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Ammarroo slated for a 2019 construction - Verdant

17th May 2018

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – A feasibility study into the Ammarroo phosphate project, in the Northern Territory, has proven the project to be technically feasible, ASX-listed Verdant Minerals reported on Thursday.

The feasibility study considered a Stage 1 development to produce one-million tonnes a year of phosphate rock concentrate, which would be replicated during year five, taking production to two-million tonnes a year of rock concentrate from year six until the end of the project’s 20-year mine life.

The Stage 1 development is expected to require a capital investment of A$368-million, while the Stage 2 development would require a further A$200-million investment.

Verdant noted that the initial mine life of 20 years was only based on around 8% of the known Ammarroo mineral resource, and did not include the inferred resource at Ammarroo South, or the exploration potential of the Rockhole prospect.

Based on the projected output and mine life, Ammarroo is expected to have an average earnings before interest, taxes, depreciation and amortisation of A$74-million during the first five years of operation, increasing to A$166-million after the Stage 2 development.

The feasibility study also estimated a net present value of A$344-million and an internal rate of return of 18.1%.

Verdant told shareholders on Thursday that the results from the feasibility study would underpin the next phase of work at the project, which would include the selection and engagement of construction partners to optimise the scope and capital costs of the project, and reaching commercial terms with rail, port and energy providers, while also conducting offtake agreement negotiations.

Subject to the approvals and permitting, including the granting of mineral leases and securing project financing, Verdant was expected to make a final investment decision by the fourth quarter of this year, with construction expected to start in early 2019.

Edited by Creamer Media Reporter

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