PERTH (miningweekly.com) – A definitive feasibility study (DFS) has confirmed that the Muga potash project, in Spain, was economically feasible, owner Highfield Resources reported on Monday.
Based on an ore reserve of 146-million tonnes, at an average grade of 12.73% potassium oxide, the DFS estimated that the project could deliver 1.123-million tonnes a year of granular potash, over a mine life of 24 years.
The project would require a capital investment of $256-million, and would deliver a net present value of $1.42-billion and internal rate of return of 51.9%.
The study estimated earnings before interest, taxes, depreciation and amortisation of $296-million during its first full year of production. C1 operating costs have been estimated at $119.09/t.
“The DFS builds on a compelling prefeasibility study and reconfirms Muga’s potential to be a very low capex [capital expenditure], high margin potash mine,” said Highfield MD Anthony Hall.
“We believe Muga has the potential to be the highest margin potash mine globally in production and this is very exciting for everyone involved in the company.”
Hall noted that Highfield was moving into a construction ready phase, and was hoping to release tenders within the next quarter, to ensure that the company was ready to start construction by the fourth quarter of this year.
Initial production from Muga was planned for the second quarter of 2017, with full production targeted for January 2019.