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PERTH (miningweekly.com) – An updated project economics for the Yangibana rare earths project, in Western Australia, has increased the project’s expected post-tax net present value (NPV) by 84%, while its free operating cash flow expectations have increased by 71%.
ASX-listed Hastings Technology Metals on Monday reported that on the back of an increase in neodymium praseodymium (NdPr) prices compared with 2019, as well as an increase in the estimated ore reserves, the project’s NPV had increased from the previously estimated A$549-million to A$1.01-billion, while the post-tax internal rate of return had increased from 21% to 26%.
The 2019 economic study is based on an ore reserve of 12.2-million tonnes, at 1.12% TREO, and an NdPr price of $103/kg, while the most recent update is based on an ore reserve of 16.7-million tonnes at 0.95% TREO, and an NdPr price of $112/kg.
The new economic study has increased Yangibana’s expected operating life from 12 years to 15 years, with the project still expected to produce 15 000 t/y of mixed rare earth carbonate, containing 3 400 t/y of NdPr.
Total capital cost estimates for the project have also increased slightly from the A$516-million estimated in 2019 to A$658-million, while annual earnings before interest, taxes, deprecation and amortisation have increased from A$183-million to A$295-million.
Life-of-mine operating cash flows are now expected to reach A$4.3-billion.
“Today is a significant milestone for the Hastings team that is the result of an extensive amount of work carried out over a number of years. The updated project economics tell a story of a world-class rare earths project that will be capable not only of delivering up to 8% of global NdPr demand for a period of at least 15 years but generate significant, long-term value for all shareholders,” said Hastings executive chairperson Charles Lew.
“The Hastings team has done a tremendous job since 2017 to optimise and de-risk the Yangibana project, both technically and commercially, to make it an even more compelling investment proposition. Since its discovery in 2014, we were always confident in the quality of the rare earths resource endowment at Yangibana. As it turned out, the steady progress we have made over the years has converged with a strong global rare earths magnet market underpinned by the global energy transition and electric mobility. As the updated project economics demonstrate, Yangibana will be a financially and operationally robust, long-life project.
“We are well advanced on discussions with a range of funding partners and are now focused on finalising the appropriate capital structure that best positions Hastings for success in bringing Yangibana into production by 2024. This includes undertaking a corporate transaction or seeking joint venture partners.”
Plant construction activities are planned for the second half of 2022, and first rare earth production is targeted for the September quarter of 2024.