PERTH (miningweekly.com) – An updated definitive feasibility study (DFS) on the Coburn mineral sands project, in Western Australia, has improved the project economics, owner Strandline Resources says.

The updated DFS now incorporates binding offtake agreements, technical optimisation work, an updated mineral sands commodity price forecast and consensus foreign exchange rate forecast.

These additions have resulted in the projected pre-tax net present value increasing from the A$551-million estimated in the 2019 DFS, to A$705-million, while the pre-tax internal rate of return has increased from 32% to 37%.

Earnings before interest, taxes, depreciation and amortization (Ebitda) over the 22.5-year life of the project have also increased from A$1.93-billion to A$2.35-billion, while average annual Ebitda has increased from A$86-million to A$104-million.

The updated DFS is still based on a throughput rate of 23.4-million tonnes a year, with revenue now estimated at A$4.3-billion, up from the A$3.9-billion in the original DFS.

The updated DFS has also slightly increased the projected pre-production capital expenditure from A$257-million to A$260-million, while operating costs have been increased slightly from A$1.78-billion to A$1.8-billion.

Strandline MD Luke Graham on Thursday said that the updated DFS results provided further evidence that Coburn was well on track to become Australia’s next major mineral sands project.

“Coburn’s projected cashflows, low cost and robust fundamentals underpin very strong returns over a long mine life. Coburn is situated in the key mining state of Western Australia and benefits greatly from its access to existing port, road and services infrastructure.

“With key development approvals in place, binding offtake contracts signed with major customers and the funding process well under way, Coburn is moving rapidly towards development.”

Meanwhile, potential exists to increase the project reserves, mine life and returns through the resources extending north and along strike of the DFS ore reserve.

A scoping study to assess the Amy South resource was also undertaken concurrently with the DFS, and found that another 15 years could be added to the Covurn project life, and could generate an additional A$3.58-billion in revenue with the production of 353.4-million tonnes of ore.

Strandline pointed out that the extension case scoping study had a lower level of geological confidence, since it was based on an inferred mineral resource, with further work required.