PERTH (miningweekly.com) – A definitive feasibility study (DFS) on Stage 2 of the Pilgangoora lithium project, in Western Australia, has proved positive for project developer Altura Mining.
The Stage 2 DFS duplicated the Stage 1 processing plant, increasing production to 440 000 t/y of 6% spodumene concentrate by early 2020.
The Stage 2 development is expected to require a capital investment of A$118-million, and will result in the Pilgangoora project’s net present value reaching A$834.6-million with an internal rate of return of 62.6%.
The expanded operation is also expected to generate earnings before interest, taxes, depreciation and amortisation of A$2.47-billion, with life-of-mine revenues estimated at A$4.3-billion, over the 13-year project life.
“The swift completion of the Stage 2 DFS has provided excellent outcomes and provides the platform to move Altura into a strong global supply position,” said Altura MD James Brown.
“The DFS team has been able to use the knowledge from Stage 1 and effectively provide opportunities to capitalise on that experience. The company focus remains on commissioning Stage 1 as planned, which will allow for a formal investment decision to move to Stage 2, reaching total nameplate production of 440 000 t/y in early 2020.”
Brown noted that Altura had significantly de-risked the execution of the Stage 2 project by already having all major statutory project approvals in place, having all product for the first three years already accounted for through existing offtake agreements, and having the personnel and contractors already in place to start construction.
Altura told shareholders that the company had a number of options available to fund the Stage 2 development, including internally generated cash flow from the Stage 1 operation, further debt funding, pre-payment on Stage 2 production and equity capital.
No decision on the funding has been made as yet, but Altura told shareholders that it would take advantage of the strong demand for lithium products globally, and will secure its offtake as it did with the Stage 1 project.