PERTH (miningweekly.com) – An updated prefeasibility study (PFS) into the production of direct shipping ore (DSO) and mixed gravity concentrate (MGC) from the Barrambie titanium project, in Western Australia, has been released.
ASX-listed Neometals on Monday told shareholders that the updated PFS had delivered compelling financial metrics, allowing the project to move into a definitive feasibility study stage.
The updated PFS estimated that for a capital cost of A$215.3-million, the project could deliver one-million tonnes a year of DSO material from the start of operations, and one-million tonnes a year of MGC from the second year of operation, over a mine life of 13 years.
Operating costs have been estimated at A$195/t, with the project’s pre-tax net present value estimated at A$374.9-million and its internal rate of return at 45%, with a pay-back period of just under three years. The updated PFS also estimated a total free cash flow of A$1.1-billion over the life of the project.
Neometals on Monday said that the benefit of a staged development approach would be that the DSO operation could begin to generate cashflow while the company constructed the crushing, milling and beneficiation plant, and that this approach would also enable Neometals to stage capital investments for earlier cashflow projects.
“The team has done an outstanding job updating the PFS for development of a concentrate-only operation contemplated in the Jiuxing offtake term sheet - the results speak for themselves. This lower capital, staged development of Barrambie would speed the addition of approximately 4% to global supply - our customer Jiuxing, is the largest chloride-grade titanium slag producer in the largest titanium market, China,” said Neometals MD Chris Reed.
“The market-linked pricing and floor price mechanisms for the DSO and MGC products are evidence of the strong market fundamentals for titanium and emerging structural supply deficit. We look forward to taking the project through the final feasibility and approvals stages and developing this hugely strategic asset.”