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Vital hopes for cost cuts at Watershed

Vital hopes for cost cuts at Watershed

Photo by Reuters

22nd January 2016

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – Tungsten developer Vital Metals has identified ways to optimise the flowsheet at its Watershed project, in Queensland, which could result in capital and operating cost savings.

The ASX-listed junior said on Friday that results from testwork had shown that the Watershed flowsheet could be simplified from two separate water circuits, to one, allowing for the removal of equipment, which could result in a 10% reduction in the cost of mechanical equipment.

Further savings were also expected with reduced concrete, structural steel, labour and indirect costs yet to be factored in.

Operating costs would reduce with the removal of a number of filter presses and associated equipment.

MD Mark Strizek told shareholders that an engineering update of the design would be required to finalise and quantify the extent of the savings.

“Watershed is in the sweet spot for development and, as a result of this work and the current state of the engineering and construction market, we could easily see capital costs for the Watershed build come in under A$100-million, making this a very attractive development proposition.”

Strizek said that the project was substantially de-risked and ready to start construction.

“There is no better time to be developing a resource project as all capital expenditure and operating expenditure costs inputs are now at historical lows. With the right support, Vital Metals will be well placed to capitalise on the development of this high-quality asset as the commodities cycle begins to turn.”

A 2014 definitive feasibility study estimated that the project could support a 2.5-million-tonne-a-year operation over a mine life of about ten years, based on a mineral resource of 49.2-million tonnes, grading 0.14% tungsten for 70 400 t of contained tungsten trioxide.

The project is fully permitted.

Edited by Creamer Media Reporter

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