A prefeasibility study (PFS) into titanium and iron-vanadium concentrate production from the Barrambie titanium project, in Western Australia, has proven positive for ASX-listed Neometals.
The company told shareholders that the PFS results confirmed the commercial viability of the Barrambie project, which could potentially supply more than 500 000 t/y of high quality ilmenite during the first ten years of operations.
The PFS estimated a capital cost of A$432.1-million for the project, while operating costs have been estimated at A$237.40/t. Based on the mineral resource of 280.1-million tonnes, at 9.18% titanium dioxide and an ore reserve of 44.5-million tonnes, at 18.7% titanium dioxide, the project is expected to have a mine life of 21 yeas.
The pre-tax net present value has been estimated at A$391-million and the payback period at just under six years, with free cash flow estimated at A$1.66-billion over the entire mine life, or A$136-million a year over the first ten years of the operation.
Neometals has invested more than A$40-million in the acquisition, exploration and evaluation of Barrambie since 2003. The company has in more recent times maintained a primary focus on recovering a titanium product from the project to realise maximum value for shareholders.
The PFS assumes a mine, crush, mill and beneficiate option at Barrambie on predominantly Eastern Band titanium-rich mineralisation to produce a mixed gravity concentrate, which would then be subject to a low-temperature reduction roast and magnetic separation at a second site alongside the Dampier to Bunbury Gas Pipeline east of Geraldton to produce separate ilmenite and iron-vanadium concentrate streams.
“These results highlight the robust potential economics for Barrambie’s development. The PFS financial metrics, alongside the recently announced positive commercial smelting results, underpin our ongoing discussions with potential offtake partner Jiuxing. Barrambie is a unique tier 1 project that offers a range of development alternatives including staged development with the possibility of direct shipping of ore (DSO), beneficiation of ore into mixed gravity concentrate, or further processing of mixed gravity concentrate to produce separate ilmenite- and vanadium-rich iron products (the latter being the basis of the PFS),” said Neometals MD Chris Reed.
“The potential to bring in excess of 500 000 t/y of high-quality ilmenite to the market has high strategic value.”
With the completion of the PFS estimate for Barrambie, negotiation on a binding formal offtake can now begin for cornerstone offtake with Jiuxing, according to an existing memorandum of understanding (MoU).
The Jiuxing MoU contemplates the parties negotiating and entering into a binding formal offtake agreement for the supply of 800 000 t/y of mixed gravity concentrate or 500 000 t/y of ilmenite and 275 000 t/y of iron-vanadium concentrate, on a take-or-pay basis for a period of five years from first production.
A formal offtake agreement is expected in the first quarter of 2023.
www.ferroalloynet.com
