PERTH (miningweekly.com) – A prefeasibility study (PFS) into the Medcalf titanium-vanadium project, in Western Australia, has estimated that the project would require a capital investment of between A$499-million and A$780-million.

Project owner Audalia Resources considered two development scenario’s for the Medcalf project, the first of which consisted of a mine, local mine infrastructure, and a haul road to transport ore from the mine to a processing plant located within Western Australia.

The second base case considered an alternative to locate a hydrometallurgical plant overseas.

The offshore base case reduced capital and operating costs by 33% and 25% respectively, with capital costs estimated at A$499-million and operating costs at A$158.46/t.

This compared with a capital cost of A$780-million for the onshore operation, and an operating cost of A$190.28/t.

Under the base case scenario, the project would deliver a net present value of A$186-million and a 13.1% internal rate of return, which increased to A$843-million and 38.1% respectively under the offshore base case scenario.

Over the expected 12-year mine life and at a production rate of 1.5-million tonnes a year, projected revenue remained unchanged at A$5.3-billion for both production scenarios, while cash flow between the two varied from A$671-million for the base case scenario to A$1.5-billion for the offshore scenario.

Audalia said on Wednesday that while the offshore scenario currently proved the cheaper option, additional work would be required during a definitive feasibility study (DFS) to improve the level of confidence in this development option.

In addition, the PFS also identified a number of other options available to Audalia to improve the economic outcomes of the Medcalf project, and to reduce the environmental impact of the operation.

An investigation of these alternatives would form part of a DFS, which was slated to start in the second half of 2016.

In the meantime, Audalia would start work on regulatory approvals and permits, as well as additional tenure required to develop the Medcalf project.