Name and Location
Panda Hill niobium project, Tanzania.

Client
Panda Hill Tanzania, a joint venture comprising Cradle Resources and Tremont Investment, each have a 50% share in the project.

Project Description
The prefeasibility study (PFS) completed on the project has confirmed a world-class niobium resource with excellent metallurgical recoveries.

The base case for the PFS is premised on an openpit mining operation, providing two-million tonnes a year of mill feed over a 30-year life-of-mine.

This is the same scale of operation that was considered in the scoping study and approximates to 8% to 10% of world production.

For this reason, and to simplify financing arrangements, the definitive feasibility study (DFS) will be scoped to achieve a more modest entry into the market, starting with a throughput of one-million tonnes a year.

The DFS will allow for production expansion as demand grows.

In the early years of production, the successive pit cutbacks will target the high-grade Angel zone, with further expansion targeting the medium-grade, but high-recovery, fresh sovite mineralisation to the north.

As the Panda Hill mineralisation is a relatively clean material with low levels of impurities, particularly uranium, tantalum and titanium, and a well-liberated mineralisation at coarse grind, a single-stage flotation method can be used to process the niobium ore.

Net Present Value/Internal Rate of Return
The project has a post-tax net present value, at a 10% discount rate, of $470-million and an internal rate of return of 56%, with a payback of 1.5 years.

Value
The capital required for a two-million-tonne-a-year plant is estimated at $158-million, excluding preproduction and working capital costs.

This includes a 13% overall contingency.

Duration
Not stated.

Latest Developments
Panda Hill Tanzania has exercised its option to acquire the Panda Hill mining licences.

The JV has now entered into an amended purchase agreement with vendor RECB. Under the terms of the agreement, the JV will pay $1.5-million to RECB on completion of the transaction, along with 6.2-million shares in Cradle.

Half of the shares will be tradeable, while the remainder will remain in escrow until the start of commercial production at Panda Hill.

A further $3-million will be payable five days after project financing drawdown or at the end of September 2016 – whichever is earlier – while a further $5-million will be payable out of production, as a capped 5% net smelter return, with a time limit of four years from the start of commercial production.

The amended agreement represents a saving of about $2.5-million from the previous option arrangement.

A DFS on the Panda Hill project is due in the first quarter of 2016.

The DFS is ongoing, with the integrated pilot plant work having being completed during the quarter ended September 30, 2015. The results confirmed the overall process for the plant, but also highlighted the importance of managing the water balance to control water quality within the niobium flotation circuit, the impact of crushing/milling on fines generation and the subsequent niobium losses through desliming. Piloting will continue in November and December 2015 once the bulk sample has arrived from Tanzania.

Geotechnical drilling and trenching for the plant and tailings storage facility have been completed, along with the water bore drilling for the environmental monitoring boreholes. Further boreholes have also been drilled to identify the opportunity for water abstraction.

Meanwhile, testwork at the Johannesburg laboratories on the geotechnical samples collected is nearing completion and all interim results have been provided for the geotechnical and tailings consultants to use in the foundation designs.

The process design work is progressing, with work on the front-end (crushing and milling) and the smelter nearing completion. The results from the integrated pilot plant and the batch leach testwork are being used to develop the design of the flotation and leaching circuits.

Pit optimisations and strategic scheduling for the mine design have been completed. The schedule of rates from the mining contractors for the first round of the selection process has been completed and the technical package for the second round is being developed. The final pit design and interim pushback designs are progressing in conjunction with production scheduling.

The tailings storage facility design work is well advanced, with the layouts and sizing completed. Wall and foundation design, as well as stability analysis, is ongoing, with bills of quantities also being developed.

Ongoing additional studies and activities include:

• run-of-mine pad and haul road designs,
• flotation plant and leaching plant sizing and layouts,
• mechanical equipment costing and material take-off for bulk quantities,
• a tailings dam phasing approach,
• surface-water studies to finalise the site water management requirements and strategies,
• product offtake agreements and 
• project financing.

Key Contracts and Suppliers
SGS Canada (piloting of the milling and flotation circuit).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Cradle Resources, tel +61 8 9389 2000, fax +61 8 9389 2099 or email admin@cradleresources.com.au.