PERTH (miningweekly.com) – An updated definitive feasibility study (DFS) into the Ardmore phosphate rock project, in Queensland, has confirmed the project’s economic feasibility.
ASX-listed Centrex Metals reported that the updated DFS estimated a pre-production capital cost of A$78-million, to support an annual production of 800 000 t/y, over a project life of ten years.
This compares with a 2019 optimised DFS, which estimated that the project would require a capital investment of A$69-million to support the same parameters.
Based on a free-on-board sales price of A$182/t, the updated DFS estimated an unleveraged net present value (NPV) of A$166-million, and an internal rate of return (IRR) of 52%, with a pay-back period of less than two years.
This was compared with the NPV of A$192-million estimated in the 2019 DFS, and the IRR of 54%, with a pay-back period of 1.8 years.
Centrex told shareholders that the increased capital cost in the updated DFS reflected an increased cost in construction material and labour rates, while key mechanical and electrical equipment costs have also been updated.
Total operating costs also increased by 10% on the 2019 study, reflecting the demand for industry specific labour and subsequent increased labour rates. Total free-on-board costs have been estimated at A$124.53/t.
Centrex said on Thursday that the updated DFS provided the company with the confidence to start project financing discussions and to progress product sales.
“This is the right project at the right time. We have an opportunity to help Australian farmers produce more food, do it in a more environmentally friendly and sustainable way, and at the same time provide a decent return to shareholders,” said CEO Robert Mence.
Outside of the DFS baseline, Centrex will undertake additional optimisation studies with the aim of further improving the project’s value, these include investigating value adding opportunities to the direct application phosphate rock product, the use of reverse flotation to increase reserves, optimising the commercial plant’s location, adopting bulk road haulage, rail and storage solution, and by-product value adding opportunities.