PERTH (miningweekly.com) – A preliminary economic assessment (PEA) of ASX-listed Aguia Resources’ Tres Estradas phosphate project, in Brazil, has indicated that the project could deliver a net present value of $273-million and an internal rate of return of 25%.

A re-estimation of the capital cost and yearly production estimates has also seen project economics improve.

Tres Estradas was now expected to produce 500 000 t/y of single superphosphate, compared with the 350 000 t/y output suggested in a 2014 concept study, while expected capital costs for the project have reduced from $218-million to $184-million.

Expected operating costs also decreased from $177/t to $160.7/t.

The project was estimated to have a mine life of some 15.5-years, based on a 70.1-million-tonne mineral resource.

“The completion of the PEA indicates that the deposit will generate a robust economic return through the production of 500 000 t/y of single superphosphate,” said Aguia MD and chairperson Justin Reid.

He noted that the project would also have a payback period of only 3.2 years.

“There are numerous opportunities to further enhance these initial financial results. We plan to initiate drilling at the nearby Joca Tavares deposit that has the potential to contribute additional high-grade oxide material, which will substantially improve the project’s economics,” Reid said.

“Otherwise, we are considering options to optimise production scale and mine life, as well as a lower capital cost option to produce phosrock. The production of calcitic aglime will also be evaluated in detail as it has the potential to bring huge economic benefits for the project by reducing operational costs of waste management and contribute additional revenue.”

The company’s next steps would be to proceed with environmental baseline studies and a bankable feasibility study, while continuing the development of its other phosphate projects in the Rio Grande region.