 0.181 0.001 BV
0367088A 0.010 0.007 0.232 0.001 BV
0367149A 0.009 0.009 0.284 0.001 BV
0367239A 0.003 0.002 0.142 0.002 BV

 

8.3.3Duplicates

 

Duplicate samples were prepared by cone and quartering the box core samples, as described in Section 9.3.8.

 

A total of 44 samples were assayed at ALS paired with duplicate samples also assayed at ALS. Figure 8.2 presents the results. The precision of the results is very good and there is no evidence of significant biases or errors.

 

A total of 43 samples were assayed at ALS paired with duplicate samples assayed at BV. Figure 8.3 presents the results. The precision of the results is good. There are very small high bias for nickel and manganese compared with the ALS assays Table 8.3 but this is not significant.

 

These results are consistent with the observation for the assays of the NOD-P-1 standard.

 

The maximum half absolute relative difference for the ALS paired data is NiO = 1.95%, CuO = 4.76%, MnO = 1.99%, CoO = 4.35% and for the BV assays paired with the ALS primary samples is NiO = 3.22%, CuO = 2.49%, MnO = 2.31%, CoO = 6.35%. The precision in the nodule sample assays is acceptable.

 

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Figure 8.2 Comparison of primary samples assayed at ALS and duplicate samples assayed at ALS

 

 

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Figure 8.3 Comparison of primary samples assayed at ALS and duplicate samples assayed at BV

 

 

 

Table 8.3 Duplicate average sample grades by laboratory

 

Variable ALS Primary ALS Duplicate BV Duplicate
NiO (%) 1.75 1.74 1.79
CuO (%) 1.44 1.44 1.43
MnO (%) 40.39 40.11 40.82
CoO (%) 0.16 0.16 0.17

 

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8.4Quality assurance and quality control procedures 2019

 

Certified reference materials (CRMs), blank samples, and duplicate samples were used for quality control and quality assurance during assaying of the samples collected in the 2019 campaigns.

 

8.4.1Certified reference materials

 

The CRM called NOD-P-1 was used. A total of 22 CRMs were inserted into sample submissions at a rate of 1 in 10. Table 8.4 shows the assays for the CRMs and the certified values for NOD-1-P.

 

There was a slight positive bias in the manganese oxide assays and the BV (Bureau Veritas Minerals Pty Ltd) assays for nickel, manganese and cobalt were slightly elevated relative to those from ALS but these differences are not significant. The CRM results indicate that the NORI 2019 assay results are satisfactory.

 

All the assays for Nod-1-P from ALS were within two standard deviations of the certified values and were satisfactory. The single Nod-1-P sample assayed at BV returned assays for nickel, copper, manganese and cobalt that were all biased slightly high.

 

Table 8.4 CRM assays from NORI 2019 campaigns

 

Sample NiO (%) CuO (%) MnO (%) CoO (%) Laboratory
Certified value 1.71 1.44 37.6 0.28 -
STD11 1.73 1.43 37.86 0.28 ALS
STD12 1.72 1.43 37.79 0.28 ALS
STD1 1.73 1.45 37.3 0.29 ALS
STD2 1.72 1.42 37.29 0.28 ALS
STD3 1.71 1.42 37.14 0.28 ALS
STD4 1.71 1.41 37.13 0.28 ALS
STD5 1.72 1.44 37.43 0.28 ALS
STD6 1.73 1.44 37.54 0.28 ALS
STD7 1.73 1.47 37.73 0.29 ALS
STD8 1.71 1.44 37.39 0.28 ALS
STD9 1.72 1.45 37.59 0.28 ALS
STD10 1.71 1.42 37.7 0.28 ALS
STD13 1.73 1.43 38.07 0.29 ALS
STD14 1.73 1.43 37.94 0.29 ALS
STD15 1.73 1.44 37.93 0.29 ALS
STD16 1.71 1.42 37.49 0.28 ALS
STD17 1.72 1.43 37.74 0.28 ALS
STD18 1.72 1.42 37.67 0.28 ALS
STD19 1.72 1.43 37.85 0.28 ALS
STD20 1.72 1.43 37.82 0.29 ALS
STD21 1.71 1.43 37.72 0.28 ALS
STD4 1.82 1.54 38.87 0.30 BV

 

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8.4.2Blanks

 

The blank samples were composed of recycled glass, which were expected to have very low content of manganese, cobalt, nickel and copper. The blank material was not assayed prior to insertion in the NORI sample batches. A total of 11 blank samples were inserted into the NORI 2019 sample assay batches at a rate of 1 in 19. Table 8.5 shows the assays for the blanks. The assays for the blank samples indicate negligible contamination in the sample preparation.

 

Table 8.5 Blank sample assays from NORI 2019 campaign

 

Blank name Sample NiO (%) CuO (%) MnO (%) CoO (%)
UUM_3 Blank1 <0.01 <0.01 <0.01 <0.01
UUM_3 Blank2 0.01 <0.01 0.13 <0.01
UUM_3 Blank3 0.01 0.01 0.13 <0.01
UUM_3 Blank4 0.01 0.01 0.12 <0.01
UUM_3 Blank5 0.02 0.01 0.57 <0.01
UUM_4 Blank6 <0.01 0.02 <0.01 <0.01
UUM_4 Blank7 <0.01 0.03 <0.01 <0.01
UUM_4 Blank8 0.02 0.02 0.2 <0.01
UUM_4 Blank9 0.01 0.03 0.22 <0.01
UUM_4 Blank10 0.01 0.02 0.16 <0.01
UUM_4 Blank11 0.02 0.04 0.42 <0.01

 

8.4.3Duplicates

 

Duplicate samples were prepared by cone and quartering the box core samples, as described in Section 9.3.8. A total of 19 samples were assayed at ALS paired with duplicate samples also assayed at ALS. Figure 8.4 and Table 8.6 presents the results. The precision of the results is very good and there is no evidence of significant biases or errors.

 

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Figure 8.4 Comparison of primary samples assayed at ALS and duplicate samples assayed at ALS

 

Note: Diagonal blue line at 1:1 ratio

 

Table 8.6 Duplicate average sample grades from ALS

 

Variable Number ALS Primary ALS Duplicate
NiO (%) 19 1.76 1.77
CuO (%) 19 1.48 1.49
MnO (%) 19 40.47 40.47
CoO (%) 19 0.19 0.19

 

The pulps of 27 pulp samples assayed at ALS were resubmitted for assay at BV. Figure 8.5 presents the results. The results for nickel, copper, cobalt and manganese are all biased high by approximately3% to 5%, compared with the ALS assays Table 8.7.

 

These results are consistent with the observation for the assays of the NOD-P-1 standard which indicated that the BV results were biased slightly high.

 

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Figure 8.5 Comparison of primary samples assayed at ALS and duplicate samples assayed at BV

 

Note: Diagonal blue line at 1:1 ratio

 

Table 8.7 Duplicate average sample grades from ALS and BV

 

Variable Number ALS Primary BV Pulp Duplicate
NiO (%) 27 1.74 1.82
CuO (%) 27 1.47 1.56
MnO (%) 27 39.4 40.5
CoO (%) 27 0.21 0.22
SiO2 (%) 27 12.6 12.9

 

8.5Moisture content

 

The moisture content of polymetallic nodules consists of two main types of water: free water occurring with pore spaces and water of crystallisation which forms part of the mineral structure of many of the iron and manganese minerals in the nodules. There may also be moisture held in meta-stable mineral phases.

 

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Manganese minerals with various types of crystalline lattice have different levels of thermal stability. Layered manganese minerals (buserite I, asbolane-buserite, and birnessite) are stable up to 120 °C–150 °C; asbolane up to 180 °C, vernadite, up to 500 °C; todorokite and pyrolusite, up to 600° and 670 °C, respectively (Novikov and Bogdanova, 2007). Measures of the moisture content of polymetallic nodules are therefore highly dependent on the temperature and the length of time to which the nodules are heated.

 

Published data on the moisture content of polymetallic nodules is commonly inconsistent. The following moisture content information was obtained from samples collected in the NORI Areas:

 

A drying test undertaken on a nodule sample collected during the NORI 2012 campaign indicated moisture loss of 24% at 120°C (Golder, 2015).
Average moisture content of four Campaign 2 samples dried for 12 hours at 120 °C was 28.7% (Golder, 2015).
Average moisture content of the Campaign 3 (2018) box core samples dried for three days at 60 °C (at ALS) was 19.3% and LOI at 1,000 °C was 16.8%.
Average moisture content of the Campaign 3 (2018) box core samples dried for at 105 °C (at Bureau Veritas) was 17.0% and LOI at 1,000 °C was 16.6%.
Average moisture content of the Campaign 6A and 6B (2019) box core samples dried for at 105 °C (at ALS) was 28.1% and LOI at 1,000 °C was 15.6%.

 

Ambient conditions, such as air temperature, humidity, evaporation rate and exposure time, during the handling of the nodules prior to sealing in sample bags were not recorded in these programmes. Also, the impact of drying time and oven temperature on the removal of pore water from the nodule samples has not been quantified. Consequently, the average moisture contents measured in different campaigns may not be directly comparable.

 

The loss on ignition data, which are measures of water of crystallization, are better controlled and show a reasonable degree of consistency.

 

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9Data verification

 

The original assay sheets for the individual samples collected by the Pioneer Investors from within the NORI Area are not available for auditing against the values in the database. Neither AMC nor DeepGreen nor NORI have had access to the original assay sheets for the individual samples that are within the Area, nor the quality control procedures used by the laboratories and the ISA. However, the consistency between the abundance and grade data collected by the Pioneer Investors, as presented in Section 9.1, supports the contention that the quality of the Pioneer Investor data is satisfactory.

 

It is also reasonable to infer that the Pioneer Investor data are of sufficient quality for resource estimation because the ISA is an independent agency with significant accountability under the Law of the Sea. Part of its mandate is the receipt and storage of seafloor sampling data suitable for the estimation of nodule resources and the legally binding award of licenses. It is reasonable to assume that a reasonable level of care was applied by the ISA.

 

Data collected by NORI is well-documented and was subject to satisfactory QA/QC processes. Documentation verified by the Qualified Person includes photographs, daily exploration reports, digital logging sheets and original assay reports. In the opinion of the Qualified Person the NORI data is of high quality and suitable for estimation of Measured Mineral Resources.

 

Assaying of nodules collected by NORI in 2012, 2013, 2018, and 2019 confirm the mean grades of the historical grab samples and support the contention that the quality of the Pioneer Investor data is satisfactory for inclusion in resource estimation. The main limitation with the Pioneer Investor data is the likelihood that some of the abundance values were too low, due to loss of nodules from the FFG. Estimates of abundance that include Pioneer Investor data are therefore likely to be conservative.

 

In the opinion of the Qualified Person the sample preparation, security, and analytical procedures were adequate for estimation of Mineral Resources.

 

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10Mineral processing and metallurgical testing

 

10.1Introduction

 

A combined pyro- and hydro-metallurgical flowsheet was evaluated for these IA. Similar flowsheets were investigated at various times over the last several decades. NORI initially relied on the significant body of information in the literature for process development. Subsequently, they have embarked on an extensive program of small and pilot-scale pyrometallurgical test work that has further informed definition of that part of the flowsheet. The work to date is discussed in Section 10.3.

 

The literature on test work for this process was reviewed and interpreted by Kingston Process Metallurgy in their report to NORI in October 2017. In turn, that report was reviewed as part of the current study, with important aspects from it being adopted for the purposes of process modelling and definition. Relevant extracts from the report are reproduced below in Section 10.2 shown in italic font. Comments from the Initial Assessment Section 13 author are shown as footnotes where applicable.

 

10.2Literature review (from KPM concept study, 12 October 2017)

 

10.2.1Studies on the pyrometallurgical processing of polymetallic nodules

 

Pyrometallurgical processing of nodules has been extensively studied from the early 1970s until the present day and appears to be the preferred process for most of the other currently active nodule processing research groups. Many groups including: Kennecott; Inco; Cuban / Bulgarian; German; Indian; Japanese; and Korean have studied pyrometallurgical processing of nodules at a laboratory scale. The nodule samples for these tests were collected from their respective license areas in the Clarion Clapperton [sic] Zone (CCZ). The composition of the nodules used in each of the studies is compared in Table 10.1 with that of the NORI Area D resource nodules. [Note: the NORI assays are from samples collected prior to 2017, not the current resource estimate].

 

Table 10.1 Comparison of sea nodule composition

 

Element NORI Inco German Japan Indian USBM
Ni 1.36% 1.14% 1.36% 1.36% 1.15% 1.33%
Cu 1.14% 0.80% 1.17% 1.04% 1.10% 1.20%
Co 0.13% 0.22% 0.16% 0.18% 0.08% 0.23%
Mn 28.40% 23.20% 31.23% 28.40% 24.30% 29.70%
Fe 6.68% 6.90% 6.20% 5.07% 5.36% 5.50%
Mo - 0.06% 0.06% 0.06% - -
Zn 0.15% 0.11% 0.15% 0.14% - 0.15%
SiO2 18.40% 18.43% 12.64% 12.20% 13.14% 13.40%
Al2O3 3.89% 5.80% 4.29% 4.35% 4.5% 4.76%
MgO 2.92% 2.90% 3.20% - 2.70% 3.12%
CaO 2.16% 1.81% 2.27% 2.19% 0.76% 1.79%
Na2O 2.40% 5.12% 2.74% - 1.02% 2.97%
K2O   - 1.19% -   1.13%
P   0.17% 0.21%   0.01% 0.10%
MnO / SiO2 1.99 1.63 3.19 3.01 2.39 2.86

 

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It should be noted that while in general the different nodule samples have similar compositions, there are subtle variations that can have significant implications for pyrometallurgical processing. Of particular importance is the ratio of MnO:SiO2 in the nodules as this impacts the choice of process operating parameters for the electric furnace smelting operation. This issue is discussed further in the Sections below.

 

Based on a review of the data found in the nodule smelting literature, it was concluded that the best data for designing a preliminary pyrometallurgical flowsheet for treating NORI nodules was provided by the Inco, Japanese and German references.

 

10.2.1.1Inco

 

Inco1 did extensive test work in the early 1970s on smelting nodules using a conventional Rotary Kiln Electric Furnace (RKEF) flowsheet for FeNi production from laterite, as shown in Figure 10.1.

 

Inco carried out laboratory tests using as received nodules (30% moisture) to simulate drying and reduction in a rotary kiln at 1,000 °C using a reducing gas containing: 14.7% CO, 8.2% H2, 6.7% CO2, 6.7% H2O and 63.2% N2 from combusting Bunker C oil with 60% stoichiometric air. Most of the Ni, Cu and Co oxides (70–90%) were reduced together with about 25% of the Fe oxides to a metal. With the addition of 4.5% anthracite coal, the extent of Fe oxide reduction to metal increased to about 45%. Inco also carried out tests to study the behaviour of the nodules in a 15 cm diameter pilot scale rotary kiln and reported that the amount of dust generated was similar to that observed in a commercial laterite rotary kiln and that the maximum temperature of operation for a kiln would be about 1,000 °C before the reduced nodules became sticky and caused plugging of the kiln. Unfortunately, no other data was reported from the pilot kiln tests.

 

 

 

 

1R. Sridhar, W. E. Jones, and J. S. Warner, “Extraction of copper, nickel and cobalt from polymetallic nodules”, JOM, April 1976, p 32.

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Figure 10.1 Schematic flow diagram of the Inco process for treating polymetallic nodules

 

 

The Inco nodules had a low MnO:SiO2 ratio of 1.6 with an estimated liquidus temperature of only about 1,300 °C. The Ni-Cu-Co-Fe alloy has a similar liquidus temperature so that no fluxes were needed to be able to smelt the nodules to produce a fluid slag and alloy at a reasonable temperature of about 1,400 °C. The pre-reduced nodules were blended with coal and smelted in crucibles at 1,380-1,420 °C for 1 hour to produce a metal phase, typically containing >90% of the Ni, Cu and Co, and a slag phase containing >97% of the Mn. No fluxes were added. Typical results are shown in Table 10.2 and Table 10.3.

 

Table 10.2 Results from Inco smelting tests

 

Element Alloy1 - Wt % Slag2 - Wt % Recovery in Alloy Wt %
Nickel 12.5–21.0 0.05–0.15 93–98
Copper 8.5–11.5 0.04–0.12 85–95
Cobalt 2.0–3.0 0.006–0.015 90–98
Iron 60.0–70.0 0.7–1.7 80–90
Manganese 0.3–6.0 25–33 0.5–2.5

Pre reduced at 1000 °C for 1 hour and smelted at 1400 °C.

1 6–8.5% of dry nodule weight.

2 72–80% of dry nodule weight.

 

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