PERTH (miningweekly.com) – Mineral sands miner Base Resources is “achingly close” to a fiscal agreement with the Madagascar government over the Toliara project, MD Tim Carstens said on Wednesday.

Speaking at the first day of Paydirt’s Africa Downunder conference, in Perth, Carstens said the company was hoping to have a fiscal agreement in place over the next few months, allowing Base to take a final investment decision (FID) on the project by September 2023.

With project construction expected to take 27 months to complete before first shipment, Base is targeting first product from Toliara by September 2025, and first shipments by December the same year.

Base in 2020 was forced to delay an FID on the Toliara project after the Madagascar government in 2019 suspended activities at the project area as negotiations around the fiscal terms applicable to the proposed mine were initiated.

Since that time, Base has undertaken a second definitive feasibility study (DFS) on Toliara to update the original study, which has seen the required capital expenditure for the Stage 1 operation increase from $442-million to $520-million million to establish a 13-million-tonne-a-year processing operation.

The Stage 2 operation will require a further investment of $137-million, which is higher than the $69-million previously estimated, to increase capacity to 25-million tonnes a year. The Stage 2 considered in the updated DFS is larger than the 13-million-tonne-a-year operation considered in the original study.

Over its mine life, the Toliara operation is now expected to produce an average of 960 000 t/y of ilmenite, 66 000 t/y of zircon and a further 8 000 t/y of rutile, which is higher than the original DFS, which estimated 780 000 t/y of ilmenite, 53 000 t/y of zircon and a further 7 000 t/y of rutile.

The updated DFS has increased the project’s post-tax net present value from $652-million to over $1-billion, and the internal rate of return from 21.4% to 23.8%.

Construction time for the Stage 1 operation has also increased from 26 months to 27 months, while the projected construction time for Stage 2 has increased from 12 months to 21 months; however, the life-of-mine has also increased from 33 years to 38 years.