JOHANNESBURG (miningweekly.com) – The definitive feasibility study (DFS) of the Yangibana rare earths project in Western Australia has significantly improved the capital cost requirements and operating cost estimates.
The project, which has been assigned a ‘lead-agency project’ status by the state government, will require capital expenditure (capex) of A$335-million, which is about 20% less than the June 2016 prefeasibility study (PFS) estimate, Sydney-based Hastings Technology Metals reported on Tuesday.
The DFS has also made significant improvements in the estimated operating costs of A$142-million a year, compared with A$202-million a year in the PFS. This equates to an average operating cost of A$17/kg of total rare-earth oxide (TREO).
The DFS calculations are based on a maiden ore reserve of 5.15-million tonnes at 1.12% TREO for the first six years of operation, along with a production target for years seven and eight, based on additional measured and indicated resources. The reserve base is expected to support 15-million tonnes a year of mixed rare-earth carbonate (MREC) production.
The DFS estimates yearly sales revenue of A$379-million from Yangibana. Project economic estimates include a net present value of A$466-million, at an 8% discount, an internal rate of return of 78% and a 2.3-year payback period.
“These project economics provide a compelling case for an economically viable project,” the company reported.
Hastings pointed out that the revenue streams were highly dependent on neodymium and praseodymium prices, which accounted for 85% to 90% of projected revenue.
The company believes the outcomes of the DFS will assist it in securing the remaining funds needed to get the project into production. The DFS is targeting a debt-to-equity split of 65:35, although the firm noted that it might change depending on negotiations with lenders.
Early work on infrastructure and site preparation is expected to start after the rainy season in March/April next year, with production targeted for late 2019.
“We are very pleased that the DFS demonstrates the Yangibana project to be economically and technically viable and Hastings is focused on becoming the second source of neodymium and praseodymium supply from Australia. We have already signed three memorandums of understanding with Chinese customers and we have ongoing discussions to sell our MREC to customers worldwide,” commented executive chairperson Charles Lew.
Neodymium and praseodymium are critical materials used in the manufacture of permanent magnets, which are found in electrical components of many new technology products, such as electrical vehicles, renewable energy wind turbines and electronic consumer products.