PERTH (miningweekly.com) – The Ammaroo phosphate project, being developed by owner Rum Jungle Resources in the Northern Territory, has seen an upswing in its economics as the Australian dollar faltered.
Rum Jungle reported on Wednesday that the base case economic evaluations for the project had been reassessed since the 2014 prefeasibility study to take into account long-term forecasts for the Australian dollar’s value, as well as potential labour and other cost reductions, such as the price of oil.
Phosphate commodity price assumptions were also reassessed based on recent price valuations.
As a result, the estimated net present value (NPV) for the proposed two-million-tonne-a-year phosphate rock concentrate operation had increased from the A$570-million estimated in 2014, to A$790-million, while the internal rate of return (IRR) has increased from 25% to 31%.
Based on output of 500 000 t/y phosphoric acid, the project’s NPV increased from A$390-million to A$1.28-billion, while the IRR increased from 14% to 26%.
On an output of 1.02-million tonnes a year of ammonium phosphate fertiliser, the NPV increased from A$1.47-billion to A$2.25-billion, while the IRR increased from 21% to 27%.
No adjustments were made to the original feasibility study and no additional resources have been incorporated into the new economic forecasts, Rum Jungle said.
The company said its medium-term objective for Ammaroo was to take one of the development options forward to a bankable feasibility study, government approvals and development.
The company added that the most likely source of near-term funding to advance the project would be through the establishment of a joint venture and associated offtake agreements. It was currently on the hunt for a cornerstone industry partner, which would also help to determine the product strategy.