PERTH (miningweekly.com) – ASX- and Aim-listed Neometals has abandoned offtake talks with China’s Jiuxing Titanium Materials Co, but said on Monday that discussions with other parties continued.
Neometals told shareholders that both companies had invested significant time and money to evaluate the feasibility of using mixed gravity concentrate (MGC) from the Barrambie titanium project, in Western Australia, in Jiuxing’s downstream titanium processing facilities.
However, the broader macroeconomic backdrop has required Jiuxing to adjust its production plans and shelve further Barrambie-related activities.
“Despite this disappointing outcome for both Jiuxing and Neometals, strong alternative interest for offtake and investment into the Barrambie remains. We continue to pursue multiple options with other parties about potential development options for Barrambie,” said Neometals MD Chris Reed.
An updated prefeasibility study (PFS) completed earlier this year estimated that for a capital cost of A$215.3-million, the project could deliver one-million tonnes a year of direct shipping ore (DSO) material from the start of operations, and one-million tonnes a year of MGC from the second year of operation, over a mine life of 13 years.
Operating costs have been estimated at A$195/t, with the project’s pre-tax net present value estimated at A$374.9-million and its internal rate of return at 45%, with a pay-back period of just under three years. The updated PFS also estimated a total free cash flow of A$1.1-billion over the life of the project.
Reed said that the PFS had highlighted the significant inherent value of Barrambie, and that the company remained committed to determine the best pathway to achieve value for shareholders from the project.