PERTH (miningweekly.com) – The Sunrise cobalt/nickel project, in New South Wales, is expected to deliver some $14-billion in revenue over its first 25-year mine life, ASX- and TSX-listed Clean TeQ reported on Monday.

A definitive feasibility study (DFS) has found that the project will generate an average of $344-million a year in earnings before interest, taxes, depreciation and amortisation.

The project is expected to require a capital investment of $1.33-billion to develop an autoclave throughput capacity of 2.5-million tonnes a year.

The Sunrise mine will deliver 450 871 t of nickel, 84 007 t of cobalt, 250 t of scandium oxide and 2 337 t of scandium hydroxide, over the initial 25-year mine life.

The project also has the capacity to produce about 93.5 t/y of scandium oxide, with a dedicated scandium refinery with an 80 t/y high-purity scandium oxide refining capacity included in the DFS capital cost estimate.

Should the scandium demand accelerate past the 10 t/y assumed in the base case DFS, to a steady run rate of 80 t/y by the seventh year of operation, Sunrise’s net present value (NPV) could increase by an estimated $220-million, to $1.61-billion.

The base case scenario predicted a NPV of $1.39-billion and an internal rate of return of 19.1%.

Clean TeQ co-chairperson Robert Friedland said on Monday that the completion of the DFS was one of the most significant milestones in the company’s history, with the results confirming Sunrise’s position as a globally important source of high-purity raw materials to the lithium ion battery market.

“The prospects of creating extremely substantial value for all of our global stakeholders is apparent from the results of the DFS. Our management is truly excited to see the Sunrise project move into the next stage of development,” he added.

Clean TeQ CEO Sam Riggall added that the company’s first priority would be to finalise offtake discussions for the Sunrise production, which remained uncontracted, and to secure advantageous funding for the project.

“In our engagement with the market, we are seeing no shortage of demand for high-quality, battery grade nickel and cobalt sulphates and we are confident that binding long-term sales contracts will be secured in the coming months.”

“We have a clear strategy in place to complete the financing before making a final decision to proceed with development of the project in early 2019,” said Rigall.