Economics improves at FYI's HPA project
PERTH (miningweekly.com) – An updated definitive feasibility study (DFS) into ASX-listed FYI Resources' high purity alumina (HPA) project, in Western Australia, has nearly doubled the projected net present value.
FYI on Wednesday told shareholders that the updated DFS had estimated a post-tax net present value (NPV) of $1.01-billion for the HPA project, up from the $543-million estimated in the 2020 DFS.
The project’s post-tax internal rate of return has also been increased from 46% to 55%.
FYI told shareholders that the resulting NPV increase reflected the major technical improvements, substantial project de-risking and other key commercial developments accomplished since the initial DFS was completed last year.
“The update to the company’s initial DFS was an obvious progression in the development of our HPA project strategy. The quality and robustness of our HPA project was demonstrated in our initial DFS release in March last year. Since then, the company has continued the evolution of the project through further process design improvements, detailed test work via numerous pilot plant trials, and other supporting activities to assist in de-risking the project,” said FYI MD Roland Hill.
“There have also been a number of external factors, such as the Australian/US exchange rate movement, that have had an impact on the economics of the project. It was evident that a more up-to-date financial case be presented to the market.”
Hill said that the updated DFS outcome represented a persuasive economic case and demonstrated the merit of the project in being developed as potentially one of the HPA sector’s highest quality, lowest capital and operating cost project.
Annual HPA production has also been revised in the updated DFS from 8 000 t/y to 10 000 t/y, based on the expected HPA market growth, while product pricing has increased from $24 000/t to $26 400/t.
Total sales over the 25-year mine life have increased from an expected $4.7-billion to $6.1-billion, with cash flow after finance and tax increasing from $88-million to $131-million.
Furthermore, the exchange rate has impacted the project’s capital expenditure estimate, increasing it from $189-million to $202-million, while expected operating capital has been increased from $6 217/t to $6 661/t.
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