PERTH (miningweekly.com) – A scoping study into the South Johnstone bauxite project, in Queensland, has confirmed the potential for early production, owner Queensland Bauxite said on Thursday.
Based on an initial mining operation of about 800 000 t/y of bauxite, the South Johnstone project was expected to require a capital investment of A$5.14-million and would have an operating cost of some A$20.87/t free-on-board.
The scoping study estimated that the project would have a net present value of some A$75.67-million, an internal rate of return of 278%, and would generate gross revenue of A$44.1-million a year.
“The outstanding results of the South Johnstone scoping study show a highly profitable project, which will deliver significant free cash flows,” said Queensland Bauxite executive chairperson Pnina Feldman.
“The study validates the opinion of the company that South Johnstone ticks all the boxes with low capital expenditure, low operating costs, significant operating margins and fast-track to production. We are positioned to become a competitive, highly profitable producer with a plan that aims to deliver the timely and economic development of the project,” Feldman added.
Queensland Bauxite’s priority was to get the Stage 1, 800 000 t/y project into production by the second half of 2015, given that the existing infrastructure and capacity was currently available to support this level of production.
The company would then look to implement a Stage 2 development, which would increase production from Lake Johnstone to between three-million and five-million tonnes a year.
Feldman said on Thursday that Queensland Bauxite would use the scoping study to further advance discussions with potential offtake partners, stakeholders and financiers, in order to fast-track the project development.