PERTH (miningweekly.com) – An updated prefeasibility study (PFS) into the Urquhart bauxite project, in Queensland, has confirmed the low capital cost requirements for the project development.
The PFS estimated that a capital injection of A$2.2-million would be required to develop Urquhart to produce some 1.5-million tonnes a year of ore, producing 6 532 t/y of saleable product over a five-and-a-half-year mine life.
ASX-listed Metallica Minerals on Wednesday said that the PFS estimated a net present value of A$47.3-million on sales of 6.5-million tonnes of the project’s proven and probable reserves, with revenues estimated at A$389-million and earnings before interest, taxes, depreciation and amortisation at A$68.8-million.
“We remain confident that Urquhart bauxite will deliver value for shareholders and continues to display attractive returns despite shipping costs increasing by over $5/t,” said Metallica MD Simon Slesarewich.
“Utilising contractors to deliver the mining and having access to the nearby and operational Hey Point barge loading and transshipping facility will translate into a development that is low in capital intensity and can be brought into production rapidly.”
Slesarewich said that previous marketing work by the company and its marketing agent has ensured that the well-known bauxite product produced at Urquhart will be readily received by Chinese refiners.
Metallica has meanwhile said that it would finalise negotiations for a binding agreement over the grant of access to build a build a haul road connecting Urquhart to the barge load facilities at Hey Point.
Following the granting of the mining lease in January, the company has escalated the current haul road impasse to the highest level of the Queensland government, and government officials have increased their efforts and are negotiating with all parties directly.