PERTH (miningweekly.com) – Phosphate developer Avenira is targeting a final investment decision on its Baobab project, in Senegal, in the first half of 2020, following the release of a positive feasibility study.
Based on a one-million-tonne-a-year phosphate rock concentrate capacity, the feasibility study estimated that the project would require an investment of A$254-million, and would have a pay-back period of 3.3 years.
The study estimated a post-tax net present value of A$294-million and an internal rate of return of 25.5%, with a free cash flow of A$756-million and earnings before interest, taxes, depreciation and amortization of A$1.4-billion over the initial 13.4-year mine life.
“The just-completed Baobab phosphate project feasibility study clearly demonstrates the project’s strong technical foundation and compelling financial returns, with cost-effective strip-mining and processing techniques delivering a high-grade premium quality product,” said Avenira MD and CEO Louis Calvarin.
The feasibility study is based on an openpit mining operation and a conventional flotation and magnetic separation processing plant, at a throughput rate of 2.9-million tonnes a year.
With the study now completed, Avenira is planning a bankable feasibility study for the June quarter of this year, which will be completed by the December quarter, with the company also hoping to advance discussions with potential funding parties.
Avenira on Monday said that funding of between A$11-million to A$14-million, would be required to allow the company to fulfill its needs up to a final investment decision by the first half of 2020.
The company has now entered into bridging loans worth a combined A$1.25-million with three of its major shareholders, with the company also seeking additional funding to complete the value-engineering and bankable feasibility studies, and to repay the bridge loans.
The capital raise will likely take place over two stages, starting in April, with Avenira saying that it was in discussions with private equity groups and project financing groups.