JOHANNESBURG (miningweekly.com) – ASX-listed Image Resources has updated its bankable feasibility study (BFS) for the Boonanarring and Atlas mineral sands deposits in the Perth basin to reflect higher commodity prices and an updated exchange rate.
The new inputs significantly boosted the project’s economic metrics, with pretax net present value increasing from A$135-million in the original May 2017 BFS to A$197-million at an 8% discount rate. The pretax internal rate of return improved from 64% to 104%, while the payback period reduced to 16 months, from 22 months.
Image explained on Monday that the updated BFS included higher commodity prices, as forecast by TZ Mineral International, as well as an updated Australian/US dollar exchange rate forward curve.
Other material assumptions underpinning the original BFS remained unchanged, including the capital cost estimate of A$25-million, a binding offtake agreement for all the products that the mine will produce and the potential for a mine life expansion to Boonanarring.
Image further said that it had received significant interest from institutions and sophisticated investors, as well as potential debt providers to finance the project.
The company is targeting a mix of debt and equity to finance Boonanarring with about 60% of the total project financing expected to be by way of debt.
Image initially expected to secure project funding by the third quarter of this year but said on Monday that it hoped to secure debt financing in the first quarter of 2018, at which stage a decision to mine would be taken.
Project construction and commissioning would follow with first production set for six months after the decision to mine was taken.
The Boonanarring deposit is expected to deliver 1.1-million tonnes of heavy mineral concentrate and the Atlas deposit an additional 711 000 t. The Boonanarring deposit is estimated to have an initial mine life of five years, after which mining will move to the Atlas deposit, which would add a further three years to the overall mine life.