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Mackay to cost $409m - Agrimin

7th May 2018

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – A prefeasibility study (PFS) into the Mackay sulphate of potash (SOP) project, in Western Australia, has found that the project could deliver an average 426 000 t/y over an initial mine life of 20 years.

ASX-listed Agrimin on Monday told shareholders that the project would require a capital investment of $409-million, with cash costs estimated at $222/t and all-in sustaining costs estimated at $256/t.

Based on the average annual output, the Mackay project is forecast to deliver annual earnings before interest, taxes, depreciation and amortisation of $137-million.

The PFS estimated a post-tax net present value of $453-million and an internal rate of return of 20%.

“The PFS has highlighted the potential for the Mackay SOP project to become the world’s largest and lowest cost supplier of seaborne SOP. In addition, the project has the potential to be a catalyst for investment in regional infrastructure throughout central and top-end Australia, thereby creating sustainable economic opportunities for local communities,” said Agrimin CEO Mark Savich.

“Global SOP demand is experiencing a rapid growth due to evolving food production practices, and Agrimin can have an important role in providing reliable seaborne supply of this high quality fertilizer.”

The PFS is based on the extraction of brine-hosted SOP mineralisation from a single aquifer unit, which starts some 40 cm below surface. The brine will be extracted solely from shallow trenches and fed into a series of solar evaporation ponds.

Savich said on Monday that given the positive technical and economic fundamentals demonstrated by the PFS, Agrimin will now start a definitive feasibility study (DFS) process, while progressing offtake and financing discussions.

The DFS is due for completion in mid-2019.

Edited by Creamer Media Reporter

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