JOHANNESBURG (miningweekly.com) – A scoping study for the Ardmore phosphate project, in north-west Queensland, has revealed strong potential returns and further cemented conceptual economics, ASX-listed Centrex Metals said on Monday.

The company, which acquired the project in June 2017, has been focused on developing a phosphate rock operation to supply feed to fertiliser plants in Australia, which is currently reliant on imports, as well as exporting to New Zealand and India.

The scoping study highlighted a ten-year openpit mining operation, with ore being crushed and deslimed to produce 776 000 dry tonnes of premium 35% P₂o₅ phosphate rock concentrate product.

The study showed conceptual inventory of 11.1-million tonnes, comprising 11% measured, 88% indicated and 1% inferred resources, with a life-of-mine strip ratio of 4.6:1 and an ability to free-dig the weak ore and overburden.

A capital cost range of about $55-million to $61-million was tabled, with the scoping study indicating a pretax net cash flow of about $278-million to $283-million and a pretax net present value of between $124-million and $129-million.

An internal rate of return of between 39% and 42% is expected, with a three-year payback.

“These interim scoping level results hopefully demonstrate why we are so excited about Ardmore. It is one of the few undeveloped high-grade phosphate rock projects in the world. We are doing everything we can to get into operation and cash flow as soon as possible. In the meantime, given the results, the directors believe Centrex is considerably undervalued,” said MD and CEO Ben Hammond.

The company is continuing its parallel feasibility study, which is due mid-2018, with preliminary scale operations targeted by the end of 2018, first shipments in 2019 and full-scale production of 776 000 t reached by 2021.

Centrex has also advanced discussions with all major phosphate rock importers in Australia, New Zealand and India, and has seen strong interest for offtake from the project.