PERTH (miningweekly.com) – A definitive feasibility study (DFS) into the Swanson tantalum/lithium project, in Namibia, has estimated it will produce at an average 12 500 t a month rate over a mine life of eight years.
ASX-listed Arcadia Minerals on Wednesday told shareholders that the DFS estimated a capital cost of A$14.78-million for the project, with a pay-back period of just over three years.
The study also estimated a post-tax net present value of A$15.36-million, an internal rate of return of 25.4% and a life-of-mine earnings before interest, taxes, depreciation and amortisation of A$48.35-million with average yearly free cash flows estimated at A$6.38-million.
“The compelling financial metrics of the DFS tied with the comprehensive construction funding capacity gained from the recently announced transaction with Hebei Construction underlines the significant value proposition of Arcadia and validates our ambitions of establishing a cash-generative enterprise to fund exploration objectives at our potentially company transforming assets,” said Arcadia chairperson Jurie Wessels.
“The expected attributable free cash flow of circa A$3.2-million Arcadia stands to receive per year should have a positive impact on shareholder value, considering that Arcadia’s yearly exploration burn rate over the last two years since listing amounted to an average of A$2.25-million.
“In addition, the exploration potential of the company’s 80% owned lithium and tantalum licences surrounding the Swanson project holds the promise of extending the production lifetime of the Swanson project’s eight years, thereby possibly yielding even greater returns for Arcadia.”
Arcadia holds an 80% interest in the Swanson project, which is set to dilute to 49.6% subject to construction funding of no less than $7-million being expended by Hebei Construction in return for a 38% equity interest, where Hebei would construct a plant, infrastructure, roads and do mine development and commissioning of a multi gravity separation plant according to detailed engineering specification for a concentrate feed of a minimum of 12 500 t a month.