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- Diatreme Resources (DRX) releases a pre-feasibility study (PFS) for its Galalar silica sand project in Queensland
- The study outlines a low initial capex of $60.1 million and a payback period of 1.4 years
- The Galalar Silica Sand Project is expected to generate net revenue of $2.5 billion over an estimated 23.5-year mine life
- Diatreme will now proceed to completing a definitive feasibility study and expects to make a final investment decision in the second quarter of next year
- Diatreme’s shares are trading in the grey at 2.3 cents apiece
Diatreme Resources (DRX) has released a pre-feasibility study (PFS) for its Galalar silica sand project in Queensland.
The PFS reportedly delivered a substantial boost to the new silica sand mine and follows the completion of a maiden ore reserve. The PFS returned a post-tax net present value of $358 million, a 66 per cent internal rate of return and a net revenue of $2.5 billion over its 23.5-year mine life.
The study also outlined a low initial capex of $60.1 million, as well as an 11 per cent contingency of $7.8 million with a payback period of roughly one and a half years.
Diatreme Resources said these metrics demonstrate the potential new mine’s benefits for jobs while supplying Asia’s solar energy industry.
According to DRX. the mine stands to employ between 80 and 85 people directly and estimated roughly 40 percent of those to be local to the vicinity.
The company estimated a combined contribution of $800 million in wages, royalties and taxes during lifespan.
Diatreme’s CEO Neil McIntyre said the maiden mine site has exceeded the company’s expectations.
“These results are a substantial upgrade on the previous scoping study and highlight how fundamentally robust the project is as we advance through the final stages of the permitting and approvals process,” he said.
“We are delighted to announce our maiden Ore Reserve at 32 million tonnes and the exceptional results of our PFS study for our flagship Galalar Silica Project.”
The maiden ore reserve estimate of 32 million tonnes which is sufficient for the first 18 years of operations. The project’s mineral resource stands at 75 million tonnes.
The company plans on tapping into the booming Asian solar photovoltaic panel market because of its demand for Galalar’s “premium-quality, low iron silica product.”
Diatreme will proceed to completing a definitive feasibility study and expects to make a final investment decision in the second quarter of next year.
Diatreme’s shares traded in the grey at 2.3 cents apiece at 2:48 pm AEDT.
