PERTH (miningweekly.com) – A bankable feasibility study (BFS) update into the Ngualla rare earths project, in Tanzania, has put a price tag of $321-million on the development of the standalone mining operation.
The updated BFS estimated a post-tax net present value of $1.48-billion and an equity internal rate of return of 37.3%, based on Adamas rare earth pricing and an ore reserve of 18.5-million tonnes at 4.8% total rare earth oxide, comprising 21.26% neodymium-praseodymium.
Based on the original BFS, completed in 2017, the updated BFS increased the production rate at Ngualla from 12 700 t/y of refined oxides to 16 200 t/y of concentrates, decreasing the capital cost from $356-million to $321-million with the implementation of a staged integration and development approach, which would see Ngualla developed on a standalone basis to produce a high-grade rare earth concentrate for export to third-party refiners, instead of also developing downstream capabilities.
ASX-listed Peak Rare Earths told shareholders on Monday that depending on the outcome of an independent study into the feasibility of a Tanzanian refinery, the potential existed to develop further downstream processing in either Tanzania or at Peak’s Teesside site in the UK.
The updated BFS estimated a mine life of 24 years, and yearly operating costs at $93-million a year, with the project expected to generate average revenues of $538-million a year and operating cashflows of $276-million a year.
This was compared with the 2017 revenue estimate of $228-million.
“The BFS update reaffirms the world-class status of the Ngualla rare earths project and its competitive positioning to meet rapidly rising demand for rare earths. It is distinguished by its high grade, low levels of radionuclides and attractive cost structure,” said Peak CEO Bardin Davis.
“The initial development of the Ngualla project on a standalone basis reduces upfront capital costs, lowers commissioning risk, generates strong financial returns and provides greater optionality around future downstream options.”
Executive chairperson Russell Scrimshaw said that with the BFS update complete and the framework agreement nearing finalisation, Peak could now focus its efforts on progressing the Ngualla rare earths project towards a final investment decision and establishing itself as the next major global rare earths producer.
“The Ngualla project will support the creation of hundreds of jobs, improved local infrastructure and be a major source of income for the Tanzanian government,” he said.