- Australian Strategic Materials (ASM) confirms strong financial results from the optimisation study for the Dubbo Project
- The optimisation work simplifies the Dubbo Project process flow sheet and includes new operating strategies
- The 20-year life mine is expected to achieve a pre tax net present value of $2.36 billion and a pre-tax project internal rate of return of 23.5 per cent
- Managing Director David Woodall is pleased with the outcomes of the optimisation work, which demonstrates the financial strength of the Dubbo Project
- On the market this morning, ASM is down 10.4 per cent and is trading at $10.21 per share
Australian Strategic Materials (ASM) has confirmed strong financial results from the optimisation study and enhanced project addendum for the Dubbo Project.
ASM’s study was based on Alkane Resources (ALK) optmisation study, which was released to the market in 2018.
Dubbo has been optimised to produce neodymium, praseodymium, zirconium, hafnium, dysprosium, terbium and niobium oxides that can all be refined into high-purity alloys, metals and powders.
The revised financials are based only on the initial ore reserve of 18.9 million tonnes.
Optimisation work at Dubbo confirmed a stronger than expected rate of return with pre-tax net present value of $2.36 billion and a pre-tax international rate of return (IRR) of 23.5 per cent.
This is a pre-tax IRR improvement of six per cent compared to the 2018 ASX release.
The optimisation work simplifies the Dubbo Project process flow sheet and includes new operating strategies that will reduce operating costs and improve the ESG performance of Dubbo.
The strategies include increasing the brine concentrator, refurbishment of railway line and development of a chlor-alkali plant. These projects will benefit by reducing water consumption, reduce the handling and quantum process chemicals and reducing the number of trucks on local roads.
ASM is expecting the capital cost for the project to be around $1.67 billion, higher than 2018’s $1.2 billion. ASM said the key drives for this increased cost include refinements in the design and updating of the pricing of the dehafniated zirconia solvent extraction
plant, inclusion of a chlor-alkali plant, brine concentrator capacity upgrade, and owners’ contingency.
These inclusions have the effect of reducing the forecast annual operating expenditure from $317 million to $287 million, an annual average savings of $40 million.
Notably, the mineral resource estimate for the Dubbo Project is unchanged at 75.2 million tonnes of 42.8 million tonnes measured and 32.4 million tonnes inferred is unchanged.
Managing Director David Woodall is pleased with the outcomes of the optimisation work, which demonstrates the financial strength of the Dubbo Project.
“The optimisation work confirms we have a project that can integrate into our metals business to create an alternate, sustainable, secure and stable long-term supply of critical metals and oxides,” he said.
“This places ASM in an exceptional position in the critical metals value chain, as the vertically integrated owner of a globally significant polymetallic resource in Dubbo, and the capability to produce critical metals from this resource to the highest environmental standards.
“These exciting outcomes allow the ASM team to focus on progressing the financing, engineering, and construction strategy, and to secure offtake agreements for the integrated metals business,” he concluded.
On the market this morning, ASM was down 10.4 per cent and is trading at $10.21 per share at 10:44 am AEDT.