PERTH (miningweekly.com) – Tungsten hopeful Vital Metals on Tuesday told shareholders that it was studying the economic viability of tripling production at its proposed Watershed project, in Queensland, after preliminary findings from the feasibility study suggested it could be feasible.
The ASX-listed junior has now extended the feasibility study by six months.
The extended feasibility study would examine increasing production from the currently proposed one-million tonnes a year to three-million tonnes a year. Early indications show that the capacity could be achieved for a capital expenditure of some A$150-million.
MD Mark Strizek said in a statement that the feasibility study had indicated that Vital had a one-off opportunity to expand the production capacity at the Watershed project.
“In recent months, there have been a number of very positive developments that will further improve the economics of the project. The overall mining industry slowdown has led to a significantly reduced operating and capital cost structure. Contrary to many other metals, the tungsten price continues to appreciate in US dollar terms, which coupled with the declining Australian dollar, has resulted in significantly higher Australian dollar tungsten prices in recent months.”
Strizek added that Vital would now undertake additional engineering studies on the three-million-tonne-a-year scenario and would seek to make adjustments to the environmental management plan.
The environmental management plan has already been approved by the Queensland government, and the project would now progress to the final stage of the approvals process, with the draft environmental plan being prepared for public review.
Both this process and the revised feasibility study would be completed in the December quarter of this year.
“While this additional work is expected to take up to six months, we are confident that the higher financial returns will far outweigh the delay,” Strizek said.
The Watershed project currently has a mineral resource of some 49.32-million tons, grading 0.14% tungsten. The project is wholly owned by Vital, but Japan Oil, Gas and Metals National Corporation was earning a 30% stake in the project, and was also contracted to take 30% of the project’s offtake.