PERTH (miningweekly.com) – ASX-listed Alkane Resources has adjusted the economics of its Dubbo zirconia project, in New South Wales, following the completion of the front-end engineering design (FEED).
The FEED has resulted in a capital expenditure adjustment, from the A$1-billion estimated in the 2013 definitive feasibility study, to A$1.3-billion, based on a higher Australian/US dollar exchange rate.
Operating costs for the project have also been adjusted from the A$213.5-million estimated in 2013, to A$260-million.
Meanwhile, expected earnings before interest, taxes, depreciation and amortisation increased from A$290-million a year to A$320-million a year, while expected yearly revenue increased from A$503.5-million to A$580-million. The project’s estimated net present value over its 20-year mine life remained fairly consistent at A$1.22-billion, compared with the A$1.23-billion estimated in 2013.
The Dubbo project was expected to extract 19.5-million tonnes of rare metals and rare-earth ores from an opencut mine, at a rate of one-million tonnes a year.
Alkane was also proposing the establishment of a processing facility to produce 75 000 t/y of concentrate, which would be transported to either Port Botany or Newcastle for export.
Alkane reported on Thursday that the FEED had also resulted in substantial improvements and optimisations of the flow sheet, which delivered a 50% reduction of yearly water consumption and which reduced the footprint of the site to only 500 ha with the removal of over 90% of the liquid residue storage facilities. This was enabled by an advanced water recovery circuit.
Furthermore, a commercial zirconium basic carbonate production circuit had been demonstrated, with the potential for higher-value zirconium products, while the development of a hafnium recovery circuit also delivered higher-purity zirconium products, with high-value potential.
Overall rare earth recoveries improved by 11.5% for a total of 6 664 t/y, while neodymium recoveries were up by 7% to 960 t/y, and dysprosium recoveries were up by 27% to 128 t/y.
Alkane was in May granted development approval by the New South Wales Planning and Assessment Commission, enabling the company to move ahead with the applications for an environmental protection licence, mining lease and other permits.
The federal Department of Environment had also given its approval for the project development, after assessing the impact of the project on the pink-tailed worm-lizard.