- Junior alumina explorer FYI Resources (FYI) has locked in $80 million in equity funding for its WA-based kaolin and high-purity alumina projects
- The funding was announced in tandem with a completed definitive feasibility study
- The study forecasts 8000 tonnes of HPA production over 25 years with $7.2 billion of total sales
- The $80 million in funding comes from Luxembourg-based investment group GEM Global Yield
- FYI Managing Director Roland Hill said the funding will be used to help speed up development
- Shares in FYI gained 17.31 per cent and closed worth 6.1 cents each
Perth-based alumina explorer FYI Resources (FYI) has bagged $80 million in funding from a Luxembourg-based investment company.
News of the funding comes in tandem with a completed definitive feasibility study (DFS) for FYI’s Cadoux kaolin and Kwinana high purity alumina (HPA) projects in Western Australia. To make things even sweeter, FYI has updated the Ore Reserve the Cadoux.
The string of big news saw FYI outperform a struggling market today, gaining over 17 per cent by market close.
The DFS outlined a production target of 8000 tonnes of HPA over a 25-year period. On top of this, the DFS highlights a net present valuation after tax of US$543 million (roughly A$835).
Further, the study forecasts US$4.7 billion in total sales over the 25 years, representing yearly earnings per share after tax of $0.41.
The company’s $80 million in equity funding comes from GEM Global Yield — a $5.2 billion investment group based in Luxembourg. According to FYI, GEM focussed on investing in emerging markets and undervalued growth opportunities. The big investment into FYI is a vote of confidence from the investment group.
Importantly, the equity funding will cover roughly a third of the necessary capital costs of the HPA project.
FYI Managing Director Roland Hill said the finished DFS represents a “persuasive” economic case for company operations.
“The extent of diligence in this body of work provides us with assurance in our innovative HPA refining process to be able to deliver a high quality, high purity product in a consistent and reliable manner. The DFS demonstrates that Cadoux has the merit to be developed as one of the sectors lowest capital and operating cost projects,” Roland explained.
The $80 million in funding de-risks the project, according to Roland, and comes at a critical time in the company’s development process.
“Sufficient equity funding is one of the larger challenges for a junior company; we intend to use this funding package to accelerate our development schedule,” he said.
FYI said the DFA targets first production of HPA from Cadoux and Kwinana in the second quarter of 2022 — lining things up nicely with the forecast boost in demand as electric vehicle demand rises.
With potential positive cash flows becoming more of a reality for FYI, investors seem to have been happy to top up off of today’s announcement. Shares in FYI gained 17.31 per cent and closed worth 6.1 cents each.