Dubbo optimisation proves positive for ASM

7th December 2021 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

PERTH (miningweekly.com) – An optimisation study into the Dubbo polymetallic project, in New South Wales, has confirmed the project’s economics, ASX-listed Australian Strategic Materials (ASM) said.

The optimisation work simplified the Dubbo project process flow sheet and incorporated new operating strategies that will reduce operating costs and improve the environmental, social and governannce (ESG) performance of the Dubbo project.

These strategies now include increasing the brine concentrator capacity, thereby halving water consumption, refurbishment of the railway line which simplifies project logistics and will provide new categories of local entry-level jobs, and development of a chlor-alkali plant which reduces the cost of reagents and their handling and transportation.

The optimisation work resulted in the project’s pre-tax net present value increasing from the A$1.23-billion considered in the 2018 optimisation studies to A$2.36-billion, while gross revenues have inceased from A$12.76-billion over the project’s 20-year mine life, to A$15.8-billion, and annual free cash flows from A$323-million to A$425-million.

ASM told shareholders that capital cost estimates for the project were now estimated at A$1.67-billion, consisting of direct capital of A$1.3-billion and indirect capital of A$208-million, and a A$163-million contingency. Annual operating costs for the operation have been estimated at A$287-million.  

The studies are based on a one-million-tonne-a-year plant feed, with the ore reserve estimated at 18.9-million tonnes. The mineral resource estimate for the Dubbo project is 75.2-million tonnes of which 42.8-million tonnes is classified as measured and 32.4-million tonnes as inferred.

ASM MD David Woodall said on Tuesday that the company was delighted with the outcome of the optimisation work, which demonstrated the financial strength of the Dubbo project and ASM’s focus on a sustainable future delivering improved performance and ESG outcomes.

“The optimisation work supports a strong go-forward case and is an exciting development for ASM, our partners and shareholders.

“The optimisation work confirms we have a project that can integrate into our metals business to create an alternate, sustainable, secure and stable long-term supply of critical metals and oxides. This places ASM in an exceptional position in the critical metals value chain, as the vertically integrated owner of a globally significant polymetallic resource in Dubbo, and the capability to produce critical metals from this resource to the highest environmental standards.

“These exciting outcomes allow the ASM team to focus on progressing the financing, engineering and construction strategy, and to secure offtake agreements for the integrated metals business,” Woodall said.

“ASM is making good progress on these matters. In particular, with the financing of the Dubbo project through the conditional framework agreement with the consortium of Korean private equity firms and the letter of support from Export Finance Australia.”